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19-ICT Mentorship Core Content - Month 3 - Institutional Sponsorship

Last modified by Drunk Monkey on 2022-09-09 12:48
1 00:00:22,260 --> 00:00:32,430 ICT: Okay, folks, welcome back. And this is lesson three of month three. For the mentorship. We're gonna be dealing with specifically the institutional
2 00:00:32,430 --> 00:00:47,940 sponsorship, and how to identify it in setups. First, we'll read the institutional sponsorship in long setups. Pete identifying institutional
3 00:00:47,940 --> 00:00:58,320 sponsorship and long setups is the notation of a higher timeframe, price displacement, and that can come in the form of a reversal and expansion or
4 00:00:58,320 --> 00:01:11,550 return to fair value. intermediate term imbalance in price. Now, this is a move to discount or a sell side liquidity run. In other words, the price is going to
5 00:01:11,550 --> 00:01:26,670 actually retrace, or it can begin by going below an old low to run out the sell stops. Once one of these two occurrences appear in your chart, the next thing
6 00:01:26,670 --> 00:01:38,640 you'll be looking for is short term buy liquidity above the marketplace. Now, this is going to be ideal for pairing long exits to sell to. And obviously,
7 00:01:38,640 --> 00:01:49,530 you're gonna be looking specifically for a time of day influence, ie London Open for the low of the day or a New York session, low formation. Now, it's important
8 00:01:50,370 --> 00:02:01,200 understanding that number one, and number two are the criteria, what sets up the expectation for institutional sponsorship, then we see the actual institutional
9 00:02:01,200 --> 00:02:10,140 sponsors that come in, by way of attacking the marketplace for the buy side liquidity that will be resting above the marketplace. In other words, we have
10 00:02:10,140 --> 00:02:20,130 buy stops, typically above old highs when we're when we're short. The assumption is and again on a teach the role playing model that gives us the perspective of
11 00:02:20,130 --> 00:02:32,190 a market maker. So you have to have that market maker perspective on price. So we look to sell high, but we had to find buyers that are willing to buy higher
12 00:02:32,190 --> 00:02:41,670 from us. So the criteria is we have to look for short term buy liquidity above the marketplace. Now, it's going to be layered by stops throughout the
13 00:02:41,670 --> 00:02:52,470 marketplace. Because there's all kinds of trading that goes on it's long term swing trade, short term day trading, scalping. But you have to look at the
14 00:02:52,470 --> 00:03:03,960 higher timeframe for that short term, buy liquidity, to give us a framework to see if there is in fact institutional sponsorship in your setup. And obviously,
15 00:03:03,960 --> 00:03:11,910 you'll see these characteristics come to fruition by studying the time of day influence. Now, obviously, you're not just studying, eventually, you're gonna be
16 00:03:11,910 --> 00:03:24,480 actually trading in the marketplace at these specific times of the day long and open New York session London close in, sometimes Asia. And obviously, the
17 00:03:24,510 --> 00:03:33,570 opposite would be for institutional sponsorship in short setups. We were looking for again, much in the same way we saw for the long setups, it's in reverse,
18 00:03:33,870 --> 00:03:45,030 higher Time Frame price displacement, and that's going to come by way of a reversal or expansion, or a return to fair value. And an intermediate term
19 00:03:45,030 --> 00:03:56,550 imbalance in price that's seeing price move to a premium or moving towards the buy side liquidity, make a run on the buy stops. And then short term sell
20 00:03:56,550 --> 00:04:07,230 liquidity below the marketplace. This is gonna be ideal for pairing short exits to cover. And obviously, those sell stocks we're going to be buying those from
21 00:04:07,260 --> 00:04:18,960 the counterparties in the marketplace. And just like we did bits along setups, we would be looking for time of day influence, ie London Open high of day or New
22 00:04:18,960 --> 00:04:29,730 York high formation. Now, in this specific teaching, we're gonna be dealing specifically with the institutional sponsorship seen in long setups. Everything
23 00:04:29,730 --> 00:04:47,910 you see in the example will would just be reversing that for the criteria used in the short setups. Okay, we're looking at a higher timeframe chart. Okay, just
24 00:04:47,910 --> 00:04:52,290 for disclosure sake. This is Japanese yen US Dollar versus yen.
25 00:04:53,730 --> 00:05:03,870 And we're looking at a daily chart of that particular pair and gave you an ideal scenario where we can study a sample set of data. Okay, and it's not cherry
26 00:05:03,870 --> 00:05:11,130 picking, you guys can go through charts and actually see some of these things that come to fruition many, many times. But the criteria is for our setups to be
27 00:05:11,130 --> 00:05:20,820 high probability, we have to have institutional sponsorship. Now what is institutional sponsorship, specifically, it's the willingness to protect an
28 00:05:20,820 --> 00:05:30,600 underlying price swing that has high probability of unfolding. Now, I'm going to outline that throughout this entire teaching. But I want you to understand
29 00:05:30,630 --> 00:05:43,530 simply, institutional sponsorship is just the impact of large institutions, banks, and big equity traders coming in the fund the side of the marketplace,
30 00:05:43,770 --> 00:05:52,020 that you anticipate seeing it run towards a particular side of the marketplace, for instance, and we're looking at it by setup, we're going to be measuring and
31 00:05:52,230 --> 00:06:03,900 trying to identify characteristics that lead us to the assumption and ultimately a an understanding of institutional sponsorship as a concept so that we can go
32 00:06:03,900 --> 00:06:12,000 forward in our trading, and start looking for these fingerprints that are many times that repeating over and over again, when we use higher timeframe setups.
