06-ICT Mentorship Core Content - Month 1 - Fair Valuation

Last modified by Drunk Monkey on 2022-08-26 17:19
1 00:00:39,420 --> 00:00:50,670 ICT: Welcome back, folks, this is ICT with a sixth installment of the eight teachings of September 2016, ICT mentorship, where we specifically dealing with
2 00:00:50,790 --> 00:01:04,320 fair valuation in this teaching, and fair valuation comes in the form of two perspectives. Fair value in regards to equal distance of a higher low, or what
3 00:01:04,320 --> 00:01:16,290 we would call equilibrium, or fair value for the perspective on valuation as regards to market makers. I'm gonna cut mind both of them to give you the
4 00:01:16,290 --> 00:01:26,670 perspective that you have to have when you look at price. This is actually a chart that we mapped out in advance talking about a lot of these very specific
5 00:01:26,670 --> 00:01:41,790 things here in the week, to have this tutorial is production, September 24 2016. We called australian dollar higher based on the things that I'm going to cover
6 00:01:41,790 --> 00:01:54,150 here, and I was aiming for 7665 as a weekly objective. And you can clearly see here, the market did in fact, hit that what led to these ideas behind me giving
7 00:01:54,150 --> 00:02:04,680 these upside objectives from an area down here? Well, first, you have to understand there's a lot of overlap from what we just covered in the previous
8 00:02:04,680 --> 00:02:12,090 two sessions that being equilibrium to discount and equilibrium to premium. Obviously, if you're a buyer, if you want to be buying you want to be looking at
9 00:02:12,090 --> 00:02:22,920 a discount market, that means trading in a lower third of the current trading range that the market is presently are currently created. And its most recent
10 00:02:22,950 --> 00:02:37,320 impulse leg or impulse price swing, the cells are best taken in the most current trading range, or impulse price swing, upper third portion of that range. Okay,
11 00:02:37,320 --> 00:02:50,130 that's a premium market we're selling at a premium. When the market returns back to an area of fair value, that is a fair value for the market maker to either
12 00:02:50,130 --> 00:03:03,930 sell or buy. In this case, we're going to cover again both concepts in regards to equilibrium and the fair valuation for market maker participation in price
13 00:03:03,930 --> 00:03:18,360 action. This swing here is making this high here the market broke down and it quickly ran away. And this is what we call a liquidity void for the market makes
14 00:03:18,360 --> 00:03:28,890 it a sudden movement lower and large ranges, very little wicks very quick movement that is a void that means the price spent very little time trading at
15 00:03:28,890 --> 00:03:36,810 these price levels and it was in a hurry to get down to this area here where it started trading more efficiently back and forth on both sides of the candle and
16 00:03:36,810 --> 00:03:49,290 ultimately having retracement this range in here. Soon as we see pockets of price action where there's sudden movement lower. Just like we saw a quick
17 00:03:49,290 --> 00:04:02,400 sudden movement lower here this up candle at the bottom of that that's where we start watching and measuring fair value and the down candle here very next
18 00:04:02,400 --> 00:04:12,240 candle is up candles. So we start looking at the range between this up candle in this up candle between those two up candles there's what's referred to as a fair
19 00:04:12,270 --> 00:04:25,020 value gap. Okay, a fair value gap. The reason why this is important is because there was no up candle or up movement between the break of that low and the high
20 00:04:25,050 --> 00:04:35,280 of this candle here. It was all just straight down movement. So nothing filled in this area. Once price broke this low it left it open. Basically it's like a
21 00:04:35,280 --> 00:04:46,830 gap. The same thing occurs here when this up candle is broken here on this candle once it started breaking lower, there's a gap between this candles low in
22 00:04:46,830 --> 00:04:59,130 this candle body or WIC okay so I defined it by the body I like to use those the range in which it causes this void
23 00:04:59,730 --> 00:05:08,520 okay When price is below that, this is going to be fair value. Okay, and Mark is gonna want to come back to that, because there was very little trading in there,
24 00:05:08,520 --> 00:05:18,090 just like we said there was a gap. Because there was no movement up in this area here between this up candles low and this up candles high, this area in price
25 00:05:18,090 --> 00:05:30,180 action, only saw down movement didn't have any up candle movement, only down movement. All this down here is down candle price action only big ranges. So
26 00:05:30,180 --> 00:05:40,890 this is a liquidity void, the fact that it creates it in big ranges and speed. That's what defines it. Now, because price moves so quickly in these areas, fair
27 00:05:40,890 --> 00:05:49,170 value is established, because there's going to be a willingness to want to see price trade back up into these levels in here in closing all this. In other
28 00:05:49,170 --> 00:05:55,530 words, there's gonna be up movement later on, it won't happen immediately. Always, sometimes it takes a little bit of time, sometimes, depending on the
29 00:05:55,530 --> 00:06:02,820 timeframe you're looking at and may take a great deal of time. But when price starts to move higher, we know that it will try to trade into this range here
30 00:06:03,150 --> 00:06:18,000 and fill that in in a later time. That is where market makers view fair value. Now, equilibrium, or fair value in regards to equal distance range between high
31 00:06:18,000 --> 00:06:30,060 and low of a defined high and low range. That being if we have this low here, and this high here if we define that with Finn.
