Core Concept Definition
"when we're looking at a premium market and markets are trading near a premium and we have reasons to suspect that at lower future prices in order we don't know how much time it's going to be needed to get to that lower future price but we're looking for a displacement in price"
"and vice versa in this example we'll be focusing on a buying opportunity when a market went to a deep discount on a monthly weekly and daily time frame and how we would use that insight to get to a higher Premium Future price"
Premium & Discount Arrays
Discount Arrays (Long Entry Focus)
"our focuses down here where mitigation blocks bullish Breakers liquidity voids fair value gaps bullish order blocks rejection blocks and old lows or old Highs are our focal point for entries on Long positions"
Discount PD Arrays (Buy)
- Mitigation Blocks
- Bullish Breakers
- Liquidity Voids
- Fair Value Gaps
- Bullish Order Blocks
- Rejection Blocks
- Old Lows or Old Highs
Premium PD Arrays (Sell Target)
- Mitigation Block
- Breaker
- Liquidity Void
- Fair Value Gap
- Bearish Order Block
- Rejection Block
- Old High / Historic Low
Objective Hierarchy
"the idea is we're looking for something down in this list of arrays to Target one of the premium arrays"
"now obviously the first one we'll be reaching for is a mitigation block that would be a first objective then if there's a breaker of any kind we would aim for that and we'd have to weigh out whether or not there's a significant force that would drive it through a breaker"
"and then obviously looking for any range to be filled in for a liquidity void and aiming for fair value gaps in the premium range of the market and then we look at Value gaps bearish order blocks and then looking for a rejection block and or old high and old historic low"
Inverse (Bearish Example)
"we would be looking to sell short at a bearish PD array aiming to cover that short position with one of the bullish PD arrays mitigation block bullish breaker liquidity void fair value Gap bullish order block rejection block and or old low or historic High"
"so selling at a premium and buying back at a discount"
Equilibrium Concept
"when markets are at a premium or at a discount they're always going to initially look to rebalance that means the equilibrium price point between the last recent range"
Equilibrium Trading Expectations
"so even if it doesn't go all the way up to a deep premium or down to a deep discount you can always reasonably expect it to go back to equilibrium and if that's all you aim for if you if you buy it a real deep discount and just get back to equilibrium you'll find a lot of Trades like that"
"if you're a big premium in the marketplace you're at historic highs or a annual high or three month High you got a real good chance of seeing the market sell off back to some equilibrium price point of the most recent trading range"
Equilibrium Directional Bias
"when the market's at equilibrium can anticipate a market move down into a monthly discount aiming for one of the PD arrays as an objective"
"so basically at equilibrium you can look for either expansion on the outside or downside now you're going to be Consulting the market structure on the monthly chart to determine what side of the marketplace you're going to be looking for so it's not indiscriminately going in there rolling the dice"
Objective Framework
"we're looking for bullish PD arrays to buy into with the expectation of selling it at one of the monthly premium arrays"
Premium Range Recognition
"when markets are in premium again and if you're in equilibrium you're gonna be focusing on the market potentially moving up into one of these monthly PD arrays that possibly may be a shorting opportunity"
"you can get a premium here on this range this is a premium from this high down to the low"
"these highs in here down to that low is a premium but as you go through and deeper this is where the last last opportunity for the highest premium and unloading along from that down here in these discount area"
Time Frame Hierarchy
Critical Time Frame Relationship
"because you're trading off a long-term perspectives and higher time frame charts the retracements can go through what you see on the daily the daily isn't going to support a monthly retracement it just isn't going to do it sometimes this is going to give way it's going to break through it's going to pull all the way back to what you would otherwise not see unless you're looking at a monthly chart"
When Daily Levels Fail
"any bullish order block or any supportive role from a PD array on a daily chart if it is bullish but it fails to give you a Buy Signal or a support price the next level you drop back to is a weekly PD array so you're going to be looking for something bullish to support price on the weekly chart"
"if the weekly chart PD array has no support and it breaks then you'd get back to the monthly support"
Hierarchical Support Structure
