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ICT Mentor-ship Core Content

- Month 4 -

1- Interest Rate Effects On Currency Trades.

2-Reinforcing Liquidity Concepts & Price Delivery.
3- Order-blocks
4-Mitigation Blocks
5- ICT Breaker Block
6-ICT Rejection Block
7-Reclaimed ICT Order-block
8-ICT Propulsion Block
9-ICT Vacuum Block
10-Liquidity Voids
11- Liquidity Pools
12-ICT Fair Value Gaps FVG
13-Divergence Phantoms
14-Double Bottom Double Top

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Interest Rate Effects On Currency Trades.

what does smart money look like in price and what's it look like how do you
know when smart money is moving in in the in the marketplace well first let's
take a look at what it looks like in bearish conditions obviously there has to be
some diametrically opposed view and you have to start by looking at a base
asset or benchmark and in bearish conditions that base asset or benchmark
would be making higher highs now the the base asset or benchmark could be
the dow jones industrial if we're trading stocks it could be the dollar index if
we're trading currencies it could be the crb index if we're trading commodities
the smart money distribution can be seen by comparable assets that are
closely correlated that are making lower highs the reason why this is occurring
is because the smart money is heavily distributing while the base asset or
benchmark is moving higher the public or less informed traders will be looking
at the market making higher highs for instance on like the dow jones industrial
they will attribute that as this is underlying strength so therefore the market
should keep going higher but if the general market averages start making

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lower highs that's actually indicating their smart money distribution underway
and it's not new buying it sending the price higher but heavy distribution in
bullish conditions the opposite is seen you have to have obviously a base
asset or benchmark to compare and assume that the base asset or
benchmark is moving lower and it's going to be forming lower lows in smart
money accumulation will be seen with that condition being met with higher
lows and again using the analogy that we just used a minute ago assuming
that the base asset or benchmark is the Dow Jones industrial it could be
making lower lows and by all standards looking at it the public or less
informed traders would attribute that as underlying weakness so therefore
stock should be continually going lower but a closer look we'll see that some
stocks are not making lower lows and that is showing a graphic depiction or
visual representation of smart money accumulation because those stocks will
making higher lows and the reason why this is occurring is because if they're
heavily buying the price will not be permitted to go lower because that is the
basis of supply and demand if there's a high demand for something it doesn't
go on discount it goes at a steady or higher price and many times at a higher
price so to accumulate or buy more of that it will be forced upon the buyer to
pay a premium on it it will not ever it won't ever go to a discount and the
opposite is seen with the bearish conditions when the underlying base asset
or benchmark is moving higher the reason why that heavy distribution is
taking place is because they're selling it they don't want to hold on to it for
higher prices because their view from a smart money's perspective is this
recent rally higher on the base asset or benchmark or in this case would be
represented by an example like the dowjones just because the dowjones is
making higher highs doesn't mean always that's underlying strength it could
be just a heavy distribution cycle.

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interest rate triad again we start with the 30-year treasury bond market the
10-year note and the five-year note okay by overlaying these three markets
you'll be able to highlight when accumulation distribution is in the interest rate
market and when this takes place it represents smart money movement or
how you as a trader can view smart money in the form of seeing where
accumulation and buying or distribution and selling is actually occurring in the
marketplace the three interest rates should confirm each higher high or lower
low at moments when the us dollar index is at a significant price point failure
swings highlight smart money participation in the markets and trading
opportunities are validated for instance let's look at the top we see this graphic
depiction now this could be the 30-year treasury it could be the 10-year or it
could be the five-year there's no demand on either one of these three being
the failed low or low you just need one to break that pattern of moving lower
when it happens it invariably will show smart money participation in the
marketplace because large volumes will be moving by way of their entries and
exits it causes that real supply and demand factor take place in pricing so
therefore the model will show underlying strength in one of the interest rates
in other words they won't make a lower low the one on the bottom most
obviously makes a lower load just like the one on the top graphically but the
one in the middle that's highlighted in blue that is representing a failure swing
so when that happens what we're seeing is there's an interest rate shift so
there's going to be a shift in the marketplace and if this occurs at a moment
when you're identifying a potential institutional order reference point or focal
point in the us dollar index that confirms that particular idea for instance if
you're looking for a bullish order block on the dollar index if you're looking for
a buy at a bullish order block or supposed support to come into the
marketplace for the dollar index you would see a opposite of this indication
here it would see a higher high probably on two of the interest rates but a
lower high on one of them and what that would do is it would confirm the
bullish order block for the dollar index .

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you're looking at the interest rate markets now every chart i'm showing you here you
can get this at barchart.com it's free it doesn't cost you any money to get that that
charting service from them now looking at the chart like this it's not easily ascertained
what it is it's supposed to be telling you and this is the reason why it evades majority
simply because we can show a chart plotting open high low and close on these
specific interest rate markets doesn't always indicate understanding and specifically
going through the 30-year the 10-year and the 5-year like we just did having these on
your charts your analysis of the markets if you break them down in the right manner
just simply having a chart doesn't do it it's not found with the you do traditional
technical analysis so you have to look at things on a comparative basis okay so what
i mean by that let's take a closer look and we'll look at this move in the dollar index it
just took place the week of this recording you see the dollar index came down into
that 99.50 level and had an aggressive rally away we talked about the dollar being
bullish in this area and the market moved higher all week as a response to that
strong move off of 99.50 level but if you go back and look at the interest rate market
okay this is the 30-year treasury bond market this is a 90-minute chart okay i'm
looking at over about 15 to 18 days and again you can do all that on barchart. com
the the bond market between the fifth and the eighth and seventh in other words
there was a failure swing that you can clearly see in the 30-year treasury bond
market so otherwise we had a failed higher high now when this takes place by itself it
doesn't mean anything but if you're looking for things to justify a long on the dollar
and you see a lower high on the 30-year bond market then we go to the lower time
frame interest rate and we're looking at another opportunity comparing the same
highs this one is relatively unchanged we'll just say it's flat to neutral so it didn't make
a lower high in in comparison but it still didn't make a considerable higher high either
and finally for the five year we can see that there is clearly a higher high formed on
the five year interest rate or short term so in the short term curve we made a higher
run on the five year note an unchanged high on the 10 year note and a lower high on
the third year now by itself that highlights there's a shift in the interest rate market
now what did we first start with this module that interest rates are the number one
leading driver for price action in concurrency markets there's nothing else that drives
markets more wild in the currencies than the interest rates that's that's what makes
the whole world go round so if we understand that we're seeing a divergence
between the actual underlying five-year 10-year and 30-year interest rate markets
you can see that shift is pronounced it's you can clearly see it you don't go into
looking at the bond market just for these types of scenarios you have to have a
predetermined idea of what the market that you're about to trade should see in terms
of bullishness or bearishness that brings us back to the us dollar index the same
reference point in time between the fifth and the eighth or so we saw that the dollar
index went lower made a lower low and it traded down into a significant price level
now this is on a closing basis and that's all you need but the point is we're seeing a
significant divergence between the lower low on the dollar index and that of the 30-
year treasury bond failing to make that higher high as it should have made
comparably when price moves into previous levels of institutional order flow we as
traders have to anticipate dynamic price movement that looks like this and we talked
about this this week in the live sessions we had an old order block back in uh
midpoint of november it was the last down candle that had already been traded back
down into it in november 15th one more time and it bounced away from that but we
traded all the way back down this week during the 8th of december just to get back
into that 9950 level and it was strongly rejected and the market rallied hard on the
dollar index which obviously would do what for foreign currencies it would give us
reasons to trust bearish order blocks bearish turtle suits or return back to fair value
closing in big ranges that drop the lower once those are closed in after a retracement
higher we could look for continuation and roll over for lower prices on foreign
currencies but this previous order block is what you would be looking for at that

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moment when price trades into that order block you want to take a look at the interest
rate markets to see if there's any clue that the smart money is working that level so
many people ask me how do i validate what order block the trade off of and i just told
you with this teaching if you can see the interest rate divergence or interest rate triad
by looking at those 30 10 and five year if there's a divergence between the three and
prices hitting in a specific order block on the dollar index that gives you the green
light to go in and start refining the idea on that trade because it's most likely a high
probability setup so if we saw a bullishness for the dollar index then obviously we
would be looking for bearish situations for the fiber and the euro usd we had a level
of buy stops indicated before the week started and the mark came all the way back
up to an old reference point at 108.65 which is an old low if we go back further on
your charts i'll leave that for your homework but if you take a look at what's happened
here the market rallied back above that 108 15 108 20 clearing out the buy stops
rolled all the way up through to 108.65 trading back to an old low that's not shown on
this chart again i'll leave that to you for your own homework but the selling scenario
was justified because we've seen the bullishness on the dollar that's the reason why
we're expecting the dollar to keep pressing higher this week all through the rest of
the week and it kept doing that and as it relates to the foreign currencies it just kept
driving them lower and cable failed to make a higher high when euro dollar made the
higher high and dollar made the lower low so it's not always just simply looking for a
divergence in one specific location or one asset you have to blend a couple things
sometimes to get to understanding what the smart money is doing you can see that
the market has a couple different opportunities to be short relative to the strong dollar
but what makes that strong dollar so significant is that it had a divergence in the
interest rate triad so 30-year 10-year five-year had a failure swing at the moment that
the dollar was trading down there so once you see that it gets everything back in
sync where the market's going to be driving in one direction or another based on
what direction the interest rates are going so if the interest rate markets are dropping
lower that means interest rates are going to go higher which means the interest rate
is going to drive the dollar index higher if the dollar index is going to go higher that's
going to drive foreign currencies lower and everything fits together like a a like a cog
you know on all the gears come together and they start turning everything makes
sense but it doesn't always work like that sometimes there's a shift that takes place
on a longer term basis and it may mess up things on a short-term time basis and
you'll have to allow some of those things to come up in your trading and just trust the
fact that over a long period of time these scenarios will repeat themselves and when
it does it'll give you a plethora of trading opportunities.

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we do to build some kind of an action plan so we can use the information in a

context where it helps us not just talk about it in hindsight well we have to use
the points of focus taught in the first month of the mentorship when price
action trades to a focus point like a order block a liquidity pool a liquidity void
or fair value gap you refer to the interest rate triad and the dollar index this will
confirm smart money is behind your trade idea if there is no obvious indication
that they are moving large funds pass on the trade idea and look for new ones
that do so what do i mean by that if you're looking to be a buyer of dollar the
interest rate market is going to show you the divergence that i showed here
today with a failed higher high among all three they should all be moving
higher highs if the dollar is moving lower but if we see a bearish tone on a
dollar index this is what you would see you would see the interest rate
markets making a lower low another one making a lower low but eventually
one of them will fail to make that lower low and what that'll do that'll validate
the sell signals that you're getting in the dollar index at a bearish order block
at a um old high that's been ran out for a liquidity pool or trading up into a fair
value gap closing in a range then you can expect to see that dollar roll lower
and interest rates on these three to start trading higher in their price which
means interest rates will be dropping because as these uh interest rates on
charts as they move up or trend higher that's actually interest rates declining
and that's going to be bearish for dollar so hopefully this has given you one
more insight to understanding how to validate the order block liquidity pools
and liquidity voids and fair value gaps it's not simply just looking for every up
candle to sell into or every down came to buy into you want to look behind the
scenes and get closer to the underpinnings of the marketplace because the
smart money is going to make a very clear fingerprint when they're in there
and it's going to be seen in a shift in the interest rate markets like this and it
validates your setups.

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Reinforcing Liquidity Concepts & Price Delivery

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external range liquidity and internal range liquidity and the difference between the
two and how we can utilize both okay we have a old high back here okay and we
have an old area of consolidation or equilibrium it's about halfway from below up to
this high price sweeps above this old high here and that will be a form of external
range liquidity because it's outside the
03:19
range from this high in the lowest form so that was the range prior to the new
breakout Above This High seen here so price at this point we know we have the
equilibrium down here but more importantly we have clean blows right below there
say we look for a move that could potentially come down to that level okay and price
starts to drop trading down now what it's doing is it's pulling back inside of all these
up candles okay so once we click on the old high we would expect some measure of
retracement and when the retracement occurs what
04:23
we're looking for is where is the most logical area for it to pull back down into now if
you look at this candle here we have a previous up candle rather large candle then
we have this candle has a wick so at one point this candle opened traded lower so
there was a pass-through on the range between both these candles in this area so
the delivery of price was on the up move here and then down on this one even
though it's an up close it was offered twice all through that range so at the top of this
candle here and

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04:58
it's it's open on the next one that's where I would expect to see a measure of short-
term bounce okay and price trades here stalls a little bit and goes right through it
comes back retests that same level in here okay right in Here It ultimately comes
down clears out these equal lows now what I want to look for is at this moment right
here where is the next level of liquidity because we've already traded below this low
here now in reference to the low here and the high up here which we now have
05:42
to redefine is that high the stops below these lows in here would that be represented
in the form of external range liquidity or internal range liquidity in the context from this
high to this low its internal range liquidity but from this low to this high its external
range liquidity because it's piercing it down here in other words we created the range
from this low to this high so we expect this range to be given up and run the stops out
here once that's done if we are going to go higher and bounce higher or trade higher
06:30
or you make a new high here we don't ever know that we look for the areas of
liquidity so we know there's a up candle here so we can reference that low valve
candle not the black one here the top candle that opening I'm measuring that
opening price and extending in time and what else do you see on this chart see this
candle swick and this candle's Wick in between there price was only delivered on the
downside so we have a fair value Gap so if we start to trade higher we can expect to
see the market want to reach
07:18
up into that 106.50 level if it trades through this green candle or up candle it's going
to want to reach up into the high of this candle 114.55 and the low at 1 15.95 so we
can use 115.90 115 80. or we could use uh 114 55 or 114.60 any one of those levels
would be nice but this would be what from this high down to this new low if we see
I'm referencing the lows over here that looks cleaned out not that I'm drawing it to
anything I'm extending out keeping you mindful that's the range because we cleared
out these lows with
08:06
this new low and now this high is the high so the range that we're trading in now is
this low and this high so if we see price trade up we would expect it to reach up into
106.25 if it gets through the up candle we will be expecting it to trade up into this area
here closing that range and then ultimately it could trade as high as this candle is low
118.86 so we'll call it 118.
08:51
85 to 1890 okay so inside this range from this low to this High we would be aiming for
internal range liquidity price trades all the way up right into the Shaded area here
right there now because we're looking at a monthly chart of the Japanese Yen we're
going to drop down into a daily time frame and we're going to see how those levels
I'm sorry we're going to drop into a weekly chart I'm going to show how these levels
affect the price action in the delivery so we have that fair value Gap a little bit more
refined you can see
09:39
the wick over here and the Wicker here so we can adjust that and refine that a little
bit more so that way we can have the exact area which price will look to fill in it's only
on this down can the price is delivered on the sell side no upside's been offered until
now we're starting to see it okay so every time the market creates a trading uh range
going lower you want to mark off the previous High and the new low and when price
trades back up you're trading inside that range so if you trade short at a bearish order
10:12
block which is the last up candle that's going to be a return to internal range liquidity
but you're going to be looking for external range liquidity to exit on which is to stop
below the low price runs down hits that that's where you look to exit predominantly

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my entries are internal range liquidity entries with exits at external range liquidity in
other words I'm buying inside the range and selling it outside the range once it
breaks it if I am in sync with the marketplace and I know what direction it wants to go
and
10:49
we're framing that based on the monthly chart here so you're going to see the
benefits of doing what I'm doing here if I'm looking for it to go higher relative to the
monthly chart any time that the market comes down below a short-term low I can be
a buyer of that on short term external range liquidity or buying up stocks but the
expectations of the range will continue going higher seeking monthly internal range
liquidity in the form of this fair value Gap and probably confusing some of you they're
listening
11:24
very technically I'm sure but the the point is once you understand on a higher time
frame where the market wants to go you'll be able to frame your trade setups as we
drop down into a daily okay so we can see this daily chart in here Market creates
small area of institutional order flow comes down hits that same older block rallies
through now watch what happens in the grand scheme of things in the monthly range
we are trading every time we create a new high ER High higher here here and here
each time make a new high
11:58
that is a run on external range liquidity on this time frame being the daily but on the
monthly chart it's still internal range liquidity because you're just inside of a larger
monthly range when we understand where the monthly and the weekly are trying to
trade to when we look at Daily setups like this this creates the recipe if you will low
resistance liquidity runs because you're trading in sync with the monthly where the
monthly will most likely want to see price go up into so every time a run above an old
high is
12:37
expected that's going to be framed as a low resistance liquidity run every time we
see this you can see how price reacts to it very little resistance on the part of price to
get through these levels because it has an agenda it wants to get to a specific price
level relative to a higher time frame because the funds trade on the monthly and the
weekly basis so if we can keep that in context and frame our trades with this idea we
will always be able to classify a trade whether if it's a high resistance or a
13:19
low resistance liquidity run so if we drop down into a four hour chart we can see the
highs being ran out every High has very little difficulty getting through it because it's
framed on low resistance liquidity runs based on the higher Time free monthly you
can't even see the range at which the monthly has that fair value Gap in this high is
broken through no problem this High here broken through no problem this High here
broken through no problem now it's a small little consolidation but ultimately it runs
aggressively and
13:57
it's going to reach for these highs here I get questions so many times about how I
know where the Market's going to be reaching for for specific buy stocks when we do
our live session this is how I do it I use the higher time frame institutional order flow
to frame out where internal range liquidity is and where external range liquidity is
where is the buy stops and what kind of stop or what kind of Entry am I using and
how is it aligned with the higher time frame the market trades down clears out some
14:30
stops in here gaps down below on the election closes in this range back down to a
previous bullish order block rallies through and hits the old High over here all these
Highs are cleared out there and ultimately takes off and runs out another old high
which will zoom out in a moment see okay all through here and ultimately trades up