32 00:06:38,279 --> 00:06:51,779 Okay, we have equilibrium right here, or 50% of that range from this high. This high to this low. There's equilibrium. Okay, look at the bodies of the candles
33 00:06:51,779 --> 00:07:01,109 stay above that. But we have a lot of work around that equilibrium price point. That in that in itself is significant, because it's showing you to the market
34 00:07:01,139 --> 00:07:12,059 ran through a short term high. Once it ran through it, it came back down, right back to the middle of the range or fair value, which is equilibrium. At this
35 00:07:12,059 --> 00:07:20,489 moment price could stay in this consolidation for a period of time of any length, we don't know how long prices are gonna stay in a consolidation. But at
36 00:07:20,489 --> 00:07:29,789 equilibrium, you need to refer to where the most recent price swing took place. In other words, if we're at equilibrium here, or at fair value, the market can
37 00:07:29,789 --> 00:07:38,219 go either way, at this price level, the easiest way to determine where it's most probable direction is is where did market structure break? Most recently? Did it
38 00:07:38,219 --> 00:07:47,039 break a swing high? Or did it break a swing low most recently? Well, there's no swing low in here of any significance. But there's a swing high up here that it
39 00:07:47,039 --> 00:07:57,509 broke through here. So when we made this low price ran through it, clearly not these highs right on this up candle price come back down into equilibrium, do we
40 00:07:57,509 --> 00:08:04,589 to find the range from here to here, as you're looking at price, you always want to get a feel for where you're at. And with regard to the most current trading
41 00:08:04,589 --> 00:08:18,719 range. Also notice that we are in the lower portion of the range defined by this high in this low. So we're in a real low area where it would be deemed over
42 00:08:19,199 --> 00:08:33,599 sold. So we have a range concept blending with the fact that we're moving back in the middle of a smaller consolidated trading range. With a market structure
43 00:08:33,599 --> 00:08:42,959 break of recent high in here broke to high and it came back to equilibrium. So the highest probability in terms of direction is going to be going short or
44 00:08:42,959 --> 00:08:54,659 going long. Or obviously it's going to be going long. But the mechanics behind it was that the fact that we broke this swing high, we have this void in here.