33 00:06:13,890 --> 00:06:21,630 And now looking at his daily chart, you'll see it shows price dropping down below an old low, this is typically where sell stops are going to be residing,
34 00:06:21,660 --> 00:06:32,940 or as we call it, a liquidity pool. sell stocks will pull below this old low, and everyone that would be wanting to go along, they would have a sell stop
35 00:06:32,940 --> 00:06:42,120 right below that. And in the fact that because everyone's doing that same idea, putting a sell stop here. That's what the idea of a liquidity pool, all those
36 00:06:42,120 --> 00:06:50,610 orders are pulling together, okay, and creating a pocket, if you will, of selling interest. Now, it doesn't mean that you want to go sell short. Okay,
37 00:06:50,610 --> 00:06:58,260 some folks out there would see that as a particular interesting level to be short at a later time, should we break below it. But in this case, when we see a
38 00:06:58,260 --> 00:07:06,270 price run like that, we obviously have to assume again, it's that market efficiency paradigm again, participants are looking to protect long positions
39 00:07:06,270 --> 00:07:15,480 there. So it's not that they want to get short, they want to get out of the long position. So if we ever see my price me to sell stops, or ran out. Now an
40 00:07:15,480 --> 00:07:23,490 aggressive trader, they can see this as an opportunity to go into a lower timeframe as that low is violated here, right on this candle here, you can go
41 00:07:23,490 --> 00:07:32,970 into a lower timeframe. And look for a similar pattern to its prices. Fractal means everything you see on one timeframe is replicable on the higher timeframe
42 00:07:32,970 --> 00:07:41,580 in the lower timeframe. So in other words, it's gonna have a lot of similarity throughout all the timeframes, because price is still what price. So you can
43 00:07:41,580 --> 00:07:50,310 look into a lower timeframes and actually study the price action and come to basically the same idea you're seeing here an old low. So we would wait for
44 00:07:50,340 --> 00:08:03,630 short term price action on a lower timeframe to create that same scenario, which is a low being violated because everything on price is fractal. By having that
45 00:08:03,630 --> 00:08:12,330 understanding and expectation, we can take a long position. But we're gonna go one step further. And we're actually start looking for evidence of institutional
46 00:08:13,170 --> 00:08:25,140 sponsorship. Now looking at this setup, okay, what's the first thing that comes to mind for you as a trader? Obviously, going back to the September's content,
47 00:08:25,350 --> 00:08:33,600 there were some things I told you to look for. In terms of studying price action, what should you be focusing on? Well, if we're anticipating a market
48 00:08:33,630 --> 00:08:43,560 move higher from down here, after a run below the old lows, we started looking for. Okay, where could this market go to? Well, we have a short term high here,
49 00:08:43,650 --> 00:08:53,760 we have a short term high here, look at this big candle here. Wonder what that's going to suggest to us? And how about this old high back here, we have a nice
50 00:08:53,790 --> 00:09:02,430 price move here. Price could ultimately go back up here. Or it could just come in this area here, close in that range. Or it can come up and clear these
51 00:09:02,430 --> 00:09:11,280 relatively equal highs. Remember, the things we talked about in September, I gave you as bullet points for you soon as you go into a price chart. And those
52 00:09:11,280 --> 00:09:20,880 are the same things you look for all the time. They're not changing, morphing, it's the same premise every single time we look at price action. But looking at
53 00:09:20,880 --> 00:09:31,320 what we see here, prices forming a potential bullish order block. Now this old high here obviously we know what's going to be resting above that it's going to
54 00:09:31,320 --> 00:09:32,250 be by stops.
55 00:09:35,520 --> 00:09:47,100 We have a doubt last down candle here. Price is now reaching into that right here. And it's also dipped one more time into that area right below this old
56 00:09:47,100 --> 00:09:59,610 low. So we did one more time poke our head just below that level. So we can anticipate now some sensitivity and protection of seeing the price not go lower.
