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Module 4 - Ranges Liquidity Targets
Module 4 - Ranges Liquidity Targets
Module 4
Ranges, Liquidity, & Targets
@Mindset_BTC
Disclaimer
Please note that any trades shown in the following content are for educational purposes only;
Any risk taken in following trades or setups that are shown for educational purposes is entirely borne by you, with no assignment of
responsibility placed on me, MindsetBTC;
I am not a financial adviser, and as such, will not provide advice that could be construed as specific in nature. Rather, this advice is
intended to be general in nature as an education and entertainment resource;
I do not recommend the purchase of any trading pair, investment, ticker, or any other financial instrument that could appreciated or
depreciate, and as such, will not be held liable for users investments, good or bad;
Do not blindly follow trading calls by anyone. Instead, do your own research;
Past performance is not a guarantee of future results;
and;
This content is strictly provided for educational & entertainment purposes (in case I didn't mention this already)
Acknowledgement
I would like to acknowledge the people who have had a massive influence on me as a trader, some of whom I would call mentor, others who have inspired me
to take action against no one else other than myself in improving and learning everyday
The 2017/18 Market - you gave me the hunger to learn how to trade after getting my arse kicked by you!
Crypto Cred - your videos and educational content are what set me off down the rabbit hole of learning how to trade
Trader Mayne - after finding your Discord, and observing through your public streams and charts etc that we had a similar learning
experience with trading, I dusted off my 2017/18 trading wounds and got back into the saddle
Rektproof - a PA legend who truly inspired me to take action through his public content and approach to trading. Truly.
Emperer BTC - No thanks are enough. He gave me a 'voice' to share my passion of trading and eduction with you all, and am forever
grateful for this
Inner Circle Trader - the man is truly a legend who I learned many concepts from, many of which are shared in this educational series.
Many hundreds, if not thousands of hours spent digesting his material has helped me put this course together for you
The Goal of This Course
It's to explore, in depth, each individual relevant puzzle piece that are in my opinion critical in gaining a framework of understanding
with regard to Price Action trading, particularly, trading a range
Trade Management
Self Learning
Conclusion
Part 1
Ranges
What's in a Range?
The method I use to anchor the range is a Fibonacci Tool, with values set at 1, 0.5, and 0
When pulled, you will see that you sometimes need to tweak the range, but we'll take a look at this.
Range Tool Setup 1 of 2 2
1) First Select the 3rd item down on the left hand side
menu
Then select "Fib Retracement"
1
Range Tool Setup 2 of 2
Timeframe Structure
Market Structure
Combination of both
Combination Ranges
Combination Based Ranges 1 of 3
When we look at it, supply and demand are what makes up the market in it's entirety. Without someone selling at a level they feel is
acceptable, and without someone buying at a level they feel is acceptable, there simply would be no market.
If there is too much selling pressure / supply to overcome the buyers / demand, price continues to sell off until there is sufficient
demand from buyers who are willing to pay a price that they deem to be fair (at lower levels / cheaper price).
The same goes for buyers who outweigh sellers; if there is an imblalance to demand to the upside, it means that temporarily (as
nothing is permanent in the markets), that price will rise until there is enough pressure in the form of supply to drive price back
down (as there aren't enough buyers to outweight the amount of an item available)
This is the premise of supply and demand, where they both act as POSSIBLE FUTURE resistance and support zones.
Conversley though, support and resistance are ACTUAL levels that play out from previously possible levels of supply and demand
We can only project support and resistance out in future as they haven't occured yet. Future support and resistance, like the
overall markets, are assumptions until proven true
In viewing the below chart, we can see that there are some key supply and demand zones at range high and range low, with
much lower level supply and demand levels intra range.