45 00:08:55,289 --> 00:09:02,759 Okay, we had weakness in the dollar, which we're not going to talk too much about correlation between dollar based analysis Berlin specifically dealing with
46 00:09:02,759 --> 00:09:13,649 price action along here. But what led to this bullish move and an Aussie dollar this week was the fact that we move back into fair value or equilibrium. So that
47 00:09:13,649 --> 00:09:27,869 way, it's fair value for the market makers to build in long positions or build a net long book. That means they're building accumulating long positions. The down
48 00:09:27,869 --> 00:09:35,219 candle right before this move up through a short term high that is a bullish order block. So price comes down into that hits it at the same time it's hitting
49 00:09:35,219 --> 00:09:45,269 it equilibrium, and it's deemed fair value, its fair value because the market traded back down into an area where it wants to be bought again and where it
50 00:09:45,269 --> 00:09:53,099 should be expected to see buying pressure come in. We don't want to buy it up here because we've already booked a swing high. What are we doing up there? We
51 00:09:53,099 --> 00:10:00,209 will be we will be buying at a premium. That's not what you want to do. So you got to blend a couple of things when you're looking for high probability Your
52 00:10:00,269 --> 00:10:12,329 setups to get fair valuation, you're gonna be looking at the current range from high to low in this area right here, we're in the lower end of that range. So we
53 00:10:12,329 --> 00:10:21,359 have a lot more upside to build in a premium, like we just discussed in the previous tutorial, okay, the market will go to a premium, okay, the markets
54 00:10:21,419 --> 00:10:32,879 buying at a discount, okay? And it's at equilibrium, is it fair valuation, because we're in the low end of the range from this high to this low. And we
55 00:10:32,879 --> 00:10:40,469 have all of this open price action right in here. So the markets, we want to go on to want to come up and close that in, it doesn't have to come all the way
56 00:10:40,469 --> 00:10:51,149 back up to this candles low, which is a bearish order block this up candle right for the down move. All this is needed to give us a directional bias. We have a
57 00:10:51,149 --> 00:11:01,439 swing high here where we know what's going to be resting above that by stops. So we know that there is a strong likelihood that because we're in the low end of
58 00:11:01,439 --> 00:11:10,169 the total range, which is this low, to this high. So this is the parent price on this high to this low, we create a short term low that was higher, we broke
59 00:11:10,169 --> 00:11:22,799 through a swing high, came back down into equal distance of the high to the low as equilibrium. We are now at fair valuation, for what for longs to market
60 00:11:22,799 --> 00:11:32,009 makers can build a net long book at this price level. Now, if they're going to do that, they're going to look for fair value above the marketplace where they
61 00:11:32,009 --> 00:11:38,459 can do what sell their positions at a fair value for them. Up here,
62 00:11:38,490 --> 00:11:49,170 if traders are buying this chasing price, are they buying at a fair value? No to buying at a premium. Remember that we just discussed in regards to equal
63 00:11:49,350 --> 00:12:02,520 equilibrium to premium. The range from this high to this low. We're above 50% level. And here, we're in that upper portion of the optimal trade entry or 60 to
64 00:12:02,580 --> 00:12:21,120 79 cent tracing level. I'll show you what that looks like. The low to the high 79% retracement level 70.5 62 cemeteries and level two the market goes way up
65 00:12:21,120 --> 00:12:35,490 into 79% retracement. So we're in premium here. We're we're below equilibrium here. So we're at a discount down here, relative to the range. Down here we're
66 00:12:35,490 --> 00:12:51,420 at discount. Okay, in terms of looking at the, the low to high, this is where the premiums built in, if we reverse it and look at the range and opposite
67 00:12:51,840 --> 00:13:05,880 terms, defining it from low to high. We're below the seven times seven treatment level. So we're really at a deep discount, really, really deep discount because
68 00:13:05,880 --> 00:13:17,400 we're below equilibrium relative to the range high and the low, or even below the 79 cent treatment level here. So in terms of really being suppressed, in
69 00:13:17,400 --> 00:13:27,600 terms of the total range, high to low, we are at a deep discount in the middle of a current small little trading range from this high to this low. So we're at
70 00:13:27,600 --> 00:13:42,840 equal distance, price measurement of high, middle, low and to total end or lower 1/3 of the range of the parent price swing that we see here. Right in here,
71 00:13:43,050 --> 00:13:55,080 okay. Even if you didn't see this high to low as the parent price swing, this price swing high to low still gives you the same context, it's in a slightly
72 00:13:55,110 --> 00:14:10,200 smaller scale. So you have high to low, we're going to lower 1/3 here. And we're in deep discount. Here's equal distance for equilibrium. We're below so our
73 00:14:10,200 --> 00:14:20,640 discount. So fair valuation for the market makers to build the book long would be so many overlapping factors there. They could be building long positions or
74 00:14:20,640 --> 00:14:31,470 accumulating long positions here. Looking for what liquidity above marketplace that means were above these highs that initially sold off of. Then you have the
75 00:14:31,470 --> 00:14:41,160 buy stuffs about here. So the market runs through that takes their stops, runs through this short term high here and then what does it do goes into
76 00:14:41,160 --> 00:14:50,880 consolidation. Now if it's a turtle soup and it wants to go lower after blowing out by stops, it should go lower quickly. It doesn't do that. It's staying in a
77 00:14:50,880 --> 00:14:59,550 sideways consolidation and in fact, during this week, actually gave live sessions explaining how this market was point pointing to higher prices. It went
78 00:14:59,550 --> 00:15:11,400 back in into consolidation, which means is going back into what? It's building equilibrium. Okay, so equilibrium is building again in that small little range.