57 00:10:00,000 --> 00:10:08,580 That's what we're anticipating. So if we see that, we're going to see what characteristics of institutional sponsorship, that means that banks are coming
58 00:10:08,580 --> 00:10:21,660 in, and they're capitalizing that old low back there. That means they're buying it again. Notice, again, that range up here, what is that its liquidity void. So
59 00:10:21,660 --> 00:10:31,680 inside this liquidity void, and above this old high, what do we have up here? This is called by side liquidity. That means there's a willing participant, or
60 00:10:31,680 --> 00:10:43,470 pool of buyers up there. Okay. So when we start talking about open float, we'll be referring to a lot of these ideas as well. But the open float can be a little
61 00:10:43,470 --> 00:10:50,130 confusing, because it's relative to the timeframe you're looking at. So while we're working on higher time frames, I'm just going to focus primarily on
62 00:10:50,370 --> 00:10:59,760 classifying this as what it is to buy side liquidity in the marketplace. So as a market maker, they see these opportunities to sell the run the stops that are
63 00:10:59,790 --> 00:11:10,260 below this Oh, low, below and a low to take the sell stops, what does that implying, they're probably accumulating, those sell stops in the form of taking
64 00:11:10,260 --> 00:11:20,820 the buy side of it. So if they're willing to buy those Buy, buy low sell stops, up, that means they're primarily building a net long book. And if we have
65 00:11:20,850 --> 00:11:29,100 suggestions in the marketplace, in the form of price action, suggesting that we have bias or liquidity in the form of liquidity, void and old, equal highs back
66 00:11:29,100 --> 00:11:43,680 here, we may see, in fact, a very easy, low risk, high probability trade scenario to be long. And obviously, you see the results of price later on, takes
67 00:11:43,680 --> 00:11:55,200 off and fills that void in. Now, by itself, you may not have caught that trade, you may not have seen this trait. And you may not have seen it as we're
68 00:11:55,200 --> 00:12:01,470 describing here, because obviously, we have the benefit of hindsight. But let's assume for a moment, we're going to go through the characteristics of what we
69 00:12:01,470 --> 00:12:09,870 just outlined in the beginning of this teaching. What we had to look for is higher timeframe, this displacement in price. That's what you're seeing right
70 00:12:09,870 --> 00:12:21,060 here. This is higher timeframe, price displacement, that means there is clear evidence that there is a large entity entering the marketplace. And the reason
71 00:12:21,060 --> 00:12:30,480 why we know that is because if this is the daily chart, daily charts are not going to move that dynamic without sponsorship behind that by banks or large
72 00:12:30,480 --> 00:12:38,970 institutions or big equity traders. Again, the reason why we focus on the daily chart is because that's where the banks are trading off of those levels are key
73 00:12:39,270 --> 00:12:49,290 to this institutional level traders. So when we see this, obviously, we have to go back to where did that move begin, we have, everything has to have a origin.
74 00:12:49,380 --> 00:13:00,390 So we go back to the beginning of that price swing, that higher timeframe, price displacement, has to have a root price level, which we can classify as an
75 00:13:00,390 --> 00:13:08,550 institutional sponsorship level, in other words, where everything started from, so if we can arrive at that, we can break down the marketplace and wait for
76 00:13:08,850 --> 00:13:17,970 another opportunity, should it get down to that level, again, that comes in a way of this order block right here, that last down candle, we're using the body
77 00:13:17,970 --> 00:13:22,740 of that candle here, not so much the wick because the book is basically the body of this candle as well.
78 00:13:25,350 --> 00:13:36,450 price comes down and hits that level. Now, again, to identify institutional sponsorship in a particular segment of price action, you need to see immediate
79 00:13:36,450 --> 00:13:49,530 dynamic response. If it's lethargic, if it's not willing to move right away. That means that is no institutional orders in that area. So therefore, if you're
80 00:13:49,530 --> 00:14:00,120 in a trade and you see that lackluster activity, the first thing you should be thinking is either reduce risk, cut the position in half, or just completely
81 00:14:00,150 --> 00:14:10,290 bail on the trade, you can always reentered another time, you can always go back in another continuation pattern. But do not force yourself to come to marry a
82 00:14:10,290 --> 00:14:18,840 idea that it has to be just because you entered the trade in the trade idea doesn't show you evidence that it wants to move in your favor dynamically. Don't
83 00:14:18,840 --> 00:14:28,320 ever regret or feel bad about wanting to clap knee and collapse that trade. Because even if it moves in your favor after you collapse it, if you have the
84 00:14:29,010 --> 00:14:37,350 characteristics that we're describing here in this teaching in your trade and you start seeing it, chances are you're probably not in a good mood. Okay, if
85 00:14:37,350 --> 00:14:44,730 you're on the right side of the marketplace, the market is going to move dynamically immediately as soon as you get in. If you are offside, you're going
86 00:14:44,730 --> 00:14:56,010 to see either the market hauling and hauling and back and forth. Stalling and then ultimately, you know, reversing on you. That's the worst scenario I'd
87 00:14:56,010 --> 00:15:03,180 rather have my losers be immediate. Show me that there's an evidence that I'm going to run long side of the marketplace, and I'm offside, but sometimes it
88 00:15:03,180 --> 00:15:09,510 won't happen. Sometimes it'll be really lethargic, and they'll start to squeeze on you slowly. And then just about when you realize you're, you're on the wrong
89 00:15:09,510 --> 00:15:18,570 side, then they'll accelerate towards your stop. Or, if you don't have stop, you really hurts worse. But that's what we use stop loss orders. But when we see
90 00:15:18,570 --> 00:15:31,140 this sell, stop low capitalized by this buying in here. Okay, we see this higher timeframe, price displacement, that means the elephant has put itself inside