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into that monthly fair value Gap once we cleared this High here and we cleared this
high here we came back and created a gap we created a gap here came down and
closed in the gap and then ultimately aggressively ran
15:15
right up into that monthly fear value Gap so what I want you to look at is every single
time the market all through here every single time it gave a retracement this is a four
hour chart so we're going to go down into a 15 minute chart unless it's about these
days okay and I want you to look at how price responds when it gives you a new
range okay got a low here and a high price trades down into degrees order block
whereas external range liquidity here so you're buying an internal equip internal
range liquidity what's
15:56
expectation you're going to see price move to the outside of the range created by this
little move here so that's your range of trading in for the setup to exits here but do
you collapse your entire trade no you're looking for the ranges to take out highs all
these highs in here we get another rally and then retracement okay so it's the last
down candle right before the up move price trades back down into it they populate
more buys on that order block where's the external range liquidity at
16:28
Above This High here and over here it runs through it the small open solidation we
rally away comes back down into the down candle we populate more buy orders
what's it going to run for that monthly fair value Gap look at the reaction once it gets
up in there lots of profit taking lots of it right in Here It ultimately comes back and
starts to trade a little bit higher I think it's uh indicative of probably seeing a little bit
more uh rally when we open up on Sunday but going back even further you can see
every single time
17:05
the market creates a nice impulse price link we have a nice impulse price swing here
comes back down bullish order block external range liquidity comes down and hits
this order block again here rallies through comes back consolidation it eventually
presses through clearing out the external range liquidity here or the bicep above the
highs the range that's created from this low up to this high the down candle he trades
back into a here rallies away now all this is what you have to sit in if you're a position
17:41
Trader well ultimately if you give it time all it's going to do is Recon it's going to return
back to a previous order block here like it did here and recapitalize more buy orders
because it's a long-term objective to get up to here so they're going to have to buy
some here buy some more here let some time go by and come back down to it again
buy more of it again and one more time and then ultimately runs away because they
have their position built averaging around 113 50 to 113 25.
18:14
in that area many many examples of low resistance liquidity runs on the dollar Yen
we have a low price rallies up comes back down previous order block run from this
load to where external range liquidity buy stops runs about here same thing here we
have a low price runs away from this consolidation well I'm not using this low Michael
because this is a consolidation in here price moves away from that comes back down
hits the previous order block here rise away what's it going to run for external range
liquidity here
18:58
running up okay you're looking to buy with internal range liquidity or a bullish order
block inside a previous range and trying to take profit at an old high or above it while
you're in sync with a higher time frame directional bias based on institutional order
flow like we described earlier with the monthly ranges and looking for this fair value
gap on the monthly chart because just like any other time frame the Market's going to
want to efficiently deliver price if there's no price trading up in this

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19:34
very value Gap that's been shown on the monthly chart that we have shaded up here
in lit I guess it's like an orange red color the uh they're going to want to drive price up
to that level so anytime they can create a new buying opportunity that they're going
to build more of a position on we have a nice liquidity void in here price comes down
fills that in aggressively runs away the range here from this low up to this High comes
back down retrades back into the bullish order block on internal Rings liquidity or Low
20:08
Shoulder block with the expectation of unloading it at external range liquidity above
the Range High here price trades above it here many many examples almost two or
three a week where you can see the setups they offer us an opportunity and even on
a pair I don't even like to trade the dollar again we have a range here from low up to
this High trades back down to previous bullish order block you can buy here with the
expectation of seeing a range expansion to exit on a external range liquidity or buy
stock
20:43
because we're looking for buys only we're going to be looking for any type of impulse
price going up then a retracement back down into a previous order block if we don't
see any ranges that create new buying opportunities we can Target lows so you can
go through the marketplace and find all of the Swing lows and wait for price to trade
through them on the downside and when they do that they're doing what picking up
orders to accumulate new lungs like you see here right here right here and the other
time it's a rally away
21:40
comes back to the produced bullish over block rallies away comes back to the
previous order block it rise down into a previous order block more consolidation takes
the stops and then runs above claim these equal highs out I don't need to draw this
one it's already there equal lows takes the stops rise away so the type of Trader
you're going to be is going to be based on what you see easily in the charts you're
going to see either Turtle soups and you're going to be looking for buying of cell
stops or
22:14
selling of buy stops or you're going to be looking for a return back to fair value where
you're looking to trade inside the range or buying internal range liquidity and by
Framing the marketplace in either one of those two disciplines you'll have no problem
going in and finding setups it's not that you have to find a setup every single day but
you will finally set up once a week that's all you're looking for you're looking for one
setup per week so I'm going to zoom out to the hourly
22:49
I want to scroll back from the time at which price did trade up into the objective based
on the monthly chart we had a nice buying opportunity here on Monday and it was a
Thursday buy as well we have a Monday buy a nice uh looks like a crossover into
Tuesday nice buying opportunity here definitely a Wednesday Buy in the previous
order block here um nice bite on Tuesday here on this week nice Buy on Tuesday
here and on Thursday this is the election so we're not going to talk about that one we
were on the sidelines for that period
23:39
so we would not have been looking for anything on that okay so we have a nice little
Buy on Monday turn back to the previous bulls or block and then we have a
Wednesday buy scenario in here as well running a stops here on a Wednesday so
think about this if you know your higher time frame monthly chart is calling for a run
higher on price and we talked about this months ago when uh dollar being bullish and
dollar Yen should be going higher and if we know that there's a retracement taking
place or a correction if you will
24:21

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the Market's trading lower our mind shifts to okay where are the sell stops that they're
reaching for because underlying the market pendings are bullish for a dollar yen so if
the Market's predisposed to go higher but it's dropping we don't say okay well I'm not
looking at that pair or I'm not looking at that market what you should be dealing is
okay I'm going to be looking for external range liquidity on the time frame I'm using
right now is the hourly chart you'll be looking for
24:52
any time the Market's trading lower if it's trading lower where's the lows it's trying to
breach where is it going below here and here so if we know that they're going to be
expecting what a reaction there quick reaction away not just hang down there and
just you know Meander around we want to see it go down there and then show
Wellness to go back away from it when it does that it's tipping your hand then you
just wait for a bullish order block it won't it won't always happen right away like this
one
25:22
gave one that's pretty uh pretty nice it came created a down candle it was created
what this came up preaching this candle is high so now this down candle becomes a
bullish order block so anytime we trade back down into the range which is here we
can be a buyer but this new down candle here okay gives us another opportunity to
expect another return back to this candle which it never does here but it creates
another down candle here eventually hits it here so there's a buy so you have to wait
a little bit and not
25:55
it's only hours each one of these candles is an hour so the very next day you get
another buy here then here we see price go below this low runs the stops out it runs
the stops okay does it stay down there no it quickly runs away okay now we wait
when we wait for a price to come back down to the last down candle here you look
for the return back to that range does it want to run it after it takes this low certainly
once the run it runs higher and every time it takes out a new high it's showing
willingness to go higher
26:26
it's giving us a confirmation that there's underlying strength in this pair even if there's
going to be like declines like this this is all on the heels going into uh the election
again I can't stress this enough that's the reason why I was on the sidelines the entire
first two weeks of November I just didn't want to be trading because of the potential
Fallout or the uncertainty and that's okay with me I have no problem you being on the
sidelines for a short period of time it allows me
26:55
clarity um we had a really nice spot here on Wednesday of that week I'm just pulling
out the Salient price swings that took place each week uh we had a nice Buy on
Wednesday here and we have a nice Buy on uh Friday for a position entry nice
retracement here real aggressive retrace now watch we don't know what's over here
yet put one price Dove down like this down into the 120s what's it looking for to the
left what's over there it's returning back to this level over here right there trying to see
that full shoulder block
27:43
does it show among someone rally up so every week There's been one setup in here
we saw price rally away it comes back down to the previous order block and rallies
through it's not that you're trying to capture every piece of the weekly range that's not
what I mean that's not being Illustrated here what I'm showing you is how you can
find one setup program it doesn't require you to have the full entire weekly range I
will go into discussions about how you get the weekly range but for this teaching here
I want
28:16

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you to think about how you can frame the larger time frame where the market should
be going and then how it helps you define what a low resistance liquidity run would
be versus a high resistance equilibrium run all of this area down here is where the
market traded down into on a monthly chart clearing out that equal low I'm going to
leave that little area there on the chart it's all down in here won't you clear all this out
all these loads were cleared out in here and price rally up aggressively Okay so
28:59
when we take these ideas from the higher time frame and we transpose them onto
the lower time frames every time we expect to see the market rally what we're
looking for is a willingness to have very little resistance because the underlying
Market pinnings that are bullish on the higher time frame so if the monthly chart's
bullish there's going to be no problem at all trying to smash through short-term highs
because the Market's going to be really driven by a higher end money so the monthly
chart being the key player in your
29:30
trades on framing low resistance liquidity runs where is the marketplace seeking to
go on the monthly chart if you can't ascertain where the Market's going on a monthly
you just simply drop down into a weekly chart and by dropping down until weekly you
can still see these areas at which the market should be inclined to trade up into the
close-in because again they only offered price on the downside we saw a price
breaking short-term highs here then this high was broken here so we have a potential
Market maker buy profile where it's
30:06
going to want to go back up into areas of institutional order flow over here in this
consolidation but there's a fair value gap before you get to that point right in here and
that's where you saw price trade right up into that that 115 uh 25 to 115 75 uh
reasonable upside objective all through here all the way through here for dollar based
pairs that have the Dollar on the front of their name like dollar Yen or dollar swissy
okay those pairs should have been seen strength because of the underlying strength
in
30:43
the dollar so in summary to make it a little bit more easier to understand because I
was a very broad brush with a lot of the ideas but I want you to study this because it
helps you get to why I look at certain trades as low resistance liquidity runs and that
way if you understand what a low resistance liquidity run is you will know what your
trades are not in terms of a high resistance liquidity run you don't want that to be a
trade you're trying to take you want to be trading with the least resistance
31:20
so every time we look to be a buyer on a retracement back to a previous order block
we want to see that high being taken out but if we're trading against a higher time
frame and there's no real reason to see the funds okay move the marketplace to
those levels it's not going to be a low resistance liquidity run it's going to be a high
resistance liquidity run and they're the types of Trades that you sit in too long or they
don't pan out right away or they turn right around on you and bite you in the rear end
and
31:49
stop you out so in simple terms let's give you a little cheat sheet list here okay you
want to be looking at a monthly chart or weekly chart and determine where is the
market more likely to go to and by having that idea if we're bullish on the monthly or
weekly then we'll be looking for Buy signif Buy signals on the lower time frame like
the daily the four hour to one hour and we would be looking for bullish order box or
turtle soup Longs with the expectation that any short-term highs on those time frames
32:29
that's where the objective is now let's assume for a moment that you're looking at a
hourly chart and you're underlying asset Direction bias is bullish on the monthly and

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weekly or or one or the other but either one of them has to give you that directional
bias if the directional bias is bullish and you see an hourly chart give you a return
back to what would be otherwise seen as a bullish order block but the high in
between the range low and the high that retraced from if it's only 20 Pips is that a
trade
33:08
that would be viewed as something that you would take in my opinion no because the
range is only 20 Pips when it returns back to the previous order block for instance if
this is say an hourly chart or uh maybe a 15 minute time frame and this is the range
you're looking at here this retracement if the range is only from the order block where
you would be buying up to the high in between if that's only 20 Pips are you going to
be taking that type of trade my opinion would be no I wouldn't personally take that
trade but if I saw
33:44
a sling like say this low here and up to this High here and there was an older block
that allowed me to get into it down in this point here if I could take that trade and say
this was 40 Pips that would be a trade I want to take because if that's 40 Pips from
where the high is and where the order block entry would be that means I could
potentially have 40 Pips in profit because I'm going to try to get out with a run above
that high and exiting where the buy stops would be in the form of a low resistance
liquidity run
34:15
because I'm trading inside of the monthly and weekly range that would be viewed as
internal range liquidity which has very little resistance on the trade on a lower time
frame many folks would see that as resistance so that it's going to hold back price
but on the monthly in the weekly chart it's indicating they want to go higher so it's
going to have very little difficulty getting through it but the precursor is you want to
look at Price links that offer about 40 Pips if you can see anything at 40 Pips or
higher
34:49
in looking for a retracement to go along on that that gives you a a reasonable first
profit objective now obviously if you go out to a larger time frame okay and use
bigger price slings that gives you a lot more depth in terms of what you can pull out in
terms of Pips so if you're looking for say you're a Trader you want to have nothing
less than 50 Pips okay well that's great use a 30 minute or 60 Minute chart and dial
in looking at your Marketplace for buy signals that set up those price settings so in
order to get price uh
35:26
impulse price swing like this and say this was a hourly chart okay this in this range
would be from this high down to that low if that was 50 Pips or more that would be a
wonderful opportunity for you to get your classic 50 Pips or more setup so if you have
a weekly objective let's just say you've done the numbers you've worked it out where
you want to make 10 a month and you figured out that uh to get 10 a month you need
to make 50 Pips on whatever Equity base you have okay and you figure out how
many Pips you have to
35:58
have what your stop loss has to be a blah blah ends up you just want to hit that
number and 50 Pips will get you there so what you do is you want to look for ranges
that have 50 Pips or more preferably about 75 to 80 Pips is perfect because even if it
doesn't even break the range and go up above this old high it still gives you the
opportunity to get that 50 Pips so don't think just because I'm saying that we have to
be a buyer down here and looking for exit above the old high that you can't get all of
your objective and
36:28

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your goal inside the range because again that's that's the beauty of trading price
action because you don't need the range to break if you frame the right swing you
don't need the range that you're trading in to break to be you know wildly profitable
you don't need it to move well beyond the Range High either if you're looking for the
brake in other words if you just want to see it like you didn't need it to do all this if you
were buying down here in the range from this high down to
36:55
the low where you're trying to buy let's say 100 Pips you could handsomely take 75
Pips out of that and not even get the full range but you can't do that if you try to do
every entry on every 30 pit price link for 25 price point because you're you're trying to
get in right now and you're looking for anything to get you in if you're much more
selective in your setups you're going to trade a lot less but your setups are going to
be a lot more Choice they're going to be more
37:21
potent they're going to have a lot more uh likelihood of panning out for you in your
favor but you can't do that okay if you trade every single setup in every time frame
you got to pick a time frame that fits what your model is if you're trying to get you
know 250 Pips you know um over a course of two weeks or so okay you're not going
to get that trading on a five minute chart and looking for those types of price lines you
need to be living on a four hour chart or a daily chart and trading those price swings
and looking
37:56
for those those levels and that'll give you you know those types of objectives and
returns but to give us multiple examples on a day-by-day basis I use a 15-minute
time frame intraday to show you how many times you can see something setting up
and while it won't always deliver five to one or three to one even sometimes it will
deliver a lot of price action study and then we move out to a hard time frame where
we're only working off of an analogy chart it'll give us a great more opportunity to talk
about how the the
38:26
moves that take place that move a lot more than 30 40 50 Pips we can get into the
range of 100 150 Pips okay those types of setups they're more fun but you have to
sit on your hands away a little bit more it's not much more than sit and wait but that
framing the ideas with the higher time frame monthly and weekly and determining
where they want to go keeping that perspective in mind every time we look at an old
high more bullish on these lower time frames what that's going to do is it's going to
build a
38:55
model where we can see clearly that it's a low resistance liquidity run when we buy
and we don't have any fear of looking at that as a resistance level or this is a
resistance level we will see the market want to draw up to those levels because
there's buy stops above that that's why the Market's wanting to go there you see how
quickly it tries to get to that level here and then once this High has taken place what
does it do it doesn't waste any time it quickly gets up there Above This high and it
alternating runs
39:23
aggressively and this High here if we were bearish on the monthly chart one weekly
chart we will be looking for the opposite we would be looking for retracements higher
and making low resistance liquidity runs to break below a swing low and we would
look for Price swings of 50 I'm sorry 40 Pips or more as a high opportunity High odds
opportunity for a day trade or a short-term trade if we use an hourly chart we could
have a little bit more potential range in terms of Pips potentially 75 to 100 Pips or so
and that'll give you the ideal setups
40:02

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that you'll be looking for if that's your objective so a lot of folks that are in this
mentorship and those that are even outside the mentorship you know my email box
gets littered with you can you tell me how to make 100 Pips a week okay that's easy
what you need to do is you need to trade a four hour or one hour chart nothing less
that's it that's all you're gonna do and you wait and you look for scenarios across all
the majors and you'll find a hundred Pips price swing every single
40:30
week but that has to be your model it can't be because I just said it and you go out
there and start trying to force it to happen if you don't have the uh the psyche the the
do that it's not going to work but having these higher time frame charts and give you
that directional bias where it's going to go it helps you frame whether the trade you're
going to be taking is in fact really a low resistance liquidity run or is it really a high
resistance liquidity run if you develop your skill sets on the higher
41:00
time frames it's the same thing we do in the lower time frame but focusing primarily
on what the directional bias is going to be on these higher time frame monthly and
weekly it will help you resist the urge to do those many times where you could go in
there and you you do a trade because you get impulsive or you just did I don't even
know why you did it because I've done it too you're looking at the chart and say ah I'll
buy it now or I'll sell it now and you didn't take any consideration
41:25
into what the hard time frame charts are telling you and all of a sudden it just Rockets
the other way and then you look back you know weekly and said oh there it was it
was hindsight perfect 2020 I should have did this opposite if you stay in the
directional bias that the monthly weekly tell you that you should be doing every trade
that you frame has a higher odds of being a low resistance liquidity run that's all we
do with a market maker perspective we go in looking for that because they're driving
price to where
41:56
the orders are and it's not random where these orders are they're logical locations
when it's bullish the Market's going to go above short-term highs how far over what
when's the last High we never knew that we just know each time this is a range from
this high down to this low it trades through it okay so now what's the new Range this
low this high well it broke that what's the new Range okay well this low to this high up
here and then this sphere value got if it trades on through we know we're looking for
42:25
return back to this up candle here and then maybe these highs here and ultimately
above 125.77 we don't ever try to call a high in the marketplace that's not what we're
trying to do this was a logical area on the monthly chart to trade to and it did so after
it did that we now have to evaluate does it have more willingness to keep going
higher or would it be real more prudent for it really to go into a consolidation here and
I think logically it should but you know the Market's going to do what it's going to do
but in
43:00
this module the aim was to get your mindset on a monthly or weekly capacity and
that way when you go into the lower time frames every Trade Center you trade with
in that directional bias on the monthly and or weekly will help you find the low
resistance liquidity runs that you're looking for they are the high probability setups
they're the ones that have the immediate payouts they're the ones that give you the
immediate responsiveness to your entries and has very little drawdown.