79 00:15:12,930 --> 00:15:23,790 So you define the high and the low right there. And look how much the price axis spends around the middle point at equilibrium price point. Okay, so it's hanging
80 00:15:23,790 --> 00:15:36,660 around fair value. Okay, one spike move lower, doesn't see price go lower any in any significant doesn't break the range, and it expands to the upside. Once it
81 00:15:36,660 --> 00:15:48,840 expands to the upside, it starts filling in all of this. Again, this is another area of fair value, the markets fair for those long positions for the market
82 00:15:48,840 --> 00:15:57,690 maker that have already accumulated long so on, it's good, this is a good area in this shaded area, extend this out in the time we're here
83 00:16:02,580 --> 00:16:10,830 all of this is a good place for them to sell the long's that they started a Chilean down here. Look how much time they went back and forth in that range,
84 00:16:10,830 --> 00:16:18,300 all these wicks, okay, the cylinder cell in the cell and all the positions they have accumulate here, accumulated here and down here on the initial run down
85 00:16:18,300 --> 00:16:26,010 into the support. Once this range is closed in the next area of concern is above this short term high.
86 00:16:32,490 --> 00:16:41,430 So how are void filled in right here, it's filled in so this is no longer an area of interest. Now, no more now we still look for higher prices, why would we
87 00:16:41,430 --> 00:16:49,620 still look for higher prices? Because they went long here. Okay. So if they're gonna look to sell their position, where would they look to sell their positions
88 00:16:49,620 --> 00:17:02,010 at discount prices are premium premium. But the premium price that speculators would trade at by buying and chasing price, it's a premium to price chasers,
89 00:17:02,580 --> 00:17:14,820 people that feed off the desire of being a price move, it's already been moving higher. It's fair value to the market maker to liquidate their positions at this
90 00:17:14,820 --> 00:17:28,740 small little pocket between this lows is up candles low and this up candles high. So we can now create a new, specific area of fair value for the market
91 00:17:28,740 --> 00:17:42,840 maker to liquidate their long positions in here, right in here. To draw that out in time that you see here, price coming right into the bottom of that candle,
92 00:17:42,870 --> 00:17:52,650 it's perfectly to the pit by that candle or still deep inside the shaded area for Fair, fair valuation. What makes it fair is because they bought it at a deep
93 00:17:52,650 --> 00:18:02,610 discount. And they're liquidating at a premium. It's fair for them the Achillea here and it's fair for them to liquidate. See market makers have to deal in
94 00:18:02,610 --> 00:18:12,450 terms of valuation for their Long's and their shorts. And they have to do that same valuation for their exits on both sides of the marketplace. So when we see
95 00:18:12,450 --> 00:18:21,840 inefficiency in price, like we see here with these candles, only going down no up movement, only going down here no moving until you're on all of this area
96 00:18:21,840 --> 00:18:34,320 just scaling out their positions that they accumulate down here, here and here. When price moves in defined trading ranges, there's going to be equilibrium
97 00:18:35,070 --> 00:18:47,130 equilibrium is in itself fair value. That means the market makers are holding in a consolidation when that consolidation gives way. The strongest move out of
98 00:18:47,130 --> 00:18:56,460 that consolidation on alarm on a hard timeframe chart will give you a great deal of prognostication for directional bias. So what I mean by that is if we look at
99 00:18:56,460 --> 00:19:06,690 price and we take a look at it like this we can look at price like
100 00:19:14,490 --> 00:19:27,510 from this high down to this low to have a range defined there, okay? The markets in this range here consolidates it goes right back to equilibrium hangs around
101 00:19:27,510 --> 00:19:36,810 equilibrium dips down below equilibrium. So even if we're monitoring this range from this high to this low, we're below the equilibrium price point. So are we
102 00:19:36,810 --> 00:19:46,650 at a premium rate here or are we at a discount we're at a discount traders on a retail level they're gonna see this as a selling point they're gonna want to get
103 00:19:46,650 --> 00:19:54,750 short because they're going to see this high to this low coming up to 62% retracement level and remember I said in the last two sessions is not enough