91 00:15:31,140 --> 00:15:39,720 that poll, I did a teaching online tutorial page where I kind of gave you an analogy, where if you had a small children's swimming pool in your backyard, and
92 00:15:39,720 --> 00:15:48,750 you filled it up with water, and an elephant stepped inside that small children's pool, what would happen? Obviously, one of two things, if it's an
93 00:15:48,750 --> 00:15:57,840 inflatable pool, it probably would collapse. But if it could withstand the fact that the elephant was in that small children's pool, the fact that the elephant
94 00:15:57,840 --> 00:16:06,600 getting in that pool would displace the water, it would rise up above the brim of that pole and overflow. And that's what we're seeing here. This is the
95 00:16:06,600 --> 00:16:16,230 evidence of a large body or entity that has a lot more money than us. And they got into the marketplace here. How do we know that because price surged, and
96 00:16:16,230 --> 00:16:24,030 again is the daily chart. So if price can get back down to that level, again, price should see a responsiveness on the upside. So we're gonna start looking
97 00:16:24,030 --> 00:16:34,560 for signs and evidences of institutional sponsorship there, because we already identify an area where price should see returned to buying again, because it had
98 00:16:34,560 --> 00:16:43,560 a strong willingness to want to be bought up at this level here. So we're back down that level again. So we should see upside momentum or, if not, for anything
99 00:16:43,560 --> 00:16:52,830 else, or short term bounce that we can actually trade and take some profits off of. So focusing on this bullish order block here. That's where the institutional
100 00:16:53,070 --> 00:17:02,760 sponsorship is going to begin. And it comes in a way of a bullish order block. So we have this idea when we take this information, we can transpose all these
101 00:17:02,760 --> 00:17:13,710 levels down to a lower timeframe. But I'm going to build on this idea with this timeframe here. So we got one and number two of the criteria, when we're looking
102 00:17:13,710 --> 00:17:25,410 for institutional sponsorship, we see higher timeframe displacement. And we see price trading back down into a discount, and closing in basically returning to a
103 00:17:25,410 --> 00:17:36,150 fair value more back to an old area where it was bought up last time. The next level is where where's the short term? Buy liquidity, that means the buyers that
104 00:17:36,150 --> 00:17:45,630 would be above where current price market is right here, this where we're assuming the price would be at the time? Where would be the logical area where
105 00:17:45,630 --> 00:17:53,580 we'd expect to see the banks want to unload those long positions? If they're going to buy here? Where would be? Where would there be a ideal scenario for
106 00:17:53,580 --> 00:18:01,290 them to want to sell those long positions? Well, we have a short term high here, we have a short term high here, but we also have this old swing high back here,
107 00:18:01,290 --> 00:18:12,240 which was the midpoint of this overall price swing here. Okay, so we had a consolidation, accumulation, price explodes, okay, and then reverses up here.
108 00:18:12,780 --> 00:18:16,320 And it comes back down, back down to the area, which was bought up again,
109 00:18:18,330 --> 00:18:27,000 if we see a willingness to go up, we had to take our position off at logical areas. So we want to see the middle the willingness to see the market rate, run
110 00:18:27,000 --> 00:18:35,700 back up into these highs here, run those buy stops, run those biceps above the short term high. And then ultimately, we want to see this high as well. Trait
111 00:18:35,700 --> 00:18:46,500 retreated to now if the market can come back above this old high here, that's showing a willingness to do what hold for higher prices. So if they are going to
112 00:18:46,500 --> 00:18:58,170 hold it to this level here, where would be the next level on this chart that you consider for unloading long positions by the banks. Well above this old high,
113 00:18:58,200 --> 00:19:06,450 there's by stopped liquidity, obviously, as we noted earlier, so while the marketplace, we have buyers that would be willing to buy up here because why
114 00:19:06,720 --> 00:19:14,370 they have a short position here and again, it's at market efficiency paradigm. You have to think in terms of the market as the market maker so there's going to
115 00:19:14,370 --> 00:19:23,340 be buyers up here. So if you're going to be a bookmaker, okay at the bank and you're buying your net long on your book down here, you want to unload where 10
116 00:19:23,340 --> 00:19:33,030 pips 15 pips up now, obviously not that you can't move your positions in and out. You're, you're controlling such a large book in a large equity base. You
117 00:19:33,030 --> 00:19:42,420 want to get it out off up here. Why, because there's gonna be a pool of buy stops up here. Then in the form of protecting short positions. There's a large
118 00:19:42,420 --> 00:19:50,550 degree of buying interest because of that very, very nature of what we're seeing in price. The market has traded lower, they've trailed their stop loss to just
119 00:19:50,550 --> 00:20:01,140 above this high here just above this high here, and stubborn or very strong willed bears will have their buy stop protection. rate above this old high here
120 00:20:01,140 --> 00:20:08,010 under protective, buy, stop for the shortcuts and we'll be resting just above that high basically. So if you're going to be buying down here, like a bank,
121 00:20:08,040 --> 00:20:18,990 you're going to be looking for the move to go up to here. And price obviously goes up here and hits it. Now, here's the thing, as price hits that level right
122 00:20:18,990 --> 00:20:33,420 up here, what's it doing? It's pairing orders. With vice stops, step by step liquidity is gone. So what's the next level of institutional order flow? Suggest
123 00:20:33,420 --> 00:20:45,360 price may go to that old high back here. And what's resting above that? Oh, hi. Bye, stop liquidity. So now think for a moment. We have a daily chart here,
124 00:20:45,720 --> 00:20:58,020 where sell stops for rain now. Price was willing to go higher, came back down in that same area here, they bought it up. Rain in the area of buy stock liquidity.