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Orderblocks

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reinforcing order block theory selecting and avoiding and we're going to first
talk about the bullish order block everything i say here you'll just reverse for a
bearish order block to save time definition of a bullish order block is the lowest
candle or price bar with a down close that has the most range between open
to close and is near a support level validation of a bullish order block is
01:21
when the high of the lowest down candle or price bar is traded through by a
later formed candle or price bar entry techniques using a bullet shorter block

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when price trades higher away from the bullish order block and then returns to
the bullish order block candle or price bar high this is bullish and can be used
for a bullish entry defining risk with bullish order block the low of the bullish
order block is the location of a relatively safe stop loss placement just below
the 50 percent of the order block total range
02:04
is also considered to be a good location to raise the stop loss after price runs
away from the bullish order block to reduce risk when applicable okay let's
take a look at a supposed support line now that can be in the form of a old low
on a long term or higher time frame chart it could be an old high where price
has moved above recently and now we're trying back down into it so simple
support resistance ideas are just enough here but the main thing is you want
to be using it on a higher time frame charts like a monthly weekly or daily
02:42
and eventually you'll see price trade down into this level that you identified as
a support level once price trades down into the support level and it could trade
to it or just through it doesn't make a difference but what we're doing is we're
waiting for price to show us indications that smart money or a large body of
big flows or those individuals that are on an institutional level they have a
whole lot more collectively than we do in terms of money when they
participate in a move it'll be seen in price action
03:14
so when we have this down candle we have already assuming that this may
be a bullish order block we don't know that yet until at a later time when
another candle trades through it what are we specifically aiming for we're
identifying our focus the down candle is high when that is violated with a new
candle and it trades through that high now we have a validated bullish order
block this candle validates the down candle as a bullish order block now this
moment if we trade back down once that down candle or suspected bullish
order blocks
04:00
highs violated we can now highlight that candle's high and even in the very
candle that broke that down candle's high if it trades back down to that down
candle's high or the voltage order blocks high that could be a retraded price
that which we could day trade off of or enter our longs early in other words we
don't have to wait for a later time for it to trade back down to this level
eventually price will run away at this point if you didn't enter on a re-trade at
the bullish order blocks high you're simply going to be waiting
04:42
for price to want to pull back now we have indications that there has been
displacement in the marketplace that means someone with a whole lot of
money and a whole lot of interest wanting to see higher prices is now in play
they are participating in the marketplace this is the evidence in price action
that you have institutional sponsorship behind the move large flows or
institutional traders have the capacity to move price whereas we as lower
grade traders in terms of retail or smaller traders in terms of respect of a
05:18
bank or a large entity in an institutional capacity we can't move the
marketplace but they as a whole collectively can so what we do is we wait
we're patiently watching price we anticipate prices start to retrade back down

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into that down candle or bullish order blocks high at this moment we can set
alerts we identify the high on that candle now i'm using the bodies of the
candles you may end up using the wick but i want your focus primarily on the
bodies of the candles and when we talk about wicks i'm going to overlap order
blocks with
05:58
fair value gas because that's going to be the answer to many of your
questions as it relates to when do we use the wicks and when do we use the
buys of the candles but primarily i want you focusing on the bodies of the
candle when we're talking about order blocks as a whole so at some point
when we see that level okay that high of that order block when we're close to
it we can now set an alert we can set our platform to remind us with a text to
our phone or email us or however it is that you would be uh
06:28
alerted by your platform some platforms have pretty sophisticated means of
contacting you others are just simply a you know an audible alarm that goes
off on your computer to draw your attention to a specific market but until then
you're going to submit to time you're waiting now this is sometimes the
hardest thing to do as a trader we identify what we're looking for in terms of a
entry but you have to wait for price to get down there while price is trading
lower you should already formulate an idea of what it is
07:03
that you're going to do in terms of risk how much you're going to put on the
trade when you buy long and where you're aiming to get out of a market with
a profit all those things should be factored in during this time eventually price
will drive down into that down candle or bullish order blocks high at that
moment if you're in front of your charts that's when you enter the market with
a long position if you have a limit order you're going to add a few pips and
preferably it's about five pips we like to add
07:36
to a bullish candle and that way the spread will be able to kick us in on a long
entry but you don't have to always rely on a limit order you can go and rate
the market as it hits that down candle now sometimes it'll drive a little bit
deeper into that bullish order block and that's okay but for now i want you to
try to key off your demo entries on the down candles body of the candle the
high and the cut or the open in this instance any down candle the body is
going to begin with the opening and it ends with the close
08:17
what we're actually looking at is internal range liquidity now when we're
trading inside the range and that range is defined here what we're looking for
is an expansion up into a known level of what what's up there well that's going
to come in the form of external range liquidity the external range liquidity is
where we're going to be looking to offset some or all of our long position now
we identified the buy level we've entered the market before we do this what
we've should have had in mind
09:01
is i ideally where we're looking to take our profits that's up here above an old
high and that's going to be in the form of buy stops so if we're buying or
entering long inside of a known range at a bullish order block at internal range
liquidity we're buying the liquidity it's offered at that level we're going to be

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looking to sell our position to willing buyers in the form of those individuals
that hold buy stops above that old high that's all well and good for profit taking
but what do we do for risk
09:36
we take our attention back down to that bullish order block because it's going
to give you everything you need for your trading plan we identify the entry at
the open of the down candle that's our buy point or five pips above it but we
want to focus our attention in the midway point of that down candle that's
going to be in the form of the mean threshold ideally the best order blocks will
not see price trade down below the midway point of the entire body of the
candle you're going to measure the open to the
10:10
close on the down candle to measure where the middle of it is do not use the
wicks don't use the very high or the very low measure your fibonacci level 50
level or halfway point is the mean threshold only on a bullish order block it's
the same thing said with a bearish order block but you just don't want to see
price drive down deeper than the mean threshold by very much it can stab
through it just by a little bit but we primarily don't want to see it trade down
there at all the better order blocks won't do it at all
10:44
and your protective cell stop is going to be below the bullish order blocks low
or below the close now at this point depending upon where that low is it could
be the low of the wick but primarily you're going to be looking at the low
formed by the close of the body of that candle now again focusing on what we
anticipate in price eventually price should show a responsiveness and trade
up and through our old high when that happens you're going to be looking to
take partial profits or all your profits depend upon how big that move was and
11:30
how much profitability you obtained what you're actually trying to do is you're
going to be pairing your long exit with willing buy stops and that is essentially
bullish order block trading in a nutshell it's been complicated by many people
on the youtube that's adopted it and those that want to use it on twitter and on
social media they've shared some several ideas but i want to focus on the
simplicity of them here and then we're going to graduate into more teaching
uh later on in this month that are going
12:03
to be subordinate sub topics that are going to be taught to you during the
week of christmas so i'm going to give you actually more amplified teaching
with the order block so this is not the entire treaty on [Music] order box as it
relates to buying and selling

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liquidity based bias okay if the monthly chart is bearish the weekly charts
bearish and the daily charts bearish that'll give us a wonderful opportunity to
get in sync with institutional order flow intraday charts four hours and less will
be correcting and retracing higher
12:49
now again the markets are predisposed to go lower because the monthly
weekly daily we have arrived at a bias that we have seen price want to go
lower it's been making lower lows and lower highs support levels are giving
way resistance levels are being formed and being respected when you see
those evidences in price along the lines of the monthly weekly and daily we
can zero in on the four hour okay and start looking for liquidity on the buy side
in other words there's going to be a premium built into the
13:19
marketplace or a rally you're going to be looking to sell rallies protected by
stop raids or returns to bearish order blocks or fair value gaps and or filling of

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a liquidity void each offering a potential low resistance liquidity run shorting for
a target under a recent low what low would you be targeting well you want to
be primarily looking to see what's near term on the daily chart what liquidity is
resting on that daily chart your trade on a short could be looking to take
advantage of buying back below
13:56
a daily low where cell stops would be resting if there is an objective that you
can see on the weekly chart much in the same way we would have identified
something on the daily we would be looking for that objective as well primarily
you'll be trading in the direction of the monthly chart because that's where the
large funds and institutional order flow is going to begin and then it moves
down into the weekly chart then it moves down into the daily chart the daily
chart is the most dynamic of these three time frames and
14:25
you'll see a lot more trades that actually counter long-term higher time frame
institutional order flow so that weekly chart will have a lot longer time period
required to change direction versus the daily chart that can go up and down in
multiple times and still maintain the bearish nature of the weekly and the
monthly and obviously the monthly takes a long time to change directions and
that's where the power of what i'm going to teach you in this module will give
you okay liquidity-based bias for
14:56
a bullish monthly chart bullish weekly chart and a bullish daily chart interest
rate charts four hours or less will be correcting and retracing lower this is
where you anticipate the market to enter into a discount and seek sell side
liquidity to buy from and what we just showed you an example of was the
bullish order block that you would use in this instance and we're actually going
to go into the dollar index and actually break it down show you all this
conceptually protective cell stop raids or returns to bullish order blocks or
15:30
fair value gaps and or filling up a liquidity void each offering a potential low
risk liquidity run buying for a target above a recent high just like we were
referring to earlier you're going to be aiming for something on the daily chart
preferably and you're going to be looking for buy stops above the marketplace
on a daily high it could be an um it could be yesterday's high it could be last
week's high that you can see on the daily chart it could be last month's high it
could be intra week high
15:59
okay but try to find something on the daily chart to give you a trade in terms of
uh framing your idea that you want to be a buyer and then preferably look for
something in the weekly chart that would support even higher because if you
have something higher on the weekly chart you probably will have a lot better
odds behind your trade if you're looking to move into a level on the weekly
chart and preferably obviously the monthly chart if it's bullish you will be in
sync with the institutional overflow that will be
16:30
seen by studying that time frame so let's take a look at the monthly weekly
and daily on the dollar index and give a conceptual idea of what i'm referring
to here using bullish order blocks.

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resistance levels you see here we have equal highs here okay and price
came down and hit level of [Music] support [Music] so that happened here
okay so we know that there's equal highs up here so what's above equal
highs what was taught to you in september it's going to be in the form of buy
17:25
stops it's too clean too neat and price come down cleared out an old low but
we're not going to talk about stop runs here we're going to look at this as a
support level okay all we're doing is classifying this as a support price comes
down hits that okay and we're gonna wait to see if there's a willingness to
trade away from it we see it happen here when that occurs this up candle
violates the down candle right before the level was hit at this support level so
once we have that [Music] we now have a order block that's
18:11
validated so now we can be a buyer if price comes back down into this
candles opening where it starts to body the candle that price level is 94.58
and just double check that the opening is 90 458 yes correct so when price
trades back down into it as you can see here move a little bit more show more
data [Music] price trades down into it on this candle now it quickly moves
away from it on this candle here [Music] but at that moment when it hits this
okay the the low on that candle comes in at 9406 9407 and the level we had
here is 94.58
19:04
so about uh about 50 pips [Music] thereabouts in terms of movement through
the level and again this is a monthly chart so a little bit of uh flexibility is
necessary i'm looking for very easy to find low resistance liquidity runs with a
bullish order block so when price hits it this particular month is august of 2016
so we could expect to see some bullishness in august and i'll let you see the
rest of the data here you can see clearly that the market did in fact trade all
the way up through to equal highs here the present time of this
19:47
recording uh december 2016. and we're going to take another look at this
down candle here because this order block becomes another support level
remember if we anticipate bullish price here doesn't that by nature support
price in the form of support and resistance ideas so this level here if we see a
down candle off of that level that could be a potential bullish order block as
well remember it's going to be trading down into that level and why are they
doing this they're going down there to pick up
20:23
more opportunities to get long at a cheaper price more discount price so when
price was a bearish can locator that's when the order block would have been
hit again okay and then what do we have here on this candle it violates this
down candle's high okay and the open on that candle is the open is 95.
20:48
98 and the level is 95.98 on our level here on the segment and you can see
price hits that level here it opens on this candle and trades all the way down
hits it this would be another support level chances of 18 prices trade higher so
we're going to do is we're going to drop down into a weekly chart and we're
going to start looking at this month here and we're going to put a vertical line
there delineating everything to the right of this vertical line and i'm going to
highlight it big and bold so we can't miss it and we'll just make

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21:28
it a big old bright red color okay so now we're going to drop down into a
weekly chart and we'll see how this gives us a weekly bias as well here's here
it is here price trades down into that level okay price rallies away when price
rallies away like that we're going to be looking for an objective to go long on
this level in here right in here so how many times did price move away from
this down candle is by and identified again we're going back out to a monthly
chart [Music] that's this level here so in
22:31
may prices validated that order block in may okay so we're going to move
over into may there's may okay and here's the order block level on the
monthly chart so price trades down into it here and we wait to see does price
want to rally away we're in this is the level you have to be identifying because
it's the monthly order block the bullish order block on a monthly level so we're
gonna broaden that one up a little bit [Music] okay and then price is trading
down into that so what are we waiting for we're
23:17
waiting for evidence to support the idea that the large traders want to send
price higher price does that here it violates this down candle right here it's it's
high is broken right there okay right there so now this order block on a
monthly level can be refined to this level right there okay so price trades
through this down candle now this down candle in a weekly has been refined
from a monthly level so now we can anticipate this level if it's traded back
down into it we could be a buyer at that level
24:03
we see that happening here price trades down into it notice the down candles
midpoint or mean threshold right here just pierces it just a little bit but does not
go down below the body of the down candle what do we do we identify we're
in a range the range is this low to this high it's trading back down into internal
range liquidity absorbing some more buys in this down candle we should see
the responsiveness on the upside now mind you this is a weekly chart look at
the body's respect of this down candle's opening
24:47
okay yes it trades down through a little bit but we could be a buyer at that
level here with the expectation that we're going to see a run we're at right
above these highs okay right above these highs so now here's when bearish
order blocks are not considered this up candle great for this down move here
we would not look to that as a selling point we don't look at that as we're going
to get short here when it trades up to that this up candle we don't look at that
and say okay we're going to get short why
25:21
because the higher time frame is suggesting we're going to be going higher
overall long term in the long term trend direction is going to drive a lot more
significant price action than looking for sales in other words we're going to be
looking to be buyers on dips and selling on the rallies to take profit so that's
when you want to avoid uh bearish order blocks because you're standing in
way of institutional order flow so there's going to be buy stops above these
highs here that we're going to
25:50

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sell our longs to they're willing buyers great we're going to be willing sellers if
price gets up to that point from down here in the form of pips we have a range
of almost 300 pips 290 pips potential range there okay and there's nothing
wrong with that so now also we have this level in here we can be keying off of
on a daily time frame and we can use a four hour time frame as well to refine
that we're going to look at this level here price shows the willingness to want
to move away and it does we can now identify this
26:47
level here which was the other monthly higher bullish shoulder block we're
going to refine that level too well how are we going to refine it well we have
this down candle right before the price moves higher this candle trading
through the last down candle right here that validates this down can that's the
bullish order block so we can borrow this level for a moment put it right on the
opening okay price validates the bullshotter block right there okay and you
can see that it trades back down through it in this instance we didn't get that
much
27:27
of a move away we want to see price move away we want to see that
preferably what i'm looking for is a move of whatever the order block is now
this is a notation for your notes okay this is the first time i've included this if
you see a move here's your order block what i like to look for is two to three
heights or the range if you will of the order block i want to see at least two to
three times that as a rally away and that will give me a nice decent
expectation to see a retracement back into to getting another
28:06
opportunity to buy long we have that there price rallies up to this point here
and then comes all the way back down into what we have this down candle
we could have kept that there and it would we would have missed any new
opportunity but look what we have here this down candle has traded into that
old order block as well so now we have a higher bullish order block right here
because this candles open is higher than this candle so now we can refine
that same level just up to a higher time frame or not a higher time frame but a
28:43
higher order block so now we can refine our level to that point right there price
moves away trades through this channel's high right here validating this is a
bullish order block again we're going to be looking for a rally of two to three
times the order blocks body's height so it has to trade about here here here so
at this point here we have a valid swing so now we can look for a retracement
back down this candle's opening is 95.
29:17
85 the low on this candle is 95.87 so it's only two pips away from that the high
on this candle is 95 86 so it still was only one pick away from that as well but
we always add pips to our levels to get in to cover the dealing spread we also
see another higher down candle that's higher than this one we have to move
our level up to that new down candle every time it creates a new down candle
that's going to be the new potential bullish order block price trades down into it
here so there's another opportunity a buyer here
30:03
so that's what we do from a higher time frame to a lower time frame we refine
our entries and our levels with this in mind price makes a run through even

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after taking this level out here you can take partial profits out here okay take a
little bit more profits out at an old weekly high here remember we're looking for
weekly high stake profit set and then leave a little bit on and when price
comes back down we can now add back on the positions we took off here and
here add them here as new longs and as price rallies through to external
30:43
range liquidity which is this high here entering it internal range liquidity at this
bullish order block here the range again about 310 pips just to get first profit
here okay and then you're going to look for an expansion to continue to take
out this high here and this high here for what external range liquidity what's
going to be above these highs buy stops so you're going to be looking to sell
to those participants that would have an interest of buying about above these
highs refining it further into a daily time
31:30
frame you can see all these levels get much more refined you can see the
reactions about these levels again and now because these are weekly levels
we can see the reaction at them on a daily basis the levels are treated back
down into here publish order block the weekly level that we transpose over
here onto a daily we can see that this down candle two down candles in a row
on any time frame you have to blend them together to get one full order block
in this case it's two down candles as one full bullish order block
32:11
so we can refine that here use the wicks and the bodies to look for that as well
but we're going to focus primarily on the open on the candle you see it hits it
here this is all during the election which i personally was on the sidelines it did
not do any trading and then recently we had this down candle we talked about
prior to this week's trading the week ending december 16 2016 in a pre-
market analysis i told you to focus on this down candle prior to this big move
up i said that we would look for the mean threshold of this down
32:49
candle why because i didn't think we're going to get down to this down candle
what necessary because i viewed this as a run on stops which we'll talk about
in the next teaching but we traded right back down into the middle point of this
down candle or mean threshold and then we expected to see what happened
external range liquidity above this high and then continue higher reaching into
the higher time frame levels we're looking for 103 103 50 and then 104 is next
ultimately 105 107 still in the cards
33:22
for dollar index long term so you can see how dynamic working from the
monthly levels to the weekly levels refining them waiting for confirmation that
there is a displacement by smart money and then simply waiting for those
levels to be retraded down into and you can refine these as as small as you
want by going into as low as a five minute chart if you want the ultra really
really low risk entry and small stops but you're looking for the direction from
the monthly the weekly and the daily to get you a directional bias and
33:55
only focusing on those higher time frame directions those order blocks are the
ones that you buy those order blocks also will keep you from taking focus on
the bearish order blocks because while bearish order blocks or the last up
candle rate for the down moves that you see in price those are good