"so if you lose a level on a daily don't be concerned just go out to a weekly chart and you'll see what they're reaching for if you can't find it on the weekly chart which is probably unlikely but if you can't go out to a monthly chart and you'll probably see much clearer where they're trying to push price"
Algorithm Priority
"the algorithm is going to work predominantly on a daily time frame but if the levels are already worked enough and already absorbed all of the potential liquidity because it's already been trading to them it will go out to that larger open float and that usually will dip you into the weekly ranges"
Chart Preparation
"you should always have in your platform the asset that your or the market you're Trading you should have these monthly weekly levels on regardless even if you're a day trader because it's going to surprise you how many times it has great impact or significant impact"
"position trading it's absolutely crucial you definitely need it here because it's going to frame what trades you're taking and it's going to provide you support structure in the form of support of resistance or natural support for price to find new buying and or new resistance to find new selling at"
Order Block Identification
Bullish Order Block (Monthly)
"these two Down Candles that is a bullish order block when you blend both of the bodies together because it's two consecutive Down Candles okay and that gives you your equilibrium price point in here"
Bearish Order Block (Weekly)
"we have an up candle right before the down move okay that's a bearish order block"
"this is going to be your bearish order block the opening on that candle"
Consecutive Down Candles Rule
"we have three consecutive Down Candles in here right in here okay the order block really begins at this candle's opening not this last one you can use that one but if you want to be ultra Ultra tight on your stops but you're really going to be using the opening on this candle because it's the highest open of the three consecutive candles"
Order Block Focus in Trends
"every time you look in an uptrend you want to focus on the Down Candles because that's where institutions are going to buy either they're buying at the time of the Down Candles creation which is usually always the case and then if it comes back to that same down candle at a later time they will they will buy more at that time"
Execution Framework
Rejection Block Pattern
"this candle comes in at November 2016 it went below the bodies of the candles in here that is going to be a rejection block it cleared out the bodies of the candle on a monthly chart rejected sent it higher"
Breaker Validation
"we also have this down candle which is a breaker why is this a breaker because we have an old high here old highs anyone that gets short they're going to put a buy stopper is resting right above that the market rallies above clears out those buy stops here and then trades down through it once this down candle is violated here it becomes a valid breaker"
Fair Value Gap
"we have a gap in here price has only been delivered on the downside between this candle's low and this candle's high it's been delivered down here as a gap so that would be one reasonable objective to look for when price was rallying"
Gap Absence Recognition
"the reason why I'm using the open on this candle not the wick is because there's an absence of a gap the reason why is because we have a wick here and the market traded down through here so this is two times this little area has been traded to and it was blocked in with this candle's high so this whole little area in here wouldn't be viewed as a gap or fair value Gap it's it's been closed in"
Institutional Footprint
"every time it's a down candle and then it's a subsequent up move you know that they bought and that's the footprint they moved the market by doing that and every time they do that it allows new scaling in for them and their positions are large and they can't get them all in one time"
Re-entry After Stop Out
"say you bought down here maybe you bought this low here as a old well and you bought it as cell stops being ran out okay great about it you start to see some money and all of a sudden this boom you get knocked out if you go and look at the weekly chart you can see that all that was in the return back to that Weekly order block and if it was starting to trade back up to this level here it could be a buyer again"
"because you know that they went down to the weekly order block and there's nothing to worry about dude all they did was recapitalize a longer term pdra and that's all it was this is a return back to a Polish or block on a weekly time frame"
Weekly Level Significance
"when you see the market movement to the weekly objectives or the levels that we identify with these PD arrays then you'll know that you're probably going to have a really significant price move because of the weekly level those large funds Banks and institutions they're all going to Dogpile on those levels because they're significant and they're long term and they're poised to make moves like this"
Study & Review
Click each card to reveal the answer (direct quotes from transcript)