104 00:19:54,750 --> 00:20:01,110 this look simply looking at Fibonacci, you can get tripped up if they're not if you don't understand what price is actually telling you So getting short here is
105 00:20:01,110 --> 00:20:08,160 not what you want to do. Even though you've seen price movement going lower, it's only coming down to an area of fair value for the market makers to
106 00:20:08,160 --> 00:20:18,870 accumulate Long's in an area of discount. So you're having an overlap of three things, you're looking at total range, from this high, to this low or this high
107 00:20:18,870 --> 00:20:29,790 to this low, we're in a lower portion, or 1/3 of the range. So we're in high probability for a discount market to be in effect. You're also below the ICO
108 00:20:30,930 --> 00:20:41,400 price point, or equilibrium between the low to this high. So it's consolidating your debt, but now went below it again. So we are in an area where the market
109 00:20:41,400 --> 00:20:49,620 makers can buy especially if you combine that with areas of institutional order flow. So if you're looking to buy, what would you be looking for an area to run
110 00:20:49,620 --> 00:20:56,880 out below the stops? In other words, sell stocks below and oh, well, we don't see so much of that happening here. It doesn't need to do that it's only
111 00:20:56,880 --> 00:21:05,310 returning down to this down candle, which is a bullish order block a down candle before the market moves higher. That's where markets support really realize,
112 00:21:06,120 --> 00:21:14,850 we're not really like resides in Okay, up candles breeding for the market drops down that up candle is exactly where resistance is an institutional basis. So
113 00:21:14,850 --> 00:21:25,020 that's where selling occurs. So when we see price action like this, we can define things in terms of fair value in relationship to how the market maker is
114 00:21:25,020 --> 00:21:35,940 going to perceive price, the way they value price in terms of the current range that it's trading in the same way the algo delivers price, where are we at in
115 00:21:35,940 --> 00:21:46,140 proximity to the current total range, we have a nice impulsive price swing high to low, here, we are in the lower portion of that range here. We have built in
116 00:21:46,170 --> 00:21:55,890 buy stops above this high above this high here above this high here and we have a valuation gap. Okay, if your value gap, Mark is going to want to come back up
117 00:21:55,890 --> 00:22:05,220 there because it's spent very little time. In this area, it was all down movement all down movement. No, no buying was actually occurring in here. No
118 00:22:05,220 --> 00:22:14,670 bind was occurring in here is all on the sell side one way flows. So the market ran up into just the clothes in were only selling took place in new row buyers.
119 00:22:15,570 --> 00:22:25,080 So now when price comes back up to that level, and they shoot it up like that, that's going to make a run on stop the boat swing high. And we're going to close
120 00:22:25,080 --> 00:22:33,780 in the range between this up candle and this candle here, which is a fair value gap. So when we're looking at price action, it's a couple things you need to
121 00:22:33,780 --> 00:22:43,920 keep in consideration. The total range of trading in the equilibrium price point relative to the most recent trading range high and low. And we defined several
122 00:22:43,920 --> 00:22:55,080 of them here, we did this high to this low, with this high in this low and this high in this low. So we have multiple things lining up with the fact that for
123 00:22:55,080 --> 00:23:03,810 fair value sake, the market has a deep discount here. And it's most likely going to trade higher. And we have reference points that we can look for where the
124 00:23:03,810 --> 00:23:12,960 market makers should aim. But ultimately, this is the fair value gap that they wanted to get back up into. And the reason why the basis was me calling 7665 for
125 00:23:12,960 --> 00:23:21,060 the week was I want to get just below where I ultimately think it's going to go and the level at which if we look at the high
126 00:23:24,330 --> 00:23:32,280 the low comes in at 7675. And I want to be about 10 pips or so before the actual level I think is actually going to be hit. I want to be getting out of this a
127 00:23:32,280 --> 00:23:41,640 little bit before that. And one more instance of the things I've talked about before it happens in the charts, and why those things actually materialized in
128 00:23:41,640 --> 00:23:51,450 price action to price returns back to fair value, fair value in the perspective of the market maker, not fair value in the scope of buying this is at a premium.