Supply &
Demand
Example
Liquidity (My Interpretation)
The liquidity price seeks is what we are targeting with our trades as exit points, and is a simple concept; supply and demand levels are where potential
liquidity lies in the form of limit orders, only unlocked when market orders are executed (as there has to be a market buy or sell to fill a limit order)
When a stop loss level is hit, the triggered order becomes a market sell order, which unlocks the liquidity needed for a buyer to buy from a seller, or a
seller to sell to a buyer (at those particular levels)
In order to move the markets, larger players (whales, institutions etc) need to drive price up or down to unlock this liquidity at these levels iso they can sell
their longs, or buy their shorts (trade exits)
Conversley to the above though, these larger players etc also build positions by doing this; they drive price down or up to areas where they can unlock
enough liquidity to then fill their long or short orders, and the cycle keeps repeating
When we use the term liquidity hunt, sweep of lows / highs, or swing failure pattern, this is what we are referring to
Price will continue to seek these pockets of liquidity to the upside or downside, and will replicate, fractally from the 1min chart where scalpers reside, to the
15M, 1H where daytraders reside, to the 4H to 6H where swing traders participate, right up to the 1D chart and above for position traders.
The replicating nature of this cycle of liquidity to-ing and fro-ing is what defines the market
Liquidity
Example
Sellside Liquidity
Possible Targets
Possible Targets
With trading in general, there's no point in slapping the long or short tool on and then aiming for wherever the tool shows a 2R
or 3R based on where you place your stop loss
We need to be more logical and structured in this. As you can see from the course so far, there's no point in doing something
unless we take the time and effort to really work things out. This is the same for trading in my opinion.
So, we can identify some areas where we think that price will likely be attracted to, and hence, make great targets when
partially, or wholly closing a trade.
Market Structure Based, in the form of swing highs / lows & equal bottoms or tops
Fair Value Gaps
Volume Profile Tool based targets in the form of Naked Points of Control, or even
Market Structure Based
Market Structure Based (General)
We've already explored Volume Profile and Tools in the last Module (Module 3), where we learnt how to set these up, particularly on a
longer timeframe range, using the FRPV (see Module 3 refresher immediately below)
What we want to do now is understand how to use a couple of items from the Volume Profile tools to use as targets in the form of:
Value Area High & Value Area Low (VAH & VAL)
These areas that these highs and lows define is where 70% of volume was transacted in a given or fixed session
See below in the next slide where you can see an example of this playing out
Note how the VAH & VAL can potentially offer us some structure within a
range. It's always best to find multiple areas of confluence though, rather FRVP Confluence for a Range (price shown)
than using the VAH & VAL as entry or exit points
Points of Control
Points of Control (POC's) 1 of 2
Within a range, or to trade a range, there are four set ups that I feel work well:
Bullish trend continuation (just after range low, or recovery of mid range IF price shows strength)
Bearish trend continuation (just after range high, or recovery of mid range IF price shows weakness)
Based on the above, remember in Module 1, Market Structure & Fibs - we explored the premise of a MSB, and also a Trend Reversal
This was no mistake to introduce you to these concepts back then - the intent was to always bring these back into the spotlight once
you had a grasp on them, where we then study these in some detail now at the appropriate time
RaLEE
What's a course without a cheesy acronym that kind of aligns with some form of trading terminology?