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objectives to take profits at okay if you hit a bearish order block during a time
of day when profit taking should take place guess what you may not get that
run above an old high you may end up having to take profits at
34:27
that very shorter block and then wait for asia and frankfurt and then london to
retrace a little bit and then drive through and then you'll see that run on a new
higher high for capturing external range liquidity so there's a lot of factors that
you have to keep in mind but this teaching was to focus your attention more
on only getting on the long bullish order blocks when the monthly and the
weekly in the daily show you clear indications of the markets being
accumulated and only using bearish order blocks okay
35:02
to take profits one time of day is an impact but if time of day is not in uh in
effect you don't even consider the bearish order block you might expect them
to pause and consolidate there but you're looking for them to drive price
through an old high to absorb external range liquidity because they're going to
look to take profits at a higher price not just at an old high or inside of an old
high they're going to try to build a premium in and expand that range because
it's going to draw in
35:30
more participation more excitement in the form of the funds and that's what
this business is all about drawing allocations from large institutional traders
that trade managed funds and larger position holders

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Mitigation Blocks

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order block Theory we're specifically dealing with the mitigation block okay
when we look at mitigation blocks what we're looking for is a condition in the
marketplace where the market has given clear indications that it wants to
break down or move higher in a step ladder formation in other words like
selling rallies or buying declines Vine declines in bullish markets and selling
rallies in a bear Market okay when we look at the marketplace and we frame
01:06
price action in the form of resistance levels and support levels or anticipated
bearish institutional reference points and anticipated bullish institutional
reference points we have to have a context in the marketplace behind our
viewpoints are we looking at the market that has a bullish scenario are we
looking for a market that has embarrass scenario in this example we're going
to look at a market that has a bearish example when we're looking at a market
that is moving up into a potential bearish resistance level
01:38
Market typically will move up and they move into a old high it could be an old
low it could be a bare shorter block it could be a breaker that we'll learn more
about it could be a multitude of things that would lead your opinion into the
realm of resistance okay but without going into great detail what that may be
there's multiple opportunities to frame that idea of being resistance if a
resistance level is expected or you anticipate some selling pressure at a
particular level as is indicated here what we do is we wait for price to
02:20
indicate a confirmation that there are willing sellers up there if the market does
show repricing then it realize one more time up to it what we're going to be
doing is monitoring does the market have a willingness to want to break down
and eventually the market will show signs that it does in fact want to break
lower now if you look at this specific pattern here this is what is referred to as
an M pattern y because it looks like a giant M okay well when you have this
pattern here it's a failure swing with a
02:54
confirmation break in Market structure that low right here is what you're going
to be utilizing to frame the context of the market structure shift so a net shift in
Market structure is seen here with a break below that old low that gives us
confirmation that the market does in fact have participants on a large scale
willing to drive prices lower and that's what we need as small Traders we have

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to have the willingness to have the smart money indicate their cards if you will
show in other words show their hand do they want to send
03:28
prices lower or do you want to send prices higher in this case this is indicating
that the market does in fact have confirmation that it wants to go lower so
what we do is we look at this range from that short-term low up to that short-
term High inside that range there has been buyers but the problem is is now
those buyers are underwater this short-term rally in Price highlights a specific
institutional reference point known as the mitigation block once price posts a
market structure shift lower your attention as the trader
04:13
moves to this specific low in price right there inside that low what we're going
to be focusing on is the last downed candle because the last down Kindles
where the buying took place right before that little short-term rally up since
price broke below that low at a subsequent later time which is really no um
there's no rule as to how long it takes before that low is violated we just note it
and when it's broken it's seen as a short-term support level that's given way
with a bearish context
04:49
behind it so when we see that we're seeing the evidence is that there are
smart money entities behind the marketplace driving price lower now at first
glance it looks like well this is a missed opportunity but no what we do is we
focus on this low because that last downed candle will give us a bearish level
to sell into when price drives back up into that old short term low we just
referenced there's going to be three reference points that you need to be
aware of the market structure shift is seen here
05:24
we're retracing back into it right there what three points are used at this
moment you have point a point B and point C when price action returns to the
point of a reference the long positions taken from A to B price swing will have
an opportunity to liquidate or mitigate their losses that were occurred during
the price move from B to C now this can result in new lower price swings to C
for retesting or a significantly lower price move into a support level that's
under the market price in short this is an opportunity to sell whatever
06:17
particular Market or asset class this is as the market breaks lower let's say
you look at the chart this is what you see here it does not mean that you've
missed an opportunity it just means that now you have a new opportunity
that's unfolding do the Longs in here in that short term low that has short-term
high do they need to be mitigated we don't know for certain but if you do have
a belief that price is going to be moving lower longer term that there's an
unrealized lower support level for sell
06:54
side liquidity that has not been tapped into yet we could be viewing this short-
term rally in here as an opportunity for a new selling opportunity we have
another Market structure shift so where's our Focus given what was explained
in the previous example where's our Focus right now as a Trader why are we
looking at a specific level and what are we anticipating that low right there
inside that low the last down candle that's what we're going to be looking for
price to reach back up into if it does that we can be a seller at that

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07:42
moment as price dries back above it into that low we're watching price trade
into that last down candle right before I had that short-term rally before rated
that moment here we're looking to go short as price hits that last down candle
in the previous short term low where's your focus at this moment we're
anticipating price to move down from this point here which is giving us a short
opportunity to run the liquidity Out Below this short term low here and
potentially as low as our higher time frame support level
08:27
as price hits our longer term support level or anticipated bullish institutional
reference point which could be an old high it could be an old low it could be a
bullish order block many many opportunities to frame that idea but whatever
that is that forms your idea for support this is the objective that you could be
reaching for as price hits that level we would be collapsing our trade and
moving to the sidelines waiting for new developments when we had this in the
marketplace what we're seeing is the classic support broken turns
09:04
resistance every time price moves back to an old low it's actually happening is
it's referred to as buyer's remorse the buyers at the previous short-term low
that saw a short-term pop in their favor then eventually saw the American
break below that low they bought that when price gets back to that level
they're remorseful for buying it so they bail but on an Institutional level the
smart money understands these short-term fluctuations and they can drive
price on a short-term basis higher or lower
09:35
through manipulation so if they're going to manipulate price on the short term
by having large orders come in and push and Bully market pricing around
they're going to want to liquidate their Physicians because just like anyone
else they don't want to incur losses so this gives them the opportunity to
mitigate those losses premium price Highs are bought by less informed
Traders and sold by smart money which are you going to be grouped in
.

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a quick example and I draw your attention to a liquidity

10:13
avoid in here and there's equilibrium of that liquidity void body's a body end or
where's the open and close and we're going to highlight that reference point
here except halfway point of this equilibrium the idea is we broke this high
back here we're expecting continuation on the upside Market trades higher
but it shows a breakdown in here okay in here this failure swing right there
we're gonna be looking at this low and I'm just going to drop horizontal lines in
on the respective lows
11:11
[Music] and this will be a new mitigation block when we drop down into the
lower time frames in order to sell off there it sells off breaks this low here to
the last down candle on this move here is there so once price trades back up
that's a sell right in here and choose it just overshoots it by a little bit but
nonetheless it breaks lower right here so now our attention is on this low
every rally that sees lower prices needs to be mitigated right here so if we
trade back up to that low that's a cell right there's a
12:05
cell we're gonna be aiming for a move back below this low ultimately down
into our equilibrium of our liquidity void right here well it comes in at 1 11 48
11 48. here's a short-term low hits it trades lower trades back up into the last
down candle hits it overshoots a little bit but it's inside the body of the candle
which is with a mitigation block represents price trades down below the last
down candle here and we have another lower low here so we can adjust that
one to that low there right there price hits that objective is going to be
12:58
break below this low sells off goes through it and ultimately goes down into
our mean threshold of the liquidity void so a couple different things shown in
here as an overlap study on mitigation let's take a look at a 30 minute chart on
the same price action here's the mean threshold liquidity void last down
candle great for the up move price hits it sell it right there this is a mitigation
block everything that was used to drive price higher once it's traded below
here it's underwater they're going to want to mitigate those
13:42
losses at that candle sell short this last down candle here is violated here it
probably trades back up to it here we can be a seller the bodies the whole
entire candle is used not just the bottom but we can be a seller down here so
it could be a short seller at 112.62 and our stop has to be somewhere above
the down candle in here okay so that high on this candle comes in at 112.
14:12
89 so it needs to be above that in the form of a stop so we could be seeing
just a little bit of draw down in here about 20 Pips or so but never getting
much above this down candle probably trades lower violates a very
convincing break down here last down candle the low trades up now again
notice the body of the candle is not violated this is Hallmark characteristics of
a of a mitigation block price trades up into it we're expecting prices below this
low now and ultimately reaches down into our mean threshold of the liquidity
void

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ICT Breaker Block

how we can use this form of mitigation to highlight a trade setup we're going to assume that
we're watching price and it trades lower and creates a short-term low eventually when that
short term low is violated and trades down into a support level we view that initial drop down
below the previous low as a potential false break or turtle soup long below short-term lows
there's going to be sell stops and our expectation is we want to see if the market wants to get
back above that short-term low initially it may come up and flirt with that same old low and
give an indication it may want to view that as a resistance price point we're more inclined to
wait to see if it wants to show a real significant price move higher eventually when we see that
here this is going to be in the form of a market structure shift it takes out the high or the short-
term high that high is what we focus on wait for price to come back down into that old high
when it trades there we view that as real support because there's going to be orders inside
that high that will be looking to be mitigated in other words those individuals that were short at
that high they're going to want to take those positions off and maybe get in sync with a new
leg higher in price as price moves away that confirms the breaker and then we wait for higher
objectives to be met in price action again focusing on the high in between the two lower lows
one low has to be traded below and it's going to run out to sell stops we focus our attention on
the short term high that's in between the two lows we use that as a resistance level that's
broken that will become support making it a bullish breaker contrarily we can look at the
market in this way when the market trades higher and takes out an old high and then breaks
below the low that makes that new high our focus is there and we view that as a bearish
breaker.

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bearish breaker okay a bearish breaker is a bearish range or down close

candle in the most recent swing low prior to an old high being violated the
buyers that buy this low and later see this same swing low violated will look to
mitigate the loss when price returns back to the swing low this is a bearish
trade setup worth considering so we have an old high here that's traded
through and rejected it runs the stops above the old high those buy stops are
now neutralized and we focus our attention on the swing low that formed
between the two highs we see a market structure break retrains back to the
swing low that is the bearish breaker we look for another low to form with a
new leg in price moving lower the salient points are what we're looking for is
an old high to be ran out or a false break above an old high this rate on buy
stops indicate buyers are trapped long we know this is true when the market
quickly does a repricing that's seen here repricing lower after buy stops are
taken that is a confirmation that we are potentially seeing a new breaker
forming the low gets violated here once market structure is broken down and
all future retracements will be viewed as new selling opportunities especially
once it trades back up to the low here that gives us our bearish breaker.

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bullish breaker it's a bullish range or up close candle in the most recent swing
high prior to an old low being violated the sellers that sold this low and later
see this same swing high violated will look to mitigate the loss when price
returns back to the swing high this is a bullish trade setup worth considering
again we have an old low that's violated taking out cell stops below that old
low our swing high is where we're going to be looking for our bullish breaker
we have to wait for price to break through that swing high to confirm that there
has been a run on stops and that that old swing high will house or inside that
swing high will reside a bullish breaker as price trades back down to that
swing high we would be buying that but the expectation that there is going to
be a mitigation that's taking place those sell orders that they use to drive
prices down below the old low they would be underwater here or not making a
profit so they're going to want to take those off and add more longs that's our
bullish breaker and then we would expect to see and anticipate a range
expansion to the upside to tell tell signs that you have a breaker in formation
or confirmation the rate on sell stops indicates sellers are trapped below the
old low [Music] the range expansion that takes out the short term high in
between the two lows this repricing higher after cell stops are taken as a
confirmation that the market is in fact a run on stops below an old low and the
old high that's violated that supports a market structure shift for bullishness
this run here supports the market structure being broken higher and any
retracements from this point on will be viewed as a new buying opportunity
when it trades back into the old swing high here when we see that that's a
bullish breaker

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let's take a look at it in real price action okay we have an old low here the
market trades down below that low and punches through it again and it rallies
up so what we're seeing here is that market structures shift after stops have
been taken on the sell side so there's been a massive repricing so the
market's going to want to look to reprice lower and retrace back down into
what where's our focus point we find the short term high and the last up
candle in between the two lows that most recently formed and taking out
those cell stops that's seen here so right now this would be viewed as a
bullish breaker we would anticipate saying the market to trade higher where
those orders would be collapsed once retraded back down to with price any
selling orders would be mitigated and new buying orders would be replacing
them and there's the subsequent price actions you would anticipate seeing in
your charts so study your charts look at examples where you see this
formation where you have the market creating a low and then the market
trades down lower one more time and runs through the short term high in
between this is where classic support ideas are effective that you've probably
done what i've done as a new trader where we look for support resistance
ideas by drawing a horizontal line and you think that you know it's that easy
well you have to have a storyline behind why price is doing what it's doing if
you understand what the breaker is doing it's indicating that it's running a stop
pull of liquidity out when you find the short-term load that's been violated find
the short-term height that this recently formed when it trades back down to
that that will be in fact a support level that is highly probable for bullish prices
you see that here it's trading inside the range that's created with this last up
candle why am i using this one and not this one here because this one was
the highest one prior to the drop down and we're using the entire range price
trades down into it recapitalizes all the selling they sold here that drove prices
down to take these sell stops out they're underwater or losing money here
they have deeper pockets than us they'll wait for price to get back to an area
where they can mitigate those shorts and add new longs and that's why you
see that explosive price action seen here so hopefully this has been more
insight to breakers and we'll talk more about these as we go through the
mentorship in futures months.

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ICT Rejection Block

rejection blocks okay let me ask you a question real quick what do you see in
this chart at major highs and lows now take a moment pause the video here
okay you may have noticed these old highs being violated and a significant
movement away from that and we understand this as a turtle soup or a false
breakout it's important to understand that it's probably easy for you to see
these in hindsight when i pick them out on the chart but you probably
01:26
don't always you probably don't have that much experience seeing them
come to fruition beforehand so in other words you don't see them forming in
advance and it's because you haven't spent enough time going through the
charts seeing how they form over and over and over again now obviously you
may not have noticed these and i'm pointing them out to you here but for
some of you that have been working with my content maybe you've seen
other ones but these two here are the two majors okay so you have two major
false breaks
02:04

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above and on high a nice false swing above a previous high and then a
rejection and a subsequent significant price swing lower and we have false
break below an old low and we have a nice significant price rally higher let's
take a closer look now we have a old low here that's been violated so the cell
stops below that low has been ran out so we would expect repricing on the
upside looking for buy side liquidity the market trades above an old short-term
high here pairing up the buys from the previous low with buy stops they can
sell to with a
02:44
movement above a previous high each one of these is a turtle soup the first
being a turtle soup long the second being a turtle soup a cell down here we
have an old load that's violated where cell stops have been ran out we have
an ola over here where cell stops have been ran out we have an old high here
where pi stops have been ran out so you can see significant price swings at
looking at the daily chart like this and it gives you a great deal of
prognostication when you anticipate every time a new high or low is formed
03:30
we expect some measure of rejection that's the first anticipatory price skill set
you should be working towards developing because it's the hardest one to
groom in your trade psychology some of you probably understand that higher
high failure swing and lower low various swing or turtle suit long and total
sleep by some of you probably aren't aware that there are other distribution
and accumulation patterns that take place at highs and lows.

a bearish run on buy side liquidity or a turtle soup cell now obviously when
you look at this price action here it should be pretty obvious after studying my
material we have equal highs that's been ran out so there's buy stops above
those equal highs in there have been ran out here we would reasonably
expect to see what form a sweep through and a potential rejection and trade
lower and that's what you would see here as an example now some of you
probably can see this relatively easy in the chart formations and how
previous high or previous low has been violated in a subsequent rejection and
a retracement of a longer magnitude.

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pattern here okay we're going to talk about a bearish rejection block and
before we get into it the ideal setups are found in major to intermediate term
downtrends and the bearish rejection block is when a price high has formed
with long wicks on the high or highs it can be more than one candle that forms
a high of the candle stick or sticks and price reaches up above the body of the
candle or candles to run the buy side liquidity out before the price declines as
you can see there are several wicks here forming potential resistance now a
classic chartist would look at this as a potential continuation pattern in the
form of a bull flag we talked earlier in this mentorship the falsehoods that
come along with some of the classical chart patterns price does not move
around because of animal patterns or supposed geometry in in price action it's
based on the orders okay and looking at this price action here if this is near a
overall longer term resistance level or trading into a bearish order block or an
old load that may not be seen in this sample size of data but you can see
prices ran up higher for a good number of candles then it starts moving into a
small consolidation but more importantly i want you to look real close is there
a strong likelihood that this is going to go higher based on a continuation

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pattern of like a bull flag or a pennant or is it showing underlying distribution

notice there's no higher high here or is there take notice of the highest body in
this formation and the most recent candle that traded through it price pushes
above the previous highest candles body seen right here that run above the
highest body's candle produces the distribution seen in the chart here price
does not need to make a higher high to have a failure swing by looking at the
bodies of the candle which is one of the first things i taught when i started
teaching online how the foreign exchange market operates you don't need to
have a great deal understanding about candlesticks except for understanding
where the open high loan closes and if you follow every swing high and low
and you chart the open high low and close and you deal specifically with the
opens and closes you'll be able to fare it out what distribution and
accumulation takes place at these turning points as you can see the real
pattern here is from this previous highest bodied candle then the subsequent
later higher drive higher this candle here prior to this candle moving up this
candle was the highest body candle we're not paying so much attention to the
wick the wicks highlight the idea of this pattern forming this pattern here
shooting above this previous body or previous close is the highest close or
highest open in this swing high this candle here drives above it clearing out
the buy side liquidity and then rejection basically what we're seeing is
distribution.