129 00:23:51,900 --> 00:24:00,780 Okay, remember that market efficiency paradigm I started you all with how you proceed the marketplace is not how retail is gonna see price, they're gonna see
130 00:24:00,780 --> 00:24:10,080 this as the market is going to probably keep going up because it's been going up. Well, this is an area of distribution. You want to be thinking accumulation
131 00:24:10,080 --> 00:24:19,980 down here, re accumulation, distribution, scaling out all through these areas in here. Because you don't know if it's only gonna come up a little bit of that,
132 00:24:20,040 --> 00:24:26,970 that range or hearing the shaded liquidity boy, you don't know if it's going to fill in that and then go lower. So, when you buy things now in here a deep
133 00:24:26,970 --> 00:24:38,370 discount, you have to scale some of it out. But the beginning basis points of valuation, in terms of the market makers, you have to look at the total range.
134 00:24:38,880 --> 00:24:50,940 Look at where the market has moved away from quickly and those areas of liquidity voids and liquidity pools above old highs here and here. And here.
135 00:24:51,390 --> 00:25:00,750 There's that is going to be fair value for the market maker to distribute long positions. If we were looking at a sell position or short position We will be
136 00:25:00,750 --> 00:25:10,590 looking for areas in which the market in the past has moved up a great deal with speed. And we will be looking for lows, where stops will be building up below it
137 00:25:10,650 --> 00:25:23,880 or liquidity pools in the form of sell stops, we would look for the lower end of the most recent range for valuation. So that way, you would know by looking at
138 00:25:23,880 --> 00:25:32,340 things with that market efficiency paradigm, you're not looking at things like retail, you're looking at it in the scope of okay, I'm the bank, I'm making a
139 00:25:32,340 --> 00:25:44,190 book here, where's the most efficient price levels for me to unload my lungs or unload my short positions? We've already mentioned it so far in the teaching
140 00:25:44,190 --> 00:25:54,090 just for September. The easiest way to understand institutional order flow from the beginning starting point well is understanding that markets move from buy
141 00:25:54,090 --> 00:26:04,620 stops and sell stops and sell stops to buy stops. And it moves from fair value, to discount to discount to premium to premium to fair value, it moves back and
142 00:26:04,620 --> 00:26:14,370 forth between these three reference points. Are we at a discount? Are we at a premium? Are we at fair value. All those things combined together, they give you
143 00:26:14,370 --> 00:26:24,450 the clues as to what we're seeing in terms of the market makers accent, or the accumulating, or the manipulating or distributing all these factors, we're going
144 00:26:24,450 --> 00:26:35,460 to be bringing those closely knit ideas into a more easily understood premise. When we look at price, we'll be able to see these things unfolding in in
145 00:26:35,460 --> 00:26:43,440 advance, and you'll be able to see what should take place and it's very encouraging to see your study. And these individual components start to flesh
146 00:26:43,440 --> 00:26:56,400 out and have a greater understanding about price action. So in closing, fair value is not fair value in the realm of retail, it's in the realm of fair value
147 00:26:56,760 --> 00:27:09,180 of liquidating or accumulating. From the market makers perspective. Fair value in discount is fair value for buys. From market maker buying fair value in
148 00:27:09,180 --> 00:27:22,890 premium is fair value for market makers selling either establishing new shorts, or exiting on scaling out long positions. Discount below equilibrium in the
149 00:27:22,890 --> 00:27:30,390 lower end of the range. That's a discount market. That's an area at which the market makers can buy or look to cover their short positions.
150 00:27:31,799 --> 00:27:43,019 Do not look at the marketplace. In this retail mindset that we're all trained to do, we had the same well we drink from, it's the same regurgitated stuff. But
151 00:27:43,019 --> 00:27:53,009 it's wrong to understand how these markets are delivered to us in the form of price action. When this price is delivered to us. It's not random. It's very
152 00:27:53,009 --> 00:28:01,199 specific of where it wants to go, why it wants to get there. That's what we're that's what we're giving you in this mentorship. It's very specific, detailed
153 00:28:01,229 --> 00:28:09,269 perspectives that are generic, they repeat themselves over and over again. And because they repeat themselves, because they're the same phenomenon take place
154 00:28:09,299 --> 00:28:18,779 almost on a daily basis. There's nothing for you to fear. If you mess it up and you don't get the trade to pan out right or if you miss a move, do not worry
155 00:28:18,779 --> 00:28:28,709 about it wait for the market to give you indications of where fair valuation is, then you'll be able to anticipate the market makers next scale in or scale out.
