39-ICT Mentorship Core Content - Month 5 - Quarterly Shifts and IPDA Data Ranges

Last modified by Drunk Monkey on 2022-09-14 11:57
1 00:00:21,930 --> 00:00:32,850 ICT: Okay, folks, welcome to the January 2017, ICT mentorship, long term analysis lesson 1.1. We're teaching implementing macro analysis. And this
2 00:00:32,850 --> 00:00:51,930 teaching is quarterly shifts and Epta data ranges the quarterly market shift. Okay, if there is an algorithm, if our belief is that there is a automated price
3 00:00:51,930 --> 00:01:04,560 delivery engine that takes care of providing efficiency in the delivery of price, the efficiency of trading at every potential trading price available per
4 00:01:04,560 --> 00:01:16,890 asset, we're gonna be dealing specifically with Forex for this teaching. But the effect of a quarterly market shift is universal in all asset classes. But I want
5 00:01:16,890 --> 00:01:30,000 to ask you a question just for a moment, try to imagine the world as investing. If it were all completely random, if the market and in fact was random? How
6 00:01:30,000 --> 00:01:44,700 could anyone reasonably have an edge? Think about statistics, really, what is it, you're still counting the odds of something that's already happening, and
7 00:01:44,700 --> 00:01:54,510 attributing that to some future unseen event. So there's no guarantee that just if the markets were completely random, if we had based our system, if our
8 00:01:54,510 --> 00:02:06,630 analysis concepts are based on the effects of randomness in the marketplace, we're left with the conclusion that, yes, things may have happened 50 times
9 00:02:06,630 --> 00:02:21,840 added last 60 times and therefore an edge could be a defined. But that does not equate to future events to have not been seen yet. That's the falsehood of
10 00:02:21,840 --> 00:02:31,560 teaching. The idea that the markets are completely random. If the markets were in fact, completely random, I myself would never have an interest in them.
11 00:02:32,400 --> 00:02:47,100 Because I would have no trust in the fact that there was any measure of prognostication that would fulfill a profitable condition as an outcome. My
12 00:02:47,100 --> 00:02:59,400 belief is that the markets are 100% engineered, they're absolutely controlled to the very pip in the foreign exchange market. I've proven many times in the past
13 00:02:59,400 --> 00:03:09,930 over many years, how we can call specific price levels to the PIP. Sometimes it varies a little bit, many times going right to the PIP as an exit or a target.
14 00:03:10,740 --> 00:03:22,080 And my opinion about that is if I can do that, multiple times throughout the year, that in itself, regardless of what I believe, I'm gonna be able to
15 00:03:22,080 --> 00:03:32,040 communicate to you from my understanding about the marketplace. If I could do that, to me, that proves that there is, in fact, zero randomness in the
16 00:03:32,040 --> 00:03:42,090 marketplace. Because if it was randomness, I could not be that precise about my forecasts. No more I believe the market is going going going to go if we
17 00:03:42,090 --> 00:03:55,440 understand and can agree that the markets do, in fact have a element of control. And this is in the form of a price engine algorithm. At the central bank level,
18 00:03:55,470 --> 00:04:07,650 they set the price. They allow the markets to move to a predefined range for the day, for the most part are sometimes that things may occur, that they send the
19 00:04:07,650 --> 00:04:20,790 price outside of the predetermined range. But for the most part, the interbank price delivery algorithm, or Epta, has data ranges that it works within. And by
20 00:04:20,790 --> 00:04:32,040 understanding what those ranges are, we can go into the marketplace with a pre determined idea where the algorithm will do its work. Where is it pulling the
21 00:04:32,040 --> 00:04:44,280 information from? What dates, what ranges? And what specific highs and lows is the algorithm reaching to as a reference point? That's what this teaching is
22 00:04:44,280 --> 00:04:54,420 going to talk about specifically today. I want to remind you and I've talked just briefly about this in the free tutorial section as I was going through all
23 00:04:54,420 --> 00:05:05,490 the teachings I provided for the online community, as it trades the The foreign exchange market, I teach that there is a market structure shift that takes place
24 00:05:05,490 --> 00:05:13,770 every three to four months. And for the most part that's universal doesn't apply just to the foreign exchange market, but it does apply to all asset classes.