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a crew depiction here with a single wicked candle now this is going to be
better understood when there is multiple candles that form the high and
multiple wicks you're still looking at the highest close or high you're still
looking for the highest open or close inside the swing high that forms the
wicks are just drawing your attention to a potential rejection block when you
see the wick you have to build the parameters for the rejection block by
finding the highest high and the highest open or close in the swing
09:45
high it does not matter if the highest candle is a bearish or bullish closed
candle you're still looking for the highest high with the highest open or closing
price into the highest wick that frames the rejection block so once we have the
rejection block defined by the highest wicks high and the highest open or
close in the swing high that frames the rejection block and in your mind you
should be viewing it like we have here a candle all and of itself this range is
going to be a selling block in other words we treat this as a bearish order
block
10:39
when price trades back up to the low of that range that is your trigger now you
can do one of two things one if you're aggressive you can sell at that price
and put a significant stop loss above that particular price level or you can wait
for the trade through it a little bit and i'll leave that up to you in terms of all the
additional insights that we'll be sharing over the mentorship about entry
patterns or you can wait for it to trade above that level and if it moves
significant amount above that highest open or close in this case is
11:17
the highest close or that bullish green candle if it trades above that particular
level and it does not trade to a higher wick high you could be a seller on a
stop below that level so that way you can be selling on weakness this is one
of the few times i use selling on a stop as an entry pattern what it looks like in
the charts here's one example here we have a candle with a wick we use the
highest body reference point being open or closed in this case it's going to be
the open and price trades above it just a little
12:02
bit violates that doesn't make a new hire high and it makes it run eventually for
the sell side liquidity below the marketplace there.

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so rejection block for the bullish side of the marketplace is obviously in ideal
scenarios it's in major intermediate term uptrends and a bullish rejection block
is when a price low has formed with a long wick or wicks it could be formed
over multiple candles and the low or lows of the candle stick or candle sticks
again it's not limited to just one candle and price reaches down below the
body of
12:40
the candle to run the sell side liquidity out before price rallies higher again we
frame the rejection order block in this case the bullish rejection order block it's
going to be the lowest wick low and the lowest open or the lowest close that
makes that swing low on the time frame you're looking for the pattern once
you identify that you have framed the bullish rejection block and we treat this
as like a bullish order block when price trades back down into the high of the
block we can be a buyer just below it
13:24
or we can wait for price to trade through if it's a little bit longer term time frame
uh we wait for it to trade through it by a little bit and then we can be a buyer i
want to stop just above that particular level here again the trigger is that high
or the lowest open or the lowest close in that swing low but the key is it has to
be a swing low that has a wick or wicks in price action this is what it looks like

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price makes a previous low with wicks mark comes down trades down just
below the bodies of the candle
14:00
and then we see a strong rejection because of a massive accumulation that
comes in it's not always required to see a higher high for a failure swing which
would be a turtle soup cell or requiring always a lower low for a rejection for a
turtle sheep long we can anticipate levels like this to be taking profits at if
we're short in this case if the market had been trading in our favor on another
type of setup we could look at the take profit objectives to be covering the
short just below the lowest open or close in the previous
14:35
swing low don't always demand that price gets below the wicks it's really the
bodies of the candle that the closest thing to institutional understanding you're
going to get when you're using retail price delivery mechanisms like the
platforms we have to trade through from retail perspective hopefully this has
been insightful we're going to have a lot more information as we go along and
we start talking about specific entry techniques we'll be revisiting all these
things as well and amplifying them
15:05
but i want you to go through your charts and look for examples of rejection
blocks in their subsequent price moves after their formation.

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Reclaimed ICT Orderblock

reinforcing order block theory and reclaimed blocks okay we'll be looking at
the market maker buy model first and what this essentially is is when the
market drops down and has a price swing lower reaching into a higher time
frame or immediate term support level and that support level can come in the
way of an old high it can come in a way of old low it could be a bullet shoulder
01:09
block it could it could be a filled void or closing in on a fair value gap any one
of those things could lend well to a price support level but the idea is we're
going to be anticipating that market move lower and you can anticipate it and
watch it go lower and be short or if you look at it and the move has already
transpired if you notice you have seen the decline down to support level we
can start looking at specific levels to watch for reclaimed order blocks first we
have to understand the cell side of the curve on a market maker by
01:47
model that's the drop down into that support level before we see the move
higher the market makers are going to be scaling in early so they're going to
have areas at which they start buying early because their positions are much
larger than us as a retail trader they require a great deal of movement and
time to price in their orders because they can't facilitate their entire order on
one transaction one specific move from a level they have to scale that position
in and that's in the form of hedging
02:21
as the price drops down into the lower level support they're going to be
building in more positions and you'll see as you watch price go lower and
lower they'll be small little transactions that cause the market to create short
term little lows in the market so as the market moves lower every time we see
a small little bounce in price action that is a minor displacement showing that

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there was new accumulation being taken into the marketplace in other words
the smart money is actually accumulating new long positions
02:57
you have to have the understanding that that lower level support that it's
reaching for is going to be the ultimate price level it's most likely going to have
its impulse price swing away from prior to that low being formed like i said
there's going to be initial short term rallies that take place many times traders
that are looking at those as entry points they end up getting stopped out
because what you're doing is they're piggybacking on an entry that is based
on a hedging motive on the market
03:30
maker so as the lows keep creating lower lows but every time the price makes
a smaller short term move higher we're going to be referencing that last down
candle because that's a bullish order block but it's occurring we're watching
the bullish order blocks or the down candles right before a small little price
moving higher during the sell side of the curve now this this market maker buy
model the curve is basically a price swing lower that trades higher that's all
market maker buy profile is
03:59
or market maker buy model it's just understanding that the market is going
lower to go higher eventually we'll see the price move higher off of a major
support level and we'll start seeing the buy side of the curve come underway
the market will start pricing new higher highs and as it does we're going to be
focusing on those old down candles during the cell side of the curve every
time there was a bullish order block that was created on the major price swing
going lower and it saw a little bit of a minor movement
04:33
higher that has indicated that there was hedging going on and that down
candle is what we're going to be looking to reclaim or watch price recapitalize
that old order block now that we're on the buy side of the curve every new
buying opportunity is going to be matched up to the previous down candle
while the price was dropping earlier on the cell side of the curve and ultimately
everything will match up with the down candles on both sides of the market
maker by model so what is a bullish reclaimed block is
05:07
a candle or bar that was previously used to buy price and a short term bounce
confirms minor displacement in the buy side of the curve these old blocks or
down candles will be reclaimed for new longs.

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let's take a look at what it looks like in price action okay we see the market
dropping down from november 24th into november 29th okay so we have a
market maker buy model where the market's going down to go higher see
here this down candle on the buy side of the curve right here this down candle
right before this
05:45
movement up here this displacement shows that this was an actual hedging
where they were buying early and the market drops lower okay once it makes
its low here you can see the price did in fact come back down to this same
down candle right to it here and was reclaimed or they recapitalized this old
order block here and price started to move higher the next level is here this
movement down prior to this displacement here all of this movement here this
down candle is a bullish order block on the right side of this low now we're on
the
06:19
buy side of the curve and that's what this movement is here hits it right to the
pip and then price moves higher so they are two examples of reclaimed
bullish order blocks.

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market maker sell model this is just the same thing just in reverse where
we're anticipating the market to trade higher to go lower you may not see it
happen before the fact you may notice that the market's making a high and
you expect to see a sell-off so we can use this information just by focusing on
the buy side of the curve every up candle that sees a displacement or a short-
term decline confirms that there are hedging underway that means that they're
selling short early and market makers are selling into these rallies when we
get to the sell side of the curve every single time we see the market trade
back up into a up candle or bullish candle right before the down move during
the buy side of the curve that bearish order block is going to be reclaimed and
you can take that as a new short and again matching up during the buy side
of the curve while price is being built up into a premium the market makers
are actually going to hedge into that rally selling short they have deeper
pockets than us they can do this for a longer period of time and as they do
this their pricing in more short positions we can match that up and see it like
x-ray vision into price action by looking at every single up candle that has a
small displacement or short-term decline that's confirming that there was
hedging on the wave again we understand that market makers and smart
money they're the only ones that can move price around so if there is a
displacement in price and we see bearishness after an up candle we can
assume that this is going to be evidence that they have been hedging and
selling short early when we get to the high and we climax there and start
trading softer and going lower every time we retrade back up into that old
previous up candle during the buy side but we're to the right of the high that's
already formed we can now take new shorts at these old bearish order blocks
everything matching on the buy side of the curve to the cell side of the curve
so again in summary a bearish reclaimed order block is a candle or bar that is
was previously used to sell price and a short-term decline confirms minor
displacement in the cell side of the curve these old blocks will be reclaimed
shorts or new entries for short positions.

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take a look at this chart we'll take a look at the example of a market maker cell
profile and using the reclaimed order block
09:08
we're gonna be looking at the cell side of the curve or to the right of the high
and we're gonna be focusing on every up candle that showed a willingness to
see price drop during the buy side of the curve or to the left of the high that
formed you see here the last beefy candle right before this drop down price
trades up into it here and sells off the nest next example is this up candle here
which would be a bearish order block would be reasonably seen as in the free
tutorials you would think that this was
09:43
probably a bearish indication to start looking for lower prices it doesn't do that
here it trades through it but we see a climax high so now we see price doing
what it trades up into this up candle this is a new short another example here
this last stop candle here price trades up into it here very handsomely sees
that as a displacement lower here so you started hedging here this is a selling
short opportunity to see the completion of the market maker cell profile so
again in summary we use the market maker buy and sell
10:21
models to be able to match up old order blocks during the buy side and the
cell side of the curve and we wait for that reclaimed mechanism that takes
place where the market makers will use these same reference points and
facilitate new positions we'll build more on this idea as we go through the
coming months of material and you'll see examples of it before the fact and i'll
be able to map it out for you but for now study these examples and also go
through your charts and find where you can see during price rallies
10:54
like this and declines map out all of the up candles and during the decline side
of the marketplace you'll see that there's wonderful opportunities to get short
that you would otherwise not notice.

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ICT Propulsion Block

discussion on reinforcing order block theory this teaching we're going to talk
about propulsion blocks and a propulsion block is a candle or bar that is
previously traded down into a down candle or bullish order block and takes
over the role of price support for higher price movement in this example here
okay in this crew diagram we have a down candle which shows price
willingness to move higher and then we have a new down close candle trades
right back into
00:56
it seen here that candle becomes a propulsion candle what makes it
propulsion is that it's already dropped back down into a owner block that's
already predisposed to go higher then we created another higher order block
that touches the initial one that new higher level bullish order block or down
closed candle will be highly sensitive [Music] it should never see the mean
threshold break half of the body's height or the middle of the range of that
candle's body that's that mean threshold should not give way
01:36
the sensitivity is going to be very much more amplified when it trades back
down into the high but we are willing to allow to still trade down the middle of
the range or mean threshold but it very most most likely it will never do that it
just trades down into the high of the candle and immediately explodes it may
go pip or two below the high of that particular down candle which we're
naming as a propulsion block the market will show a sudden and violent
movement away from that down candle that's a propulsion candle

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what it looks like okay let's take a look at a bullish propulsion candle okay you
can see price has moved from a low here and we're on the buy side of the
curve and the market has several down candles in here so we would take this
as one full bearish candle because consecutively three down candles so the
bullish order block is framed like this so we have equilibrium down here price
trades all the way down to this level here but falls short of
03:04
equilibrium so we have a level at which price could reasonably trade down
into but it doesn't do it here so price trades lower here and rallies through its
own three consecutive down candles so this is the order block as well
together all three candles and then we have this candle right here you can
see this down candle it's trading into these down candles together so this is all
one bullish order block because it's all down price movement reaching for a
level to buy and then price moves through this candle
03:42
here trades through the highest of the down candles so that confirms this is a
bullish order block the very next candle trades higher and the next candle
opens and trades down into this candle here when this candle creates the
down close and closes this becomes a propulsion candle what makes it a
propulsion candle is that we are trading another down candle into a previous
down candle when the underlying context is bullish the powerful nature to a
propulsion candle is you don't ever really see a mean threshold violation on it
so you get an
04:19
opportunity to see it trade back down into as it does here this candle opens
trades down into it right there the open comes in at 130 345. the low on this
candle comes in at 133.45 goes right to that candle so that's a bullish entry
here with a propulsion candle and again all it is it's a down closed candle that
trades down into a previous down closed candle or in this case uh this is a 15
minute time frame i don't have a way of showing you a 45 minute chart here
but uh it's the same price action that
04:53
you'll be seeing here the down candle trades into this water block that would
be bullish and then we see price trade higher and then come right back down
into this candle here this is the propulsion candle that means we should see
immediate responsiveness on bullish price movement higher off this down
candle should it trade back down into it again here's the clue if we break the

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mean threshold of that type of candle where it's already traded down into a
previous order block it's bullish if this loses its mean
05:23
threshold chances are it's probably not a good trade so that means you can
have a really ultra tight stop loss on your long entry or you can have
immediate feedback that you're on the wrong side of the marketplace and you
probably are better off either going to the sidelines or many times looking for a
reversal to go short okay we're going to look at an example of a bearish
propulsion candle okay we're going to frame it around a higher bearish order
block it's this candle right here price trades up into it here
05:57
breaks down so now we're going to add another level of order block theory we
have this last up candle that's the bearish order block here referencing this
one as well so now watch what happens we have price movement lower then
we trade right back to this order block right here this candle becomes the
propulsion candle right there this one so now we can cut that candle in half
right here boom hits it right there mean threshold trades immediately lower
this is a cell entry on the propulsion candle that's
06:33
bearish we could be a seller there and we can also use a entry at a later time
where it trades right back into this candles low where it trades right here hits it
responsiveness immediately moves lower so look at the responsiveness after
it trades into this candle you have to see it break below this candle's low
which it does here okay it's already showing a willingness to not want to go
above that mean threshold here but it breaks down then trades right back up
into this candle's low it doesn't need to go
07:10
up to the body it's below the candle on the propulsion candle it's going to be
very very sensitive hits it immediate quick responsiveness as you would
expect that's why then i gave you the name it's a propulsion camera because
it propels price quickly and suddenly and it gives you immediate feedback
very little draw down immediate price responsiveness that's exactly what
we're looking for short-term traders .

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ICT Vacuum Block

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reinforcing order block theory we're gonna we're dealing specifically with the
vacuum block okay a bullish vacuum block is a gap that's created in price
action as a result of a volatility event the gap forms by a vacuum of liquidity
directly related to an event non-farm payroll can create a vacuum block or in
futures a session open can okay on the left hand side here we have a crude
depiction of price action uh short-term lows formed and this could be
01:21
if we're trading futures contracts where they have a session opens and closes
where there's no trading or if we see a stock it could be a inch day indicy it
could be like s p 500 or it could be just any old forex pair and there may be a
large volatility injection coming in the form of a economic calendar release it
could be not far payroll it could be a fomc related event anything along the
lines of interest rates or it could be a geopolitical event that was not uh
foreseen maybe not even on the economic calendar say a terrorist attack
02:04
um something like that something of that nature at any rate we're going to
assume that we see the market gap up okay when we see that gap the the
the first assumption is on the part of most traders is this thing's going to keep
going higher right away and sometimes it will in but we're going to be looking
at the vacuum block in the scope that we can use it to get in sync with what
may be underlying in the marketplace the short-term load that's formed here
in our diagram if we have traded lower prior to that
02:43
swing low in this case this outline that i'm giving you here would be a little bit
more probable if the market had been rallying for a number of days or weeks
or it's been in a prolonged uptrend and then it does this this could potentially
be an exhaustion gap an exhaustion gap is typically a graphic depiction of
capitulation and capitulations basically like the last bit of momentum in in
underlying trend or direction but assuming that we have been in a down word
correction in an upward market or if we've been in a down uh market and
03:27

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we expect the market to give some kind of a bullish news or we're expecting
the market to reach for liquidity above where we're currently trading at and the
news event releases and we get this gap up uh what we're essentially saying
is if we gap up away from a market that's in a discount we've had some
retracement but we are expecting higher prices nonetheless we see this gap
like this the first thing i want you to start thinking about is when we see that
that space in between the two candles is
03:57
important now while on our charts there's going to be a vacuum if you will of
trading there's no trades being made between the previous candles close and
the next candles opening so that gap it could be large and sometimes for
instance not farm payroll it can gap sometimes 30 50 60 pips you know from
where it was trading right before the numbers released now a sudden they do
a quick repricing at the central bank level because that happens there's
absolutely no way for any trader to execute there's no trade between those
two price
04:34
points so what it does it creates a vacuum of liquidity most times i'm not going
to give you a specific percentage because there's no real accurate way of
depicting that because it's just we're going to classify as a high probability that
the market will want to come back and try to close that in there's some points
that i want you to take a special notice of as we go through this but for the
most part is we're going to anticipate that mood to fill in but first we have to
identify that gap
05:06
in a specific manner because they're looking at the gap we come to the
realization again that there's no trades being made in this range so if there's
no trades in that range what's the market actually done it's gapped up through
it and started trading at a higher price on a new candle when it opened up and
it traded a little bit more and now we have to discern whether or not the
market is going to continue and run away from that price level and leave the
gap opening or will it trade back down and close in
05:36
that range and if it doesn't close in the range how much can we reasonably
expect for that ratings to close in and still look for a potential buy setup inside
that range we have a vacuum block and that means we've blocked out a
reference point in time and we have to look at it like this because even though
there's no candlestick or bar on our chart price did in fact have a parameter
before and end we can look at it as this handle or range okay and again we're
we're interpreting it we're visualizing it if
06:18
you will there's a there's an absence of liquidity there there's an absence of
price being traded there but we're defining it as the high and the low of the
gap now if we looked at in the terms of a candle or a bar it would be just the
same as anything else we would expect to see a mean threshold an opening
and a close so if we see that okay we're just going to treat it just like any other