156 00:28:29,429 --> 00:28:39,059 It may be the liquidation of a long position that's been underway. That may give you prognostication for a future move. It may be the the inception of a new
157 00:28:39,119 --> 00:28:48,059 price leg while you're waiting for this area to be retreated to. We'll build on this idea for now. But I want you to think in terms of where are we at relative
158 00:28:48,059 --> 00:28:58,079 to the most current range? Are we in the lower end? Are we near the low of that current range? And are we working around in equal distance, equilibrium price
159 00:28:58,079 --> 00:29:07,889 point between recent high and low? By defining price and current trading ranges like this, you'll be able to see where the market makers will expand the price.
160 00:29:08,219 --> 00:29:17,129 So when there's expansion, you know, prior that expansion, there's been what it's consolidation. So as you study more examples of when markets are in
161 00:29:17,129 --> 00:29:27,119 consolidation, you'll be able to forecast the next movement out of the consolidation. We don't we don't play the breakout game. We anticipate the
162 00:29:27,119 --> 00:29:35,879 breakout, we know that the indications through price action will give us clues as to what side of the marketplace is going to break out. And when we get into
163 00:29:35,879 --> 00:29:43,649 commodities will have actually great advantage of that we are using open interest but for forex, you don't need it so much. You can still see it in
164 00:29:43,649 --> 00:29:54,419 institutional order flow. So I'm going to close this teaching here with the promise that we're going to come back at the end of this series of eight
165 00:29:54,419 --> 00:30:08,039 sessions in your notes that will accompany your months some Right, you'll have great detail of specific notes and things that you need to be aware of as it
166 00:30:08,039 --> 00:30:18,659 relates to fair valuation, liquidity pools, voids, liquidity gaps, all those things, we'll be building more foundation on that in a month to waxy Guilin to
167 00:30:18,659 --> 00:30:27,809 help define these things, not just giving you one charts perspective, and basically, trying to teach the whole thing on one, one chart, it can't be done.
168 00:30:27,929 --> 00:30:39,479 So you need examples of it, you need to see it called for in advance, like we did this week, not so much. Why in great detail, but I gave you the areas of
169 00:30:39,479 --> 00:30:48,599 watch price should reach for, we talked about the area here, we talked about this void here. And obviously, we only need to talk about the highs because we
170 00:30:48,599 --> 00:30:58,169 understand that that's where the bias stops gonna reside. So think in terms of fair value for the market maker, if they're going to go higher, where's it a
171 00:30:58,229 --> 00:31:07,049 fair value for them to exit their lungs? Okay, it's fair, it's a fair value for them to do. So. They do not want to liquidate your lungs at a discount, or one
172 00:31:07,049 --> 00:31:15,659 retracements going lower, you look for expansions on the upside, when they expand, when price expands, they should be reaching into an area of fair value
173 00:31:15,659 --> 00:31:24,689 for price to be liquidating Smart Money lungs, that's the only reason why markets go up. That's the only reason why price is allowed to be delivered at
174 00:31:24,689 --> 00:31:34,799 higher prices. Because the market makers, the banks have books on on their books that are net long, and it's in their interest as the price higher, it doesn't
175 00:31:34,799 --> 00:31:43,889 matter how many of us by the price is going to be set by the bank. And they're going to do things to line their own pockets and not yours. So it takes a
176 00:31:43,889 --> 00:31:52,919 perspective shift. And it gets back to that market efficiency paradigm I started you with in this mentorship that you have to view things from the smart money's
177 00:31:52,919 --> 00:32:03,029 perspective, not what retail should be doing, or what retail is doing. If you do that, you're gonna you're gonna miss the actual clarity that comes through
178 00:32:03,029 --> 00:32:14,429 looking at price action, studying it through a contrary and prospective saying okay, this is what the retail minds should be thinking now. And by contrasting
179 00:32:14,429 --> 00:32:22,409 that with what you see in the charts for fair value, liquidity gaps, liquidity voids, liquidity pools, all these things the markets going to seek that
180 00:32:22,409 --> 00:32:30,719 liquidity and run against the less informed crowds opinion. So with that, I'm gonna close and wish you good luck and good trading.