Well, you're in luck! I want to introduce you to the concept that I kind of spitballed, called RaLEE to help you remember a process when
planning a trade or building a trading idea:
This has helped me out many a time when planning trades (as I'm an acronym nerd), but feel free to make your own. I just use this as
a mantra almost when trading this method to keep me aligned, disciplined and true to my approach
Reason being is that I've seen many trades fail when I've stepped out of this process. I find that the probability of my trades when
waiting for RaLEE to play out is greatly increased
RaLEE
Bullish Trend Reversal 2 of 11
RaLEE
Bullish Trend Reversal 3 of 11
RaLEE
Bullish Trend Reversal 4 of 11
RaLEE
Bullish Trend Reversal 5 of 11
RaLEE
Bullish Trend Reversal 6 of 11
Exit Plan (1 of 5)
RaLEE
Bullish Trend Reversal 7 of 11
Exit Plan (2 of 5)
RaLEE
Bullish Trend Reversal 8 of 11
Exit Plan (3 of 5)
RaLEE
Bullish Trend Reversal 9 of 11
Exit Plan (4 of 5)
RaLEE
Bullish Trend Reversal 10 of 11
Exit Plan (5 of 5)
VPSV
RaLEE
Bullish Trend Reversal 11 of 11
Trade Outcome
RaLEE
Bullish Trend Continuations
Bullish Trend Continuations
RaLEE
Bearish Trend Reversal 2 of 11
RaLEE
Bearish Trend Reversal 3 of 11
RaLEE
Bearish Trend Reversal 4 of 11
RaLEE
Bearish Trend Reversal 5 of 11
RaLEE
Bearish Trend Reversal 6 of 11
Exit Plan (1 of 5)
RaLEE
Bullish Trend Reversal 7 of 11
Exit Plan (2 of 5)
RaLEE
Bearish Trend Reversal 8 of 11
Exit Plan (3 of 5)
RaLEE
Bearish Trend Reversal 9 of 11
Exit Plan (4 of 5)
RaLEE
Bearish Trend Reversal 10 of 11
Exit Plan (5 of 5)
VPSV
RaLEE
Bearish Trend Reversal 11 of 11
Trade Outcome
RaLEE
Bearish Trend Continuations
Bearish Trend Continuations
If you're still with me after all of the above, thanks for sticking around!
I do though have one more little tip to help with trading a range, and I call it the Universal Approach
The reason for this name is that you can literally take all that we've learnt in the above, and tailor it to your advantage in whatever
timeframe you want, from scalping through to swing trading
From a logical perspective then, in a singular daily range, there are 1,440 minutes (we get this from 24 hrs in a day * 60
minutes in an hour);
If we prefer to manage our trades on the 15M chart, and we feel that there are a couple of opportunities based on this
timeframe each day, we can take the overall total minutes of the day and divide by 15 (the minute chart we prefer), to
determine an optimum selected range / timeframe managed ratio to trade on, which in this case we find:
So if we've now got an ideal ratio, and we like trading this technique, AND we know that price is fractal, then why don't we take
this one step further in the same ratio as a day trade, but tailored to scalping perhaps, or even swing trading?
The Universal Approach 4 of 6
Scalping:
So let's take a look at a scalp trade, using a Timeframe Base Fib (similar to our prev daily range), but let's do some maths first:
If we want to work from the 3min chart as a preferred scalping timeframe, and we know that our newly determined preferred
trade timeframe to range pulling ratio exists in the form of a factor of 96, then:
3 * 96 = 288 minutes, or 288/60 = 4.8 hours (but let's round this down to the 4H chart)
Therefore, based on what we've worked out in the previous slide, then if we were to use a range based approach where we pull
a fib range from the low of a previous candle to the high of it, then the ideal timeframe to establish this range from is the
rounded down 4H chart (as the 4.8H chart or 5H chart isn't commonly used, but certianly can be)
So you would pull a range from the previous 4H candle, low to high, and then execute scalping trades on the 3min
timeframe based on this approach
There is so much to absorb in this Module, that it will probably take a couple of readings to get through. But just keep at it, it will become
apparent soon enough
We'll cover this whole Module on Youtube, so we can walk through it together
As a recap, go and practice step by step per the order of this Module:
The Universal Approach (and protract the ratio forward where you can work out different timeframes for different trading styles)
Conclusion
Wow...and holy $hi*. I never, ever thought that I'd create a trading course, let alone a Module that is 91 pages in length.
I do truly want to thank everyone for their support, 13k audience members on Twitter now, 2.2k subs on Youtube, and 3.5k subs on Telegram too
It's truly a privilege to be able to share my learnings and approach with you all. Like I say, I'm no guru, god, or master - I'm learning everyday too
Let's keep at it together though, and if you did find this content of value, please feel free to share it on the socials.
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