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candle so let's take a look at it now with the gap in mind and let's assume for
a moment we start seeing price trading lower
07:00
our expectations are one of two scenarios if we're bullish we're looking for is
there any bullish order block or down candle that would cause the gap to not
want to fill entirely as price trades down we see that actually occurring here
we have the down candle right before the uh move and it's two consecutive
down candles so the the bullish order block would begin at the higher of the
two down candles prior to the gap up and as price trades into that candle we
would reasonably expect a potential bounce there and leave
07:39
that little gap opening still intact but this could potentially be a buy now if
you're looking for this to occur you'd have to see immediate feedback if you're
going to be buying there can you take the risk that's associated with entering
here and using a stop below that lowest down candle so your range in terms
of managing your risk and defining the risk would be between those two
reference points if price was trading lower and we get down to that order block
area and we don't want to buy there say we
08:16
have a little bit stronger conviction that we'll probably trade back down into the
last up candle before the gap the reasons i would expect to see that is if it was
time of day sensitive in other words if we had a lot of today left in the uh the
day where we can trade in other words if it's just now beginning of new york
uh new york would probably come down and close that gap in if it was gapped
up late in the afternoon chances are it probably would leave the gap open but
if price trades down into this point
08:51
here and time of day permits more trading in other words if it's still an early
new york session or maybe even a london session that it creates that gap uh
highly unlikely that it does it in london usually it's a trading event that takes
place but a gap like this usually occurs in the new york session or late new
york with fomc but generally at 8 30 news embargo lifts there is usually
markets that cause a gap like this to occur so we're going to assume that it's
still early in new york 8 30 would be
09:23
relatively decent in terms of allowing more time for the day to unfold we could
forget the bullish order block level here and anticipate this small little area still
to form but if we are later in for instance say it's the 10 o'clock or 11 o'clock
hour and we get this gap we may end up seeing this portion of the gap to
remain open and that would present us a fair value gap for a later time we
would look for price to a later time come back and close that in but leave it
open during this specific trading day again that
09:56
would begin our thought process like that if the gap occurs late new york
opening or after 10 o'clock in the morning to 11 o'clock in the morning the
news events that usually release there so we have two reference points here
the opening of the gapped up candle and the close of the up candle right

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before the gap forms and again as price trades lower lower boom it hits that
and we would see a complete closure of the gap that would be a full return on
a vacuum block in other words everything has completely been closed in
10:40
this whole range here is 100 filled this is in effect perfect delivery of price once
it's done this this is completely balanced out now and if we're expecting higher
prices if there's liquidity that hasn't been sought out after uh prior to that
highest high that formed on the gap opening and back bullish liquidity above
the marketplace would now allow price to drive higher so this could be a buy
here and now notice buying here and using a stop loss below the lowest low
your risk is more defined for
11:15
more leverage but still having the same potential parameters for exposure
percentage of your equity if price was to trade down and hit that level and we
start to see a rally up we don't want to see price ever come back down below
the level that would have caused it to close the gap when we see this we're
looking for the up candle that formed at the gap we want to see that low be
cleanly broke through we don't want to see it hesitate here because otherwise
that would be a bearish order block right so what we're looking for is we're
11:56
anticipating the bullishness of this move to drive right on through that last stop
candle and when it gapped up because now price has already been delivered
efficiently that vacuum of liquidity has been completely balanced out we
traded down with the two down candles to close the gap now we've had a
bullish move up so what has happened price has been delivered on the
downside to close the gap and now it's trading up there's no reason for price
to come back down it's closed in and filled in that vacuum
12:25
of liquidity there's no reason for it to come back down and trade below the last
point of reference before the gap which would be the close of the first up
candle so when that closes in that range the vacuum block is completely filled
in and now price is permitted to trade bullishly higher and once it takes out
that high we would recently expect to see price continue on the upside so in
summary a vacuum block is nothing more than a breakaway gap what i teach
with the breakaway gap is because it creates a vacuum of liquidity
13:03
you have to understand not all gaps fill completely and why do we anticipate
the gap sometimes not filling if there's a bullish order block in this case if we're
bullish and we gapped up the price may only come down to a bullish order
block that would be inside that gap and price just comes to that level and then
stops trading lower and then rallies higher leaving a small gap which would be
classified as a fair value gap and we could use that at a future time when
price is now trading lower and we would look for price to come down and
13:35
close that gap in but if it stays open we would label that while we're bullish as
a breakaway gap and it would show willingness and strength to get in there
and expect higher prices so for expecting bullish prices and price closes in

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that gap it's filled in that vacuum of liquidity it gaps up we close in the gap with
price delivery on the downside price trades bullishly up through it so now
we've had both passes in price and delivery we've had it settle down and rally
up so there's been no reason after that
14:09
point to see price go down below that first stop candles close if it does the
shade is probably going to be suspect and you would want to look to take
some profits if you've seen a move like this take something off but if it starts to
correct and go lower you want to take the complete trade off because there's
no reason for it to come back down into that area once it's already closed the
gap so then this is a bullish vacuum block the reverse would be seen if we
had gapped lower and we would wait for that gap to fill
14:41
in on some up candles and then we would go short in the same venue that we
would do here looking for long system in reverse.

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Liquidity Voids

the reinforcing of liquidity voids and when to anticipate ranges to fill in okay a
liquidity void is a range in price delivery where one side of the market liquidity
is shown in wide or long one-sided ranges or candles price typically will want
to revisit this porous range or void of contrarian liquidity okay we're going to
look at an example of a liquidity void
01:23
and when prices in a small consolidation or trading range we call this price in
balance in other words prices in a point of equilibrium at some point price will
eventually move out of the consolidation when this occurs we know that
there's a participation in the form of smart money smart money is the only one
that has the deep enough Pockets to cause price to move out of
consolidations or move at all really in any significant manner this causes a
price imbalance or as we call it displacement price can stay away from that
02:09
drop down aggressively where there was only two or three candles that
moved away from that consolidation that range can stay open for a while
there's no specific time limit on how long it's going to take for these voids to
close in and that's one of the repeating questions I get a lot is there a way to
know how long it's going to take for these to fill in what that void would be in
terms of how fast and when can we reasonably expect it to fill that's all going
to be germane to what you're seeing in the
02:42
Market at the time you see the voids they can stay open for months they can
stay open just for a brief session intraday and they can close it in it's all going
to be relative to what you see in price action around that void I say void what
am I specifically looking at and referring to it's this small little area of price
action where it was only delivered on the downside we have we have long
bodied candles where price has only been delivered on the downside and has
a small little Gap in between the two biggest Down Candles
03:21

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this is what we framed as a liquidity void now this is a one minute chart
because a one minute chart is going to give me the opportunity to show you
how there are pockets in these big runs and not this is a big run in terms of
how many Pips it moved but it's a big move away from that consolidation in
relative terms so the Shaded area that consolidation price moves aggressively
away from that when we see this this is indicating that there are smart money
in the marketplace and they believe that price is wanting
03:50
to go lower now because they're smart money their their orders are going to
be larger than ours and that means their participation is going to have to be
scaled in they can't facilitate their entire net short position in all at one price so
they have to gradually work that position in it may require them to take a little
bit lower entry sometimes they maybe push it higher and run back above that
consolidation and take it in the form of running out buy stops and they can sell
to those buy stops but that's not the
04:19
point of this teaching we're going to specifically deal with the liquidity void
alone when we have a liquidity void and it's broken down like this what is it
basically the same there's a void of buy side liquidity that means the markets
aggressively moved away from that consolidation that's shaded in and
because it repriced aggressively lower it was all on South Side liquidity only
very little buying took place in that rundown so the nature of a liquidity void is
that we'll probably see with a great deal probability
04:55
I'll move back up into that 104.76 level which would cap or fill in the entire
liquidity void that we see in the form of those two big candles that drop down
away from that consolidation but remember it's a void of buy side liquidity that
causes downward ranges like this which is what we call a liquidity void in
other words we expect price to come back up and trade right back over those
same price levels that we see here between 104.76 and 104.50.

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a five minute chart that's in consolidation you see this time it's only showing
as one big five minute candle that drops down aggressively that same area is
denoting a liquidity void again it's the absence of buyers or buy side liquidity
and they're running lower aggressively repricing so prices jumping down into
that 104.
06:03
40 to 104 30 range before they start seeing buyers again but pay attention to
these lows down here we're gonna take a look at something while price is
showing a short-term support level like this what's going to be building up
below those lows sell stops so if we anticipate price potentially going up and
closing in that range that we've identified here as a liquidity void what we're
seeing there is a big single five minute candle that's bearish sometime in the
future we expect to see that entire range of that down candle
06:37
that big long thin candle that we've identified here as a liquidity void that will
be covered back over at some future time in other words with that range with
bullish price action in order there's going to be a bullish candle or bullish price
Wing that covers that entire range that's identified here with the liquidity void
when it does that price action has been balanced out in other words it's been
a complete and uniform delivery of price action it's been offered on the down
move and it's been offered on the buy move up
07:11
you see here the cell stops below those lows get ran and price runs up at this
point here you would reasonably expect to see that liquidity boy completely
closed in sometimes it does and then sometimes it doesn't sometimes it'll
come right back down run an area of liquidity again that same equal lows and
then it runs up and hits it and that last portion noted here you can see where
that fills in the liquidity void closing right up on that 104 76 level looking at this
price action here you can see there's several trades that you
07:45
could have taken even on both sides of the marketplace but the ultimate draw
on price was to get up to that 104.76 level closing in that liquidity void note
again the stops that were ran below that low here right before the void was
closed that low would be the buying opportunity and also you can see right
before that load is being shown here with the arrow there was a short-term
load that price dropped down below to hit that same 104 10 to 104.

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08:26
05 level uh the uh the buy stops that would be below 104.10 on the initial
short-term low right above that bold Arrow I'm denoting for the last low before
it drives up to that 104.76 level that run on those cell stops what was
necessary for them to facilitate new logs so that way if they're going to take
out the 10476 they're going to make it worth their while you're going to pick up
some buy orders around 104.
08:50
05 104 big figure depending upon what data feed you're looking at but on this
here for the Forex LTD platform for demo trading the feed shows 104.05
thereabouts and then price it right makes a run of 75 Pips up to uh 104 76 and
closes in that liquidity void seeing again just on a 15 minute time frame you
see now that big one single 15 minute candle drops lower away from that
consolidation again denoting that liquidity void and you can see now a little bit
more friendly on the eye where the runs on those 104 10 and 104
09:41
08 cell stops would have been on the 15th and on the 16th of December but
notice also here we have something that's a little bit interesting I want to show
you there's two times it trades up into that 104.76 level but this time it Trace is
a little bit higher than the first time I hit it first time I hit it it was around 1500
December 16th the second time I hit it was on the 19th of December when we
see this second time run up into that it just pokes its head above the previous
time it went above 104.76. but
10:21
look at the two candles immediately after the run into 104.76 there's two Down
Candles one has a little bit longer Wick and then the next candle it gaps down
at the opening and creates a bearish candle I want you to look at something
specifically in here see that little space right there where the bodies don't
close in what is this this is a gap okay it's a price Gap so if price gaps in here
how can we use this information we see that the liquidity void has been closed
in they made it run one more time in the 104.76
10:55
blowing out the the level two times closing the void and if we know that they
gapped down or made that liquidity void away from that consolidation around
that 10480 institutional level that's what it's moving away from it trades back
up into 104.75 or they're thereabouts two times it trades there we know that
it's more likely to trade lower because it's moved aggressively away from that
10480 level and it's tried couple different times to get up there and remember
pricing in on an Institutional level has to happen in
11:29
graduated terms in other words it can't be done on the first pass it goes to a
level it runs away from our level let's say like that first it runs away from a level
in this case it moves lower from 104.80 and then it works its way up gradually
up into that 104.75 level once and then sells off why did it sell off here initially
in the on the 16th of December because they priced in some more selling so
they build more of a natural position there then price trades one more time up
in that 104.75 level 104.76 on the 19th of
12:00
December and then we see price immediately two bearish candles but one
gaps down a little bit what is it showing you there again an aggressive move

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that it wants to go lower but now it's giving you a golden opportunity this is
where we're going to talk about gaps a little bit more liquidity voids our Gap
during price Trading where it extends across the uh this distinct range when
we see a gap where price has closed from one candle and gaps into another
opening of another candle and that separation between the two price don't
12:33
have a closure in other words it doesn't have a range closing that in it creates
a common Gap what can we do with this common Gap well we have a
inclination that we're going to be moving lower so if we're going to be moving
lower and we see a gap here we can put an order in here the cell with a limit
order at 104.70.
12:54
so in that price Gap we can be a seller at that specific price level at 104.70.
look at the reaction there once it closes in that Gap only the body closes it in it
Wicks up into the body but the bodies of the up candle as it closes that Gap
that's all that's necessary very very little drawdown and immediately it trades
lower and reprices and makes it run down below the equal lows that's been
formed on the 15th of December and the 16th of December seeing a little bit
more information here in this 15 minute time frame you
13:29
can see once that 10476 level had been hit the Gap had been closed at entry
at 104.70 with an ideal use of a common Gap price makes a run for 104.04
cell stops where we can take a cover on positions that are short their cell
stops are used to pair up short covering buys with and price makes one more
leg lower making a run out on 103.
13:54
65 so again one more time pairing up sell stop orders with buys to cover on
shorts everything that I'm showing you here is this reverse with when the
market is bullish and I'm going to give you examples in your PDF file so don't
be uh feeling a little bit lost here because there's a lot of examples that I can
give you on gaps in liquidity voids and Order blocks.

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Liquidity Pools

liquidity pools when to anticipate raids our liquidity is the open interest of
buyers and sellers in the market and can be further defined by those entities
at or near specific price levels now if we're looking at this graphic depiction on
the left hand side the gray area represents the current price that you're
looking at for your specific asset class and we'll say for instance say this is the
the dollar index that we're looking at
01:15
if the current price is the market price our understanding is that there's going
to always be our participation in the marketplace by buyers and sellers we
don't always know why the interest would be in the form of buying or selling
we're not really so concerned about what other Traders are trying to do with
their trades but we are interested in knowing where their interest May reside
in new pending orders new pending orders are in the form of buy stops above
the marketplace or usually more refined smart Money traders
01:55
will be selling above the market price below the market price typically you'll
see sellers and usually it's the smart money that usually wants to buy below
market price usually it's the retail Trader that is so reactive to price they're
usually buying and selling at market price the liquidity that we seek as a smart
money-minded Trader is that we want to sell to the buyers above us or above
the market price so we want to be a seller above market price we want to buy
below the market price from sellers that are willing to sell
02:40
below the market price and by having this understood you're always going to
be selling at a premium and buying at a discount now this is going to be
diametrically opposed to what retail is typically taught they're usually taught to
buy on a Breakout or buy on some continuation pattern like a bull flag or or a
wedge of some kind what we require is the market and pull back into a level of
discount and that requires a bit of discipline and most Traders especially in
the retail Universe lack discipline in terms of

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03:20
patience when we view price we look at where the market is presently and
this is the market price if we're looking at a bearish market if the undertones of
the marketplace suggest that the dollar is bearish what we will be willing to do
is we want to sell above old highs whereas the buyers that would view that
move above an old high they would see that as a bullish Breakout so they're
going to be willing buyers up there so we know if price prints at an old high or
just above an old High there's going to be buyers that want to
04:00
accumulate new loans up there or they have shorts on and the market has
repriced above an old high and that's exactly where their stop loss for
protective short position would be residing in other words they would have a
protective buy stop above and on high we could sell at that moment by doing
that what we're doing is we're actually selling short in a pool of liquidity of
buyers above old highs there's a pool or a collection of orders that Traders will
build up around now ninety percent of retail Traders aren't even aware that
04:40
other Traders are doing what they're doing okay they're just they're thinking
myopically about themselves so what we do is we we go into the marketplace
and we role play by looking at the charts and say okay if I were short right
now where would my protective buy stop would be if I was long right now
where would my protective cell stop be by doing that you can get a good read
on where other Traders would have their stop-loss orders above and below
the marketplace if we go back to an example and we
05:13
suppose for a moment that the dollar Index would be bearish and I'm not
stating that's the case now but just for example purposes only we're going to
say the asset that we're looking at is the dollar Index and we believe it's
bearish we could wait for a rally to go above an old high and look to go short
there with the expectation that that move above an old high would be a false
Breakout and then the market would be price going lower to some lower level
liquidity reference point in terms of maybe
05:45
another old load that it would run below or a bullish order block or it could
close in a fair value Gap let's say for instance if the dollar was bullish we could
look below the market price and see that there would be sellers on a breakout
looking for a move lower because most retail Traders are incorrect and that
repricing would offer liquidity the market price and below we want to be a
buyer so we're going to try to buy it at a discount so we are trying to pair our
buy orders with those willing participants that want to sell
06:22
on a sell stop they are either selling on a stop in the form of a breakout
looking to make a move lower or they have a long on and they're protecting
their long position with a protective sell stop so when the market trades below
an old low we're going to view that as an opportunity to buy up the sell side
liquidity to establish a long position and wait for a repricing for the market to
trade above an old high so we can unload that position or trade up into a
bearish order block take profits or trade up into a fair value Gap or a
06:59