125 00:20:58,980 --> 00:21:11,820 And we have an old high back here still. If it's going to go up here. That means it's going to be highly unlikely for it to come all the way back down to this
126 00:21:11,820 --> 00:21:22,320 level. Again, why would that be unlikely, because we've seen this low here, and it rallied higher. We've seen this lower low here that went below this old low
127 00:21:22,530 --> 00:21:30,870 and it rallied up. We came back down to that same level here and they bought it again. Now this time, we were able to move above this old high. So market
128 00:21:30,870 --> 00:21:42,570 structure on a daily chart has now changed to bullishness. So if we see this, the whole premise behind this teaching is institutional sponsorship should
129 00:21:42,660 --> 00:21:52,560 protect price from ever coming back down into this area here. So don't think just because we rally up here, let's go back down here, and let's wait for
130 00:21:52,560 --> 00:22:01,440 prices, and give us a buy signal here and then get a ride up to that level up here. No, that's not how it's gonna happen. We've already cleared an area, right
131 00:22:01,440 --> 00:22:14,040 here, this old high. And now think, if we were trying to buy here, okay. And our ultimate objective would be to take our profits up here. If we grade that swing,
132 00:22:14,610 --> 00:22:27,450 this would be origin. This would be the midway point or equilibrium and in Terminus would be up here. So they're inside this little section of price action
133 00:22:27,450 --> 00:22:36,210 would be the first grade of that price swing, this is equilibrium or midway point, then there's gonna be something up here, probably, before we get to that
134 00:22:36,210 --> 00:22:46,830 level, and then ultimately up here at Terminus. So we have four stages of that price swing, to identify, and institutional sponsorship, should support price at
135 00:22:46,830 --> 00:22:53,730 those logical areas and price down here, usually, it's pretty quick, they don't want to get you an opportunity to get in there. Okay, and once it takes off,
136 00:22:54,000 --> 00:23:02,970 then you got to look at the equilibrium price point of the overall price like you're trying to capture. In other words we're trying to buy down here and get
137 00:23:02,970 --> 00:23:12,450 off our position up here. So we're trying to buy down here and sell to the buy stop traders up here. And lords, anyone that's bearish to have a bias up above
138 00:23:12,450 --> 00:23:17,070 here. Or do you think this market is going to be a breakout candidate, if it gets above that high,
139 00:23:17,580 --> 00:23:26,730 those buy stops are our target. But in here, we do not expect to see price come all the way back down to this level, because we've already seen it trade from
140 00:23:26,730 --> 00:23:37,170 this level here. This level here, this level here. And now we have market structure breaking on a very intermediate term basis with this old high been
141 00:23:37,170 --> 00:23:46,980 violated here. So now looking at this, we could see what we have a down candle on here, price has already moved to the midpoint of that candle right there.
142 00:23:48,150 --> 00:23:57,840 Even though it's a down candle, this is an opportunity to anticipate price doing what being protected here. So institutional sponsorship, okay, should be
143 00:23:58,050 --> 00:24:07,170 identified in this area here, they should not see price come lower. And if we see that, then it's going to be a high probability, the markets going to want to
144 00:24:07,170 --> 00:24:17,730 reach up for this love walk in here, which is aiming for these old buy stops. So we're gonna take a look at that whole thing in the form of a four hour chart, as
145 00:24:17,730 --> 00:24:27,360 price came down, hit that level here and gave us that same fractal idea. Trading below an old low. Okay, because that's what we saw on the daily chart. Price
146 00:24:27,360 --> 00:24:36,300 goes just below that old low here and rallies off. Now, think for a second what's actually occurring here. What's actually happening? What's this right
147 00:24:36,300 --> 00:24:47,490 here? What's these two down candles forming? Well, it's dropping price, but it's dropping at a specific level or going into a higher Time Frame support level.
148 00:24:48,720 --> 00:24:59,520 What is that? What's that create when it does that? It's a bullish order block. It's down price or down candles at an anticipated level of support or way we
149 00:24:59,550 --> 00:25:10,950 expect To see institution order flow send price higher. So in other words we're expecting we're anticipating that that bullishness in price. Obviously, we have
150 00:25:10,950 --> 00:25:20,610 by step liquidity above this short term high, that short term high. And ultimately we have those bias that liquidity dressing well, the high that we
151 00:25:20,610 --> 00:25:22,200 were just mapping out earlier
152 00:25:28,650 --> 00:25:38,400 each time the market goes up and takes out at level buys that liquidity, we don't collapse the trade entirely. We don't look for reversal patterns, we do
153 00:25:38,400 --> 00:25:48,150 not look for divergence in indicators. Every time we get to an old high here, we're looking for a willingness to keep moving higher, to run these longer term
154 00:25:48,150 --> 00:26:01,350 buy stops. As price takes that first level out, those buy stocks are gone. What's missing now, to liquidity in the form of buy stops above that short term
155 00:26:01,350 --> 00:26:14,070 high. So what we'd be expecting to see is price continuously look to go higher, to go after the what the next level buy stops. And that comes in the way of
156 00:26:14,070 --> 00:26:31,290 those old highs here. But not losing sight of the buy stops above that higher high. Price surges higher, runs through takes us to the second level by biostat
157 00:26:31,290 --> 00:26:41,580 liquidity. Now notice what's happened here. While it was a dynamic surge through that second level by set liquidity, it fails to go back to the old high. This is