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liquidity void by viewing the marketplace in this market efficiency Paradigm

that I've been teaching you it allows you to see if the internals of the
marketplace and you don't need to see a order book you don't need to see a
supposed ladder or anything like that depth of Market you don't need any of
that stuff you can actually see where the orders would be residing with
common sense and just visual reference to where the charts are showing old
highs and old lows the trick is knowing what the underlying paintings of the
market is is
07:34
the market predisposed to go higher or is it predisposed to go lower once you
do that higher time frame work that leads you to be bullish or bearish on a
specific asset class then it's not hard to sit and wait well it shouldn't be hard to
say it like that it will be hard for you initially because you're wanting to get in
there and do something right now but when the market is predisposed to go
higher we wait for the market to go down below an old low to knock out those
weak Longs or bullish traders that trailer stop
08:07
loss off too tight the market will correct and go lower and take out an old low
that accumulation of sell side liquidity or knocking out the cell stops below the
marketplace it injects the marketplace with willing participants to sell the
marketplace so Engineers liquidity into Market so if there's a rush to sell the
smart money and us we look to accumulate that Rush of selling interest and
we'll accumulate those orders really quick and then we'll look for a move to go
higher and this dopsis said for when
08:41
the Market's pretty supposed to go lower we wait for the market to trade
above and on high that buy side liquidity is injected in the marketplace it's a
rush of buy orders at the market and smart money will go and accumulate and
sell into that with the expectations that false break above an old high while the
market is underlying bearish we are going to sell short in the form of a run on
liquidity or a liquidity pool so what does this look like graphically

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a run on a ghoulish liquidity pool and by

09:15
definition what that is is the low that is under the current market price will
typically have a trailed cell stop under it for long Traders one cell stops for
Traders who wish to trade on a breakout lower in price for a short position
also reside below old lows validation of this setup or condition is when the low
is violated or Price moves below the recent low and the cell stops become
Market orders to sell at Market this injects cell side liquidity in the marketplace
and typically this is paired up with smart money buyers
09:50
entry techniques using this concept when underlying Market is bullish before
price trades under the recent low you're going to place a buy limit order just
below or at the recent low you're buying the sell stops like a bank Trader or
any other smart money entity would defining the risk with this setup this is
where your work is going to be you're going to need to see the low identify
how far it could reasonably trade below it and that's going to be taught a lot of
detail was going to be taught to you across the next coming
10:26
months because there's going to be things we look at that haven't been taught
yet but for exercise purposes now and to observe in in past examples in
hindsight in your in your charts the low that you're trying to buy under okay
you're going to expect or anticipate on a lower time frame chart like a 15 or 30
minute chart you can expect a 10 to 20 pip sweep below the old low a 30 to
50 pip stop is ideal if your entry is under the low and not above it because you
you generally if you're trying to get ahead of the move trying
11:02
to buy Above the low or at the low you're really probably just fearful you're
going to miss the entry uh it's better to wait for the market to trade under that
low and once it trades under their 10 20 Pips that's a really good ideal entry
point because if if you use a 30 to 50 pip stop while entering below
significantly below the Low by 10 or 20 Pips below the low if you use a 30 or
50 pip stop at that point it's going to take a real significant move to knock you
out and here's the thing if it starts moving
11:32

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beyond 25 Pips I think is a fair assessment um below the low it's probably not
just a stop run you're probably looking at it much further uh decline so when
do we anticipate these stop rates well in this case here this Market was on
there lying bullish it was the Kiwi just so you know it's a kiwi dollar trade there
was an old low there and the market had a liquidity pool resting below the old
low Market trades below that old low and accumulates all those cell stops now
while it's doing that okay it's
12:06
going to look to offset those new Longs by smart money above old highs and
you can see the equal highs over here to the left or I've highlighted it and draw
that out to the right side of the chart you can see where profit taken with buy
stops when they're rated and that's the other contrary liquidity pool or where
the buy stocks would be resting so you're accumulating sell stops and
offloading them to buy stops you're accumulating the cell side liquidity for
longs and you're Distributing your lungs to
12:42
the buy side liquidity all you're doing is the same role as a market maker and
a liquidity provider remember it's that market efficiency Paradigm just put into
mechanics and and operation.

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let's take a look at the charts themselves and we'll go over a couple examples
okay folks we're looking at the Canadian dollar U.
13:04
S CAD pair on the left hand side we have a daily chart and I want you to take
a look at the bodies of these candles over here and we're going to look for a
sweep below the bodies of those candles okay there's self stops below these
lows and we're using this previous day's candle low and that low comes in at
one 3102 131 O2 and that's what that level is here and we transpose that
level over onto our 15 minute time frame 3102 and we see on this day here
price trades down below it okay and choose a willingness to Rally away
13:47
and news is coming out and there's going to be a interest rate announcement
on this particular day I'm going to be looking for a run below this low here
okay so now we have a low and we now have another lower low right here
that we're finding on a daily time on an intraday basis so we're going to be
looking for a run below 130.
14:13
95 130.95 so if we see a movement down to 130 85 or 130 75 we could be a
buyer so we can do a buy at 130 90. we're going to say that's our entry point

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and price trades after watching a little bit here trades up higher we're waiting
we're not considering anything above that level we're looking for a move down
below it price trades right down below here and this candle's low comes in at
130 83 so to stop I'm sorry the limit order would have put you in Long at 1 30
90.
14:57
and the actual low comes in at 1 30 83 so it's not even seven Pips it's small it
is seven Pips uh draw down and price immediately shares a willingness to
want to Rally up and we're looking for a run up into this swing High where
there would be a a contrary liquidity pool where buy stocks would be resting
so we're gonna be looking for a 13360 as a way to unload and price rallies up
and there's your run to one Thirty Three Sixty there right here so 13360
occurs right here on this candle right here it still goes a little
15:56
bit higher but you can actually see it unfold here as well on the daily so that's
a liquidity pool example on the dollar CAD pair really nice example of a low
risk entry very big payout.

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here so let's go into another example okay we're looking at the dollar Index
you see the Dollar's been in a bullish move here and we probably cooled our
jets for the week going into Friday this is Thursday's Trading and this is
Friday's set up here so price creates a low in here intraday and we have some
buy stops Above This
16:47
High here and we have some buy stops above this short term High here as
well price trades down clears out the sell stops on the marketplace here and
your entry could have been a 102.85 or 102.80 uh the low comes in at 102.69
so you definitely would have had a easy fill on that regards to spread So
Below this uh low you'd be long and we're looking for buy stops above these
equal highs and then buy stops above here to unload that long position that
would be accumulated below this low price rallies up smaller retracement
17:33
could have been scary for you here but you're looking for a rejection away
price Taps that high just falls short of it explodes up through takes the buy
stops smaller retracement again runs right up above hits the buy stops and
this is what you see on Friday and we talked about this in the market before it
actually happened running up and buying uh taking out these buy stops and
then seeking the cell stops below these relative equal lows and you see that
example as well so because the market was in a trending environment
18:09
prior to Friday and Friday being the end of the week we're going to be looking
for the market to want to take something off the table and I'm going to have a
choppy sideways day and that's why we weren't expecting a new high but we
were looking for a run on those buy stops and then running out the cell stop
so you can see an example again here with the dollar Index.

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ICT Fair Value Gaps FVG

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fair value gaps and it's a concept of trading inside the range okay what is a
fair value gap it is a range in price delivery where one side of the market
liquidity is offered and typically confirmed with a liquidity void on the lower
time frame charts in the same range of price price can actually gap to create a
literal vacuum of trading thus posting an actual price gap okay let's take a look
at a euro dollar daily chart okay and i'm going to ask you where do
01:08
you see an example of the fair value gap okay i'm going to draw your attention
to it here it's a blue shaded area here on the daily chart let me explain to you
why i'm shading in that specific area of price it's about a 20 pip range on the
daily but inside of that blue shaded area that is what is common referred to in
my work as a fair value gap so take a look at what makes that gap so
significant as you can see here the candle to the left of the down candle we're
looking at that comprises the fair value gap
02:03
that's this candle here okay and to the left of that we have the higher bearish
candle and i'm drawing attention to the fact that it has a down close but it's
come off the low okay so we're looking at the low up to the close that little
wick in there if you take that same range okay and you look at our down
candle that created that fair value gap on the daily chart that range between
105 15 to approximately 105 big figure inside our down candle and in this
candle here that's highlighted from the
02:47
low to the close that price range has been traded up into once already
delivering the buy side liquidity in other words on this candle's low up to the
close price had come off that low so if it came off that low to have a higher
close on that candle that means the buy side liquidity had been offered on that
range between 105 15 to 105 big figure so that means when we look at the
down candle that makes the fair value gap we're not concerned with the 105
15 to 105 big figure price range so we're going to
03:27
be drawing our attention to that low here and we'll draw that out in time but
let's now look at the other candle that frames our fair value gap the next area
at which we see buy side liquidity offered is from this green candle or up close
candle to the right of our down candle that makes the fair value gap the open
to the high on this candle has offered by side liquidity as well so we have seen

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price offered on the up movement or buy side liquidity on two candles one to
the left of our fair value gap creating down candle on
04:11
the daily chart and one candle to the right of it where we saw price move
higher in portion of that down candle so we have a range left that's open and it
specifically is this area right in here so we're delineating the low of the
previous candle and the high of the count to the right of the down camera that
creates that little pocket of space so between 105 big figure down to 104.
04:47
75 about 25 pips that is our fair value gap and it's been left open there's been
no trading outside of the movement of that range except for that down candle
and no up movement at all on this time frame now when we're looking at fair
value gaps okay it's important to remind you that if we're studying a specific
time frame the gap occurs on the time frame you're looking at you can break
this down further into smaller time frames but in the smaller time frames you'll
probably end up seeing a liquidity void
05:22
where the gap would be indicated here on this time frame on a lower time
frame it would many times appear as a liquidity void where it's multiple
candles that create that open space of range okay so now we have our daily
chart here we have our specific levels in mind that we're watching and the two
little line segments delaying one candle is low and one candle is high in
between those two reference points we have that big down candle and the
exposed area in between that is the fair value gap that only the
05:57
cell side liquidity has been offered so imagine that paint brush analogy i've
used many times in the past on the down candle that creates the lowest low
here there's a range with the candle before it and the candle after it where it
has left a pocket of porous price action or only delivered on the downside
we're going to expect price to eventually want to trade back up into that little
gapped area so this area in here that's where we're looking to see it fill in
that's the nature of a fair value gap
06:32
so when we look at price and we're zoomed in a little bit now here with a four
hour chart okay and you can see that the two specific price levels again are
delineated as well and we have a low delineated for potential liquidity run on
sell stops below the low price does in fact go down below that previous low
and well now we can expect to see what form a turtle suit or false break below
an old low why would we reasonably expect it to go back up to fill in that gap
well because we've already taken the sell side
07:06
liquidity out by running an old low we have equal highs here delineated also
on our chart on a four hour basis and right above those equal highs we have
our fair value gap eventually price does in fact trade back up closes the fair
value gap in that trade or that idea is now complete while it doesn't look like a
great deal of money or pips offered it's a very highly profitable and probable
condition in the marketplace where we can see these fair value gaps and
double tops where buy stocks will be resting above it and if you see a
07:46

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turtle soup run below an old low you're in a range this time of year going into
the end of the 2006 trading year going into the holidays uh trading is going to
be range bound and when you're in a range bound consolidation type format
or profile for the marketplace this is the style trading you want to be doing
looking for stops and looking for fair value gaps so it was well over 100 pips of
a move and it only took about two days to to complete that little price swing
and in fact this range of price action in the form of a fair
08:20
value gap was actually detailed to you in the beginning of this week where we
delineate it on the daily chart the fair value gap as outlined here and on the
daily chart you can see it's been filled in here so while there's a lot of
information about fair value gaps and breakaway gaps and measuring gaps
that's going to be coming your way in the form of the december study notes
just understand that everything has been shown here is reversed for buy side
liquidity runs where the market will come back and closing a fair
08:54
value gap that's below the marketplace to seek to fill in the sell side liquidity i
want to take a quick look at something else because i mentioned that the
gaps fair value gaps liquidity voids order blocks and liquidity pools they kind of
overlap a lot of in a lot of different ways that you're probably not aware of yet
and that's what the benefit of having the pdf files study notes and also the
supplementary teachings that's going to happen next week monday through
friday while we're away from live trading and live sessions
09:27
with the ict mentorship you will be getting a daily video supplementing these
specific techniques and concepts for the month of december so to help you
really dial in on the concepts going forward so that we are prepared and
primed for the content for january 2017. but i want to take you back over to
the charts and give you something by way of understanding the overlap of
liquidity voids and fair value gaps okay folks we're looking at at 104.
09:59
75 level i have the charts trained in on a five minute euro dollar and we're
seeing the very moment that that 104.75 level was pierced here on the 19th
this is the second time it trades through that 104 75 level and i want to just
draw a special attention to this area up here okay and now i'm going to show
you what it looks like when we have a a run above an old high which is what
this is 104.
10:36
75 it's also run on liquidity in the form of a liquidity pool so it's running buy
stops but also it's hitting that fair value gap also so straight into the fair value
gap and i said in lower time frames many times this will create a liquidity void
you see a movement lower here on this candle and then we have another
candle here look what happened the next candles open is down here so you
have this gap in here so price trades up into that and closes that in right there
see that price then moves lower significant break lower
11:35
and then lower and ultimately trading through to where the cell stops were
mentioned earlier okay let's take a look at it on a 15-minute basis here's the
first time it trades up into that 104 75 level closing that fair value gap and then

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here's the second time it trades up into it running out the previous high the
previous high this time was at 104.
12:07
77 this candle's high comes in at 104.78 so it trades to it just by one pip now
watch the difference here we have a down candle here a lot of movement
lower but it comes off that low watch what happens now we gap we get from
this candles close 104 72 to an opening on this candle of 104 70.
12:38
now it's only two pips difference but that creates a what a gap so we can be a
seller at a more refined price level mentioned and earlier time we said that we
could be a seller at 104.70 on a limit when price trades back up to that level if
it doesn't give us an opportunity to go on a limit we can trade it right as it hits it
live it can be in front of the charts right there there's your cell now here's the
thing look at the body's clothes on this candle right here the close is 104.
13:15
72 that's exactly the high on this candles close 104.72 the wick trades through
the body but the bodies of the candle completely close in here so this gap
between these two candles these two black down candles this gap in between
the bodies have perfectly been filled in with this up candle so this is exactly
what i'm referring to as efficiency in terms of the price delivery if this
movement lower has been offered on the downside okay now think look
closely this candle is high comes in at 104.
13:55
78 the close is at 104.75 the next candle it opens at 104.76 i'm sorry 104.74
and then it creates a high at 104.76 so it moves two pips up so from the
opening to the high is buy side liquidity offered then it trades down for a down
close then we gap down here there's a gap of buy side liquidity from these two
candles from this candle's opening that's exactly where this price goes on the
upside from the open to the high the open is 104.63 the high is 104.
14:34
74 which is the opening here 104 74. that's the last point at which the buy side
liquidity is offered on the up movement then it's all down from the opening it
fills in that perfect delivery of price right there and then at that moment when
you see this live you can be a seller at that moment and price does exactly
what we mentioned earlier when we're looking at the higher time frame this
delivery here price from this candle is low up to the close buy side was offered
here and buy side was offered from the opening to the high
15:17
here so there's a gap closure here on all the downside movement here so this
has all been closed in so efficiently we could look for this range being
delivered lower we have to consider back here where price was delivered on
the buy side here so this low comes in at 104.55 so if we drop that down to
there 104 55 that's where the last point at which the low had traded up to the
close so buy side liquidity has been delivered here it's all sell side liquidity at
this moment here it's all sell side now
15:57
nothing over here until we get over here so we created a gap down here price
trades up hits it here hits it here we could be a seller at 104.55 or 104.50
looking for a move down below 104 15 to 104 10. there's your run right there

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perfect delivery of price hits it here hits it here look at the high on that candle
104 55.
16:37
104.55 the low on this candle 104 55. the buy side all green candles up then it
comes down so this is all efficiently traded it's a full block of delivery
deficiency up and down both ranges on both sides of the delivery of price
dubai and the south side have been offered in here from this low to this high
once we break this low here we're all on sell side now it comes right back to it
here perfect delivery efficiently priced at 104 55 does it twice time to sell it off
and wait for it to run the cell stops below this low
17:17
and this low down here let's just put a line on it so you can see right there and
watch the delivery boom perfect so perfectly delivered down into the cell stops
below the low lows.

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Divergence Phantoms

momentum divergence phantoms market maker trap and i don't teach a lot
about indicators because they're mathematically derived and they measure
the past as a new trader i used them a lot and had a lot of false hope placed
on them i like looking at them at certain points in in price action because i can
see where i used to think price would go relative to a indicator
01:06
and i can tell you now it's a completely different paradigm shift that when we
see price action indicating that it wants to go higher not looking at the
indicator many times the indicator is going to tell you it's probably stopping
now or it's petering out it's making its uh reversal or it's running out of
momentum if you will the the idea is the indicator is going to drive price as a
retail share that's what we think and it's not the case the indicators don't have
any reflection
01:37
whatsoever about what the market is going to do next price has no awareness
of our indicators but we can reverse engineer that thought process and use
that market efficiency paradigm i've been teaching since the beginning of this
mentorship where we look at how liquidity can be either engineered or
neutralized and whether they're willing or unwilling participants the market
makers can draw traders into the marketplace or take them out of the
marketplace and by unseating them they can assume their position or put
them in on the wrong
02:11
side by engineering liquidity runs and then take the market the opposite
direction in this case what we're looking at here this is the uscad is the one
hour chart and i have the chart trained in on the november 10th and 11th and
we're looking at how the market made a slightly higher high here than here
while momentum was already posting a potential bearish divergence now
when we talk about divergence there's two types of divergence there's type
one divergence which is your classic higher high but not seeing a higher high
in the
02:45

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momentum okay that's type one bearish divergence a bullish diversions would
be the opposite where we see a lower low in price but a failure to go lower in
the stochastic or whatever momentum indicator you use that would be a type
one bullish divergence in trend trading or momentum trading there's called a
type 2 trend following and it's commonly referred to as hidden divergence and
it's been never really associated to who discovered it but nick van nice he was
the guy that released it to the trading community at
03:22
large uh george lane gets a lot of credit and falsely i might add he was not the
creator of stochastic he's not the uh you know the inventor if you will of
divergence but uh nonetheless i it's one of those pet peeves of mine i hate
when i talk about this like i always got to bring it up because it's just like a
stick in my crawl i can't stand it so i have to keep reminding the folks that are
in trading if they talk about divergence they probably should be thanking a guy
that they'll probably never even meet
03:53
but his name is nick van nice and it's a trend following divergence where if you
have a higher low but the stochastic cycles down makes a lower low that's
trend falling in nature and it usually gives us a really good momentum entry
for bullish markets now i'm not teaching entries with stochastics or any
momentum indicator here but i am going to teach you how to use a means of
sentiment or how retail-minded traders are going to think about price i like
these ideas because when we read the books when we get into
04:29
trading we get all these indicator-based books and textbooks and courses and
cds and mentors and everybody else in their disciplines okay and believe me i
went through all this myself so it's not like i completely you know walk on
water and never had those issues before in the past i came up through all that
stuff but the indicators teach us and they try to uh promote this idea that
indicator based trading is the way to go so therefore there shouldn't be no
thought process involved at all about studying price just study if the
04:59
indicator is overbought if it's oversold if it's diverging variously or bullishly and
that's it so you have four conditions there are we overbought or are we
oversold and if we are overbought is it diverging bearishly or if we're oversold
are we diverging bullishly and if it were that easy then everybody would be
making money and problem is there's some things you have to look at to
determine if the market is in fact bullish or if it's bearish and here's one for you
there's a fifth condition
05:27
is there really a time to be trading because there's some time there isn't
marxist will stay in consolidation and you just don't want to be doing much of
anything so if we're looking at an example here okay where price makes a
higher high like this okay forgetting what's over here like a retail trader like i
did i just looked at okay well now we're making a higher high here so naturally
i'm just looking at any time when the indicator was failing to make a higher
high that's how i started in the
05:58
business folks in 1992 i'm looking at charts and this is what i'm looking at a
bearish divergence okay so i would be looking to go short there in 1992 and

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1993. but understanding what i know now there's liquidity above this high
they're not going to keep price this close okay and not run that high so there's
buy stops above there so if i see bearish divergence in here and it's qualified
with this move here we have a crossover it starts to drop down okay but look
what we have we have a down candle here
06:43
we have equal lows in here so the market drops down clears out the equal
lows dips into this bullish order block this also in here we have a range from
the high down to the open on this candle this range in price price trades down
into it the midway point of it okay just like a mean threshold okay this portion
price comes down delivers price below these lows in here indicator folks are
going to say okay well this is a solid bearish divergence so we're going to be
expecting lower prices price action based traders are saying
07:24
this is actually a buy and there's a equal high up in here and we have liquidity
above this high here we're too close to these levels up here not to run them
market consolidates a little bit in here and then boom it rallies up makes one
more tap against this high here is price going to reject here no look what's
happened we have a low which is directly related to this cycle through on
stochastic and then we have this higher low with a lower low on stochastic this
is that hidden divergence or trend following divergence okay
08:08
this actually is a very powerful scenario if you know what you're looking for in
price and you see this qualified in a momentum indicator not that you're
basing your trade on the indicator but i like seeing this because what this is
doing is is arm wrestling with the guys that are looking at this bearish
divergence looking to capture a high just think about what it is when you're
looking at indicators the mythology is you can pick tops and bottoms with
indicators and while we can go back and look at the
08:38
charts and see many examples how that may have been profitable but there's
many times where it isn't profitable either so if we're going to be looking for
price action to give us clues as to where price is going to be reaching for you
can't get that information by looking at an indicator because all that's doing is
looking at the past and it's compressing all that data mathematically and
spitting out an output that output has absolutely zero bearing on where the
actual orders are in the
09:08
marketplace ubs credit swiss city they're not in they're not in the business of
looking at what stochastics is telling them that that's not what they're doing but
they are interested in where buy stocks and sell stops are okay and they're
attacking the liquidity on the fund level so when i talk about making a run on
stops it's not that they're aiming for retail stocks because you're not even even
in the same arena with them but if they can push price to an area above an
old high
09:36
or below an old low they know that there's going to be a pool of liquidity in the
base of fund trading so let's recall that market efficiency paradigm retail views
price and they see what they want to see in the context of an indicator buy or
sell overbought oversold market makers look at the participants thought

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processes about price and they manipulate their decisions based on what
they should be seeing in price the indicators way of engineering a thought
process behind a trader it's almost like remote control in many instances and
10:24
funds they trade with a trend following nature they're long-term momentum
trend followers but those long-term trend following systems that they use can
be targeted and usually it's in consolidations or sometimes if it's at a high
where they're making a top in the marketplace those funds that are
aggressive they try to sell short they make one more pass up there knock out
those individuals the smarter fund traders will go back in again but you notice
like sometimes when you get knocked out of a trade
10:56
the wind is taking out your sales you don't want to do it again you're afraid but
when we look at divergence in here okay there's two camps those that see
that higher high here and the subsequent movement lower which would
confirm in any retail trader's mind that they did catch or capture a top because
that's what they're thinking okay bearish diversions they're looking for tops
bullish diversions they're looking for bottoms you ask any trailer that sees that
they're not looking at
11:25
qualified entries and qualified exits and specific targets what they're looking
for is get me in at the low and i'll figure out where i'm going to get out later on
and believe me i've done that same thing when we look at price now we see
that yes they're going to see that as a bearish divergence they're going to
want to sell short and we expect that same measure of retracement lower as
well but we want to see it come back down and hit this order block and wipe
out the stops over here why would they want to come
11:53
down below these lows in here to gather up all the sell stops why because
they're willing sellers down here why would they want to go down there
because they want to pick up those orders that liquidity is offering so they can
buy them so price quickly reprices and now we would make a run above this
high here why because this is the real divergence okay or the new cycle low
on the stochastic notice it's not oversold it's not needed to be oversold what
we're doing is we're watching the momentum
12:23
shift back down just to get the cell stops then they make a run for where the
market really wants to be reaching for the orders not what this little indicator
divergence is indicating here so we're seeing retail view this as a higher high
in price with a lower high in stochastics which is what every textbook shows
that's a type 1 bearish divergence or a sell signal okay you might have saw 30
pips or so in your favor but you're not going to hold for just that you're going to
hold forever you're
12:52
going to look to see it go lower and lower lower you know what it's like to be
you know a new trader and looking at all this stuff it's the same stuff you did
as well as i did but if we wait for the stochastic to cycle down below this low
here we can anticipate that same thing occurring when it runs out some cell
stops and it closes in the range for a bullish order block then we can expect

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price to snap back higher and take out this whole assumption that it's a
bearish divergence in the marketplace
13:22
again price has no awareness of the divergence but markets have an
uncanny ability to be aware of the thought processes that are in all the traders
because of their orders because of their trading because of their their
leverage because of what they're doing in the marketplace the excitement
around specific levels so when we see this we anticipate price moving higher
not on the basis of uh bullish divergence that you would see classically with a
lower low and a higher low in the momentum indicator what we're actually
seeing is a higher
13:54
low relative to this low and here this being higher low but the momentum
actually is cycled lower again that's type 2 hidden divergence bullish it's trend
following nature we can expect to see price drop above this high here and
price does in fact that so you can see price gave a nice opportunity here and
those individuals that looked for this bearish divergence were left holding the
bag.

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the dollar swiss this is an hourly chart okay we're looking at base another
scenario where price has made
14:31
a nice rally higher and we're looking at what would potentially see as a type 1
bearish divergence now again retail traders are going to see that as well we're
making a higher high in price so if price is making a higher high here we're not
seeing that same thing reflected here so stochastic has crossed down and
now we have a signal confirming lower prices so what we do as price action
based traders we anticipate seeing some measure of consolidation to
retracement and we watch this low back here on the
15:07
stochastic which is relative to this low here what we're not seeing in our
expectation is the move below that low we're not expecting that but retail is
expecting that they expect this to be a top and price trading all the way down
to what would be seen as what classic support they're looking over here at
this low and maybe even low back here so in retail line sight they're doing this
this is what's all over their charts they're looking for a move down into this low
and they're looking for a move down into

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15:36
this low because that's what classic support resistance tells us from the
textbooks this is what classic divergence tells us they're going to catch a top
so the market's making higher high in here from this high to here we made
higher high it's not happening here in the stochastics so if it's not happening in
stochastics it has to be indicating it's going to go lower so they're looking for
price to trade all the way down to this level here that might be their first target
and then here's the second target because that's
16:04
support resistance what we see is this is the last down candle prior to this up
move so inside this range in here in this wick we expect price to trade down
into that now the question is going to be michael do i use the high or do i use
the body you use the body why because of the condition that's here we have
a wick and price is already traded several times through here but we've only
traded up from this point here so this down close we only had an up close and
up close and up close so we're going to be looking
16:42
for price to trade down and deliver on the sell side of the liquidity on this
candle's range so what i'm saying is we're going to look at this candle here
encapsulate that whole little wick down into the open okay and we're
expecting price to yes cycle down and go lower but not to go below the middle
of that body of that candle so for a move down into 96 45 to 96 40 as a low
end is is expected that's reasonable but we do not expect that low to be
violated that same reference point down here in
17:23
the stochastic is here we expect the stochastic to trade lower than this low in
the indicator but not show it in price we expect price to trade higher why why
would i expect uh that on to unfold we have all this up here all sell side
liquidity offered say we would be expecting price to be delivered on a move
higher to close in that range so we're looking for a difference in direction and
we're just going to use this old low so we're going to use support resistance
ideas but we're going to be diametrically opposed to what retail
17:59
mindset's going to be so we're looking up here after it drops down to here so
we're doing two things we're bringing prognostication we're forecasting and
we still have targeting so we know what we're looking for for entry we're
expecting anticipating that mark event to take place we're going to go long
around 96 45 with an exit around 97.
18:20
08 retail's thinking this is a top it's selling off it's going to break this low it's
going to make the low attempt to retest here and maybe even run down here
based on just an indicator what we're looking for is yes the stochastic is going
to drop down as price should drop down but the stochastic is going to drop
below this low in the indicator but it won't go below this low here because the
institutional overflow is supporting higher prices and they're going to want to
close this range in
18:47
okay now watch what happens right there this candle slow is 96.45 look at the
reaction there boom totally different from what retail would be expecting
higher low to this low lower low and stochastic okay this move here not

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necessary don't worry about that one here we're not talking about that now i'm
focusing primarily on where the divergence gets traders in a pickle and it
messes them up in this case we were looking for liquidity on the upside okay
all i did was use a simple low back here and if we use order block theory
19:44
that puts you up to here and you have equal highs up here as well so 97.60
and then you have 97.28 and price blows through both of those okay so that's
an example of a few divergence phantoms where folks like i did when i was a
new trader you go in you're looking for scenarios to anticipate specific things
to unfold and the opposite happens this move down here dips into this order
block right here clearing another area cell stops and then rallying ultimately
another bearish divergence here with a higher high
20:41
is that a bullish move i'm sorry is that a bearish move is that a bearish move
expected in here well if you looked at the retail mindset you have bearish
divergence we're going to be expecting this low to not be violated but the low
on the stochastics will be there you go one more time type 2 trend following
lower low in the stochastics with a higher low in price continuation on the
upside another bearish divergence this is probably the top now it's got it's got
to eventually happen here's your bear's divergence
21:15
okay what happens price doesn't make a sell-off it just goes higher and it
ultimately punches one more time up and then it gives off a cell so please
don't think that indicators are going to be the answer if you're learning what
i'm teaching and you're getting still inspired to pull up indicators only pull them
up with this basis in mind only draw a contrasting view and it'll give you what
the retail minds are thinking and if you can do that and also see reasons
behind the scenes why institutional order flow is going to
21:46
suggest the opposite occurring chances are you probably got a good deal.

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Double Bottom Double Top

double tops and bottoms okay before we get into it um i want to talk about
measured moves and clean highs and clean lows if you look at this price
action in here we have a drop down in price with relatively equal highs in here
okay in the marketplace there is a pretty reoccurring phenomenon that takes
place about measured moves and you can see this price swing here projected
up gives

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01:37
us pretty close to that level up there and when i was going through my coming
up as a trader i took a lot of the things i learned from institutional trading and
retail trading and blended the two together and i knew that there would be
runs on stops above the highs and runs on stops below the lows and i noticed
that there was measured move ideas throughout all of price action and i also
noticed that by blending some of the things like price delivery and double tops
like we see here these two highs here in close proximity to one
02:21
another price has already shown a willingness to want to go lower and inside
this consolidation let's take a look at the liquidity pools and ranges above and
below well above here we have this range here okay and what i'm noting here
is this candle is opening 77.42 and this candle is high coming in at 77 even
big figure so there's our range in here now what i've delineated on the chart is
the open at which price was enough candle beginning and another up candle
here and then everything below this candle here is all cell side
03:23
delivery so there is a gap or liquidity void in this range here down here we
have a fair value gap right in here these candles here this candle here so we
have that and we have the body of the candle of this down candle which is the
bullet shoulder block which is right before this big move up the last down
candle we're going to focus primarily on the open on that candle okay so we
have mapped out both sides of markets liquidity and we can now build ideas
about what we would reasonably expect to see price do now
04:29
the retail universe is going to see this as double top so therefore there's
resistance let's get short and put a protective buy stop above these highs and
they're gonna be looking for the market to trade down into this low because
support resistance says this is where support bounced so therefore price
should reach all the way down to that level institutionally what we would be
thinking is price definitely has buy stops above here so traders that are
already short back here we want them to drop their protective
05:06
buy stops down here so we're gonna wait for price to drop lower close in this
fair value gap and potentially hit this order block level down here if price drops
down to that level we could reasonably expect price to go back up and clear
out these buy stops or the market could come up trade into this void close it in
and then trade lower to close this fair value gap or hit this bullish order block
to close the trade here are the two scenarios as it is the market starts to break
down so we know they're going to be looking
05:50
for this side of the liquidity first so that means they're going to drop into this
area here in this fair bay gap or a little shorter block and then we'll expect to
see the equal highs or double top to be blown out and to reach up into this
area here but at this point here we also notice that we have a range in here
and we also have the liquidity void up here and the fair value gap below so
we're looking for the market to trade down hits the bullish order block shows
willingness to want to rally double top is now gone
06:33

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those buy stops are gone we're looking for the void closing up here so now
we're going to take our level put it right on that candles opening right there the
price trades up hits it to the pip the high comes in at 77.42 to open on this
candle comes in at 77.42 double top buy stop liquidity run up into a liquidity
void to a bearish order block which is the last two up candles it goes right to
the liquidity void being closed in buy stops ran out above a double top then
the market makes a run with liquidity below that low.

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double tops and bottoms okay here we have a double top price has traded
down into a little shoulder block which is last down candle right for the up
move this would be a nice buying opportunity here so what would you be
reaching for what liquidity well retail is going to see this as resistance so in the
minds of the retail universe they see this as resistance here because price hit
this here and traded lower buy stops are above that now short traders have
their protective buy
08:08
stop above this equal high or double top and you know there's gonna be
biceps above this high but nonetheless we're focusing on double tops and
bottoms for this teaching we have a bullsh order block here we could be a
buyer here price will be reaching for and through this now the question is how
much beyond that we have our double top again and you're going to measure
the high down to the low between the two peaks okay so we have the high
down to the low we can project that up here and now while retail thinks this is
09:02
where it's going to go the algorithm is going to reach this far up because it's
going to remember the range back here so we're looking for 74.45 market
rallies trades through here right in here there's probably some kind of
momentum divergence and just for completeness sake in this month's
teaching let's put a momentum indicator up and there's some diversions right
there at a level of old resistance at a double top retail is going to think this is a
cell and you're going to look for price to
09:52
come back down to this support level that's what retail is thinking we're
thinking it's going up to 74.45 the double top is here buy stops are above that
and we're going to take the measurement that the algorithm is going to use
and project that above to get its objective the high comes in at 7446 off by one
pip and there you go you have a market move right to a specific price level
running to double top out and then there's your move as a subsequent down
move running out the liquidity below these lows
10:35
and now we're going to look at the double bottom trader's going to see this as
support price rallying away cell stops will build up below here use the high

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down into the low there's our range and we're going to project that down right
there and what that'll do is that'll give us our algorithm objective where price
will look to expand and seek downside liquidity and there you go and the
subsequent price reaction after that right back up to the double top reference
point so it's exactly on both price points here
11:31
and here the tip off is is when you're looking for double bottoms and double
tops the algorithm is going to know those reference points even if time has
passed it knows how to find these reference points by consolidation then it
takes those projections and moves it above and below and expands down
and above that far and that's why you get these spike reversals on both sides
of the marketplace and why you get the reactions as a consequence so when
you're looking at double tops and bottoms while they may take time to
eventually get
12:10
through and trade through them we never trust double bottoms and double
tops because we understand that the market makers and the interbank
algorithm will go through these old highs and old lows seeking liquidity below
them in the form of cell stops above them in the form of buy stops extreme
ends of the range is where high probability trading is in the middle of the
range where there's low probability when we use double tops and double
bottoms we're framing the extremes of the current trading range every time
you look at your charts going
12:49
forward you want to be highlighting these double tops and bottom areas
because they're going to give you specific laser guided precision levels at
which price will drive through above for the buy stops and below for the cell
stops you can see on an hourly chart it gives us a lot more framework instead
of using like a 15 minute time frame for intraday trading where usually it's a 10
and 20 pip run on stock usually we expect a 20 pip 10 to 20 pip range run
above and on high or 10 to 20 pip run below and oh low for
13:24
stop runs when we're using higher time frame charts like the hourly chart you
can't use a 10 20 pip grade you have to use other ideas and the algorithm will
reach for these reference points based on the double toss and double
bottoms and you can see that the ranges in this case it's 48 pips so it's
moving that far based on the movement inside of the double bottom or inside
the consolidation and then here it's moving based on this move here inside
the consolidation before the double top is right now
14:01
notice the double top formed here and we had a reference point of this level
based on these double top highs and the range projection inside of it price
traded all this time until eventually over here it worked it out so that's why i
taught in september what you should be focusing on look for levels that are
clean like this you may not have a trade today with that information but it will
give you insights at a later time when we start to run through it or once we
have run through that level then we can understand where it's going to reach
for
14:36

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in a contrary in view if they've taken the buy stops already what side of the
marketplace is going to reach for now the cell stops you can see that
happening here go through your charts and i'm sure you'll be amazed at how
many times you see this phenomenon take place and it's on all time frames so
don't think just in a 15 minute or five minute basis or an alley look across all
the time frames.

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