158 00:26:41,580 --> 00:26:54,300 classic price action. Now think about what we talked about earlier, we had the original point of which the price swing began or the origin, then we have the
159 00:26:54,300 --> 00:27:06,180 first area or the first scale of that price weighing in here. And price goes up. And now we're getting just about to the point at which the equilibrium price
160 00:27:06,180 --> 00:27:19,110 point would come into what information for analysis and what we would look for the fact that price has an unwillingness to go lower. That would be evidence of
161 00:27:19,110 --> 00:27:30,060 what institutional sponsorship Norwich we're not seeing them allow price go lower. That's basically all I'm saying in clear terms. So again, those buy stops
162 00:27:30,090 --> 00:27:41,850 are gone. And we're focusing primarily on a move justified by price action, is it going to still go for those buy stops above the old high here. And
163 00:27:41,850 --> 00:27:55,200 ultimately, it runs up and snaps through that old high. You can see pricing, ending that at the terminus. But notice what we have here, price has moved in
164 00:27:56,220 --> 00:28:10,680 grades, and it has moved up into what would be deemed as equilibrium on the daily chart. So let's take a closer look of why this was such an easy
165 00:28:11,160 --> 00:28:21,660 expectation and how institutional sponsorship could aid you in your price action study. When you see Buy Sell liquidity as your targets, what what things should
166 00:28:21,660 --> 00:28:33,600 we see in price action to help support these ideas. And we're gonna take a look at this in the form of lower timeframe chart. And again, outlining why the Buy
167 00:28:33,600 --> 00:28:46,620 Sell liquidity use right now. Okay, we're looking at a four hour chart of that price swing, you can see the price ceiling here. Hi, that's this move here, this
168 00:28:46,620 --> 00:28:57,300 whole price swing. And we're gonna look at institutional sponsorship throughout the entire price swing. The prop probably already noticed there's some blue line
169 00:28:57,300 --> 00:29:07,800 segments on there. So we're gonna start talking about some super secret sauce. We're looking at it now a 60 minute chart. And I want you to take a look at the
170 00:29:07,800 --> 00:29:19,830 reactions that happen from the blue line segments. Okay, and I want you to look at it real close. Those blue lines are one of the coolest things I discovered
171 00:29:19,830 --> 00:29:33,420 about price action. And not only is it indicative of what future price direction may be, but it also gives us prognostication for future setups. It doesn't just
172 00:29:33,720 --> 00:29:46,860 give us a right now what should be support or resistance. It gives us a shrewd a future prognostication for where setups may unfold at a later time. So let's
173 00:29:46,860 --> 00:29:55,380 zoom in a little bit. Okay. And I'm going to add again the levels on those short term highs and we're going to note them as the old highs. So every time you see
174 00:29:55,380 --> 00:30:03,210 that little gray horizontal line segment, what we're actually drawing your attention To is these old highs here and that's going to be in the form of those
175 00:30:03,630 --> 00:30:14,130 old buy stops. Okay, so again, you can see those gray lines here. And all that challenge is delineating those old highs in the form of price. Now I don't want
176 00:30:14,130 --> 00:30:21,300 you focusing on price numbers or anything like that I just want you focusing primarily on price action alone to delivery a price is all we're interested in
177 00:30:21,300 --> 00:30:23,130 talking about specifically for this teaching.
178 00:30:25,080 --> 00:30:36,420 Then we had the beginning of the move here, price trades down back into now this is the the run below that previous low. So we'd see price making that low and
179 00:30:36,420 --> 00:30:46,830 then we see a reaction, then we see price trading lower. Okay, all these down candles is building what that four hour order block. Okay, it's a bullish order
180 00:30:46,830 --> 00:30:54,660 block beginning right there. So that high on that candle begins the order block that would be deemed a bullish order block on the four hour chart. But because
181 00:30:54,660 --> 00:31:06,330 this is a smaller timeframe, we're gonna have a lot more candles, obviously. So I want you to take a look at the blue line segments. Okay, what I'm delineating
182 00:31:06,330 --> 00:31:13,260 there is the opening price at midnight in New York, okay.
183 00:31:18,780 --> 00:31:31,230 If we suspect that price is going to be bullish, we can look at the opening price at midnight in New York. And if we're expecting a price move higher, what
184 00:31:31,230 --> 00:31:41,130 we see in the form of institutional sponsorship is price when it goes below the opening price at midnight, should be accumulated. So here's the opening price
185 00:31:41,130 --> 00:31:51,180 late in the day, this is New York. Price trades higher. Okay, here's the opening price at midnight the next day, we're not concerned about the movement above it.
186 00:31:51,870 --> 00:32:02,550 We want to see what happens when price goes below it. Okay, now obviously gone below the opening price here we have what, what's all this this is a liquidity
187 00:32:02,550 --> 00:32:16,140 void. Okay, price is going to do what returned back down into an order block. Price, that's what the very next day it opens, trades lower and does what
188 00:32:16,200 --> 00:32:25,770 rallies. The next day we open, we trade lower. And then we rally. The next day we opened small little move below the opening price and institutional
189 00:32:25,770 --> 00:32:35,880 sponsorship steps and again, and cents price higher. The next day, the opening at noon, New York midnight candle trades lower again. And what happens
190 00:32:35,880 --> 00:32:45,330 institutional sponsorship steps in one more time and they buy it again. rallies up, we start moving into consolidation. And we'll look at each individual stage
191 00:32:45,330 --> 00:32:55,110 and price action as we look at it here. The first one is we have that bullish order block and price comes back down and snaps right back into it right here.
192 00:32:55,470 --> 00:33:11,340 Five pips added to the level, you could be a buyer at that point. Again, this is in to London timeframe. The next one here is down candle rate at the opening
193 00:33:11,340 --> 00:33:22,560 price number to find the opening price. And then we're going to be looking for a down candle. That down candle should be seeing capitalization of new Long's we
194 00:33:22,560 --> 00:33:31,050 see that come to fruition when the down candle was violated. Okay, so let me get back to this for a moment, we have this down candle here, this becomes an older
195 00:33:31,080 --> 00:33:39,240 block that's bullish when this candle trades through it. So at a later time, when it hits it here, you can be a buyer, and it has to be below the opening
196 00:33:39,240 --> 00:33:48,120 price of that day. Now it can happen during London or it can happen in New York, either one is still good viable trade. The next day here we see what price trade
197 00:33:48,120 --> 00:33:56,610 below the opening price. We have a small little order block here and this one here as well. But we're gonna, we're gonna say we're not going to worry about
198 00:33:56,610 --> 00:34:08,280 that one because we're trading at equilibrium. Okay, we're going to wait for an order block to form which we see right here. So between this high here and this
199 00:34:08,280 --> 00:34:16,980 low here, we're essentially trading at equilibrium. So when we're at equilibrium price points like that we want to see price give us an order block to give us
200 00:34:16,980 --> 00:34:25,830 the justification for wanting to expand higher and away from that equilibrium. We see the down candle here draw that out in time price hits a here at five pips
201 00:34:25,830 --> 00:34:39,660 at that level, it could be a buyer price takes off. We have the opening price here trades the support here. The down candle at that level. Now notice I'm
202 00:34:39,660 --> 00:34:47,370 using a down candle prior to that new day. That's okay, you gotta use the previous day's session sometime. The down candle here's where it's being
203 00:34:47,370 --> 00:34:56,010 capitalized. They're buying up more of it. So the institutional sponsorship should be justified by saying what the down candle being violated on the upside
204 00:34:56,010 --> 00:35:06,210 which you see it here. So when price comes back down, it doesn't come right down to To own price. I don't want to give you every possible, you know, perfect
205 00:35:06,210 --> 00:35:16,950 scenario. And then we see another opening price trades down. But we get a down candle here and it's violated on the upside. So this becomes a bullish order
206 00:35:16,950 --> 00:35:26,940 block. So you can be a buyer here. So now think in terms of power three, power three is the concept I teach as it relates to the daily, open high, low and
207 00:35:26,940 --> 00:35:37,230 closed bar. Seven wants a timeframe of daily charting. If your minimum trading is trying to capture the bulk of that daily range, you want to be buying near
208 00:35:37,230 --> 00:35:45,810 the opening on an update and exiting on the close. And obviously, it sounds like, you know, everyone should know that but the problem is, is 99% of everyone
209 00:35:45,810 --> 00:35:54,570 doesn't know how to do that. Okay, it's easy to hear conceptually. So Oh, yeah, of course, it's obvious, but try doing it. So what I have taught is power three
210 00:35:54,570 --> 00:35:58,740 is when you're bullish, you want to be buying near or below the opening price.
211 00:36:00,059 --> 00:36:10,949 This scenario does that every time it gets you either at below or very close to the opening price and allows the range to expand for you and you get a higher
212 00:36:10,949 --> 00:36:22,109 close the reason why we're expecting each day to have a higher close each day moving from a low up to a higher high, close, from a low to higher close. Below,
213 00:36:22,709 --> 00:36:32,819 up to higher close, a low up to a higher close, a low up to a higher close. And again so how to hire close ultimately low to higher close and we started the new
214 00:36:32,819 --> 00:36:41,459 day here we can't see on this chart yet. But look what's happening prices being drawn up to that first old high and look what it does once it gets up at the old
215 00:36:41,459 --> 00:36:52,259 high it starts staying sideways it's consolidating. Okay, traditional Support Resistance players will see that old high as resistance and they'll want to sell
216 00:36:52,259 --> 00:37:01,469 short. So what's going to happen they're gonna sell short sell short sell short and they'll see what prices go nowhere and thereby stops will be just above this
217 00:37:01,469 --> 00:37:11,729 old high and then a run through them again, they come back down capitalize new Long's and then extended up where to the old high here. The second one and
218 00:37:11,729 --> 00:37:19,979 what's happening there. Same scenario, they give you a reason to expect this thing to go lower because this resistance old resistance Okay. Should be sold.
219 00:37:19,979 --> 00:37:27,299 That's what classic textbook say. So what's going to happen is they're going to take a short position put your stop loss, another buy stop worried about this.
220 00:37:27,299 --> 00:37:38,729 Oh, hi. They take those positions outright here. So they're not going to see what any lower prices. But we sent price back down again into this old order
221 00:37:38,729 --> 00:37:51,959 block. What pick the next slide. Price in here as we were before we just left off that price comes back down into that little block here. Right there. rallies
222 00:37:51,959 --> 00:38:03,359 up and nice is where we stopped. We stopped short of the ultimate Terminus or the objective of the price swing. It has a retracement and goes lower. It's a
223 00:38:03,359 --> 00:38:12,629 retracement lower, we'll get everybody excited thinking it's been a high formed. Okay, so DOLLAR YEN should be trading lower, get short DOLLAR YEN, everyone's
224 00:38:12,629 --> 00:38:19,559 going to have that on the forums everyone's going to talk about on Twitter for news, social media, everything. And it's only it's going to go back down to this
225 00:38:19,859 --> 00:38:31,709 order block over here. Okay, the same capitalized order block that we saw on this initial run here. Why is this one being used again, because we had this old
226 00:38:31,739 --> 00:38:41,969 area of institutional order flow in the form of the old high at this point, that's when classic Support Resistance works. Because why we have an unfulfilled
227 00:38:41,969 --> 00:38:54,509 objective up here with that old higher high set price comes in accumulates that same position here, consolidation, back to the consolidation expands up off of
228 00:38:54,509 --> 00:39:06,539 an order block. But I want you to think about all these down candles in here. All these down candles on a 15 minute timeframe creates a larger order block on
229 00:39:06,539 --> 00:39:16,859 a higher timeframe. draw that out in time. That's the reason why we're seeing price trade here. So yes, the market opens here, trades lower closes in the
230 00:39:16,859 --> 00:39:28,259 range here is liquidity void back into the order block here. And then we have the opening here. It doesn't go lower. Can't do anything with this yet. So it
231 00:39:28,259 --> 00:39:37,679 has to expand. So we can't do anything with a buyer on this day here. We wait to the next day the opening price trades back down closes in its void back to an
232 00:39:37,679 --> 00:39:50,939 order block here and the beginning of all these down candles. That's the buy here. The next one, here's the opening price here it trades just below it here.
233 00:39:51,539 --> 00:40:00,449 But dipping into this down candle which is the order block from the previous day in New York. Okay, so I want you to think about where these were Blocks are
234 00:40:00,449 --> 00:40:12,629 forming. you're referencing old, bullish order blocks from the previous day or maybe three sessions ago. And you can buy old bullish order blocks, because
235 00:40:12,629 --> 00:40:24,569 they're going to do what recapitalize them. That's institutional sponsorship, they're defending specific levels. Why should they be defending these particular
236 00:40:24,569 --> 00:40:32,399 levels, because their vested interest is to see it go above that old, higher high, where they're ultimately looking to try to take out all of their long
237 00:40:32,399 --> 00:40:39,389 positions. Yes, they're gonna scale out some here, they're gonna scale out some here. They may scale out some of them here and here. But ultimately, they're
238 00:40:39,389 --> 00:40:48,539 trying to drive it up here because that's where large degree of buyers are going to be. And price ultimately, trades down off that candle here, and rallies up
239 00:40:48,539 --> 00:40:54,329 and ends at Terminus. So I want you to think about when you're looking at price action,
240 00:40:56,190 --> 00:41:04,710 everyone asks for what's the order block that use? Well, it starts with understanding where the market should go. Okay, and that starts by looking at
241 00:41:04,710 --> 00:41:12,900 what we talked about in September, which you should be focusing on right now. Down candles right before the up moves up candles, right for the Dow moves,
242 00:41:13,500 --> 00:41:23,310 looking for liquidity voids, looking for old lows to be violated and then rallied off of that's a turtle suit, or an old high to be rally through and then
243 00:41:23,310 --> 00:41:36,330 rejected and trade softer. That's a turtle soup sell all these ideas, okay, begin to start taking shape in your in your price action study. But you have to
244 00:41:36,330 --> 00:41:49,860 use specific generic things like time. Every order block that we refer to here is the link to a London session or a New York session. And they're happening
245 00:41:49,860 --> 00:42:01,410 from the previous day or a couple days ago. But the idea is they should be capitalized again, because there is an underlying interest for the market maker
246 00:42:01,740 --> 00:42:10,890 to see price go higher. So they're not going to allow much in way of retracement. But if it retraces it's going to go back to logical areas in the
247 00:42:10,890 --> 00:42:21,540 form of bullish order blocks or running an old low. Now the lows can be again same way an old previous New York session or London low, they'll take out the
248 00:42:21,540 --> 00:42:29,730 sell stop below the lows, and then rally up. The same thing can be seen with the boards or blocks. You want to be focusing on the London session and the New York
249 00:42:29,730 --> 00:42:40,590 session. And using these down candles in those previous sessions, to give you new buying opportunities. If you're seeing that come to fruition in your charts,
250 00:42:41,040 --> 00:42:51,090 you are seeing and identifying institutional sponsorship, every one of your successful trades will have this Hallmark the characteristic of seeing these
251 00:42:51,930 --> 00:43:01,710 recapitalized order blocks and seeing the moves. You gravitate towards these higher timeframe liquidity pools in the form of buy stocks, when you're long.
252 00:43:02,490 --> 00:43:11,040 When you have that it makes trading very easy. It's it's allows you to relax and not get too freaked out when you see these retracements like here, okay. All
253 00:43:11,040 --> 00:43:18,810 this is, is right before the last push up to go to where ultimately the price may go. Now, I don't want to sell the idea that it's always going to go to your
254 00:43:18,810 --> 00:43:27,600 levels, okay, because you're gonna have to do a lot of learning studying these ideas, but I want you to focus primarily on the characteristics I've shown you
255 00:43:27,600 --> 00:43:38,160 here. specific order blocks that take place at London in New York. Okay, they will help you discern whether there is institutional sponsorship in your
256 00:43:38,160 --> 00:43:48,510 particular trade. If you see the lack of that, chances are you're probably offside and either you're gonna want to reduce the risk on the trade or maybe go
257 00:43:48,510 --> 00:43:53,520 to the sidelines and wait for another opportunity. So until next time, I wish you good luck and good trading