25 00:05:15,059 --> 00:05:29,249 This effect takes place because the market has to generate new interest, it has to have a new sense of urgency. a missed opportunity is a lost opportunity in
26 00:05:29,249 --> 00:05:38,879 many people's eyes as a trader, so the markets have a tendency to move around and gyrate around every three to four months. What was true or what was seen as
27 00:05:38,879 --> 00:05:48,209 a directional movement in the marketplace over the last two or three months, may not, in fact, be true for the next coming two to three or four months in market
28 00:05:48,209 --> 00:05:58,079 direction. So I'm going to counsel you to always look at price on a macro level, it means a monthly, weekly and daily timeframe, and learn to anticipate
29 00:05:58,559 --> 00:06:08,969 intermediate price swings. It doesn't matter if the market is predisposed to go up on a primary bullish market or a primary down market. You can still figure it
30 00:06:08,969 --> 00:06:21,569 out rather significant intermediate term retracements in either strong uptrend or downtrend. If you understand this component, you'll also be able to weather
31 00:06:22,109 --> 00:06:30,839 the deep retracement sometimes in long term position trading that is required. You'll also understand that by understanding that there's intermediate term
32 00:06:30,959 --> 00:06:40,379 retracements on these higher timeframe levels. And if you're a long term position trader as this month is aimed at teaching, you'll also have no problem
33 00:06:40,469 --> 00:06:52,829 and no emotional commitment to not holding the position forever. But in fact taking some of the positions off waiting for that retracement. And then going
34 00:06:52,829 --> 00:07:01,979 back in adding that same position you just took off or portion of that position off your long term position, trade and then adding it back in to recapitalize on
35 00:07:01,979 --> 00:07:13,739 that further movement higher every three to four months. There's going to be a change in direction. It may cause a consolidation or it may cause a retracement
36 00:07:13,739 --> 00:07:25,199 of whatever price swing has been unfolding up to that moment. The fact that the market isn't a primary uptrend or downtrend that's going to be whether or not
37 00:07:25,199 --> 00:07:35,789 the market has a deep retracement on a higher time frame basis or if it goes into consolidation. If the markets in a strong uptrend many times you won't see
38 00:07:35,789 --> 00:07:43,529 much of a retracement. But you will see consolidation or a trading range form. And they'll capitalize new long positions that way. And then sometimes I'll take
39 00:07:43,529 --> 00:07:53,249 the market below a short term low on a daily chart and then send it higher after that. That would be the the extent of any kind of retracement. But either way, I
40 00:07:53,249 --> 00:08:02,429 want you to look at the marketplace. There's always some intermediate term play to trade on every three to four months on every asset class, if the market
41 00:08:02,429 --> 00:08:14,069 you're looking at or studying is in a significant range bound environment. Look at a market that is potentially moving up to a new uptrend or a downtrend stage
42 00:08:14,099 --> 00:08:23,789 in its price action. By doing so it will also get you in line with potential long term trends moving higher or lower respectively, to what you would be
43 00:08:23,789 --> 00:08:30,749 seeing in your charts. We're gonna talk a lot about that this month. But let's get into a little bit more nuts and bolts about how we can use if that data
44 00:08:30,749 --> 00:08:41,789 ranges and the quarterly market shifts. Now obviously, my view on the marketplace is if we can focus in on what the smart money's doing with their
45 00:08:41,789 --> 00:08:52,889 money. How are they allocating funds? How are they moving into the marketplace? If we can mimic those characteristics in our own trading, hopefully the outcome
46 00:08:52,889 --> 00:09:01,139 should be we have high probability conditions. When we look at smart money accumulation for buy programs a buy program is when the market goes through a
47 00:09:01,139 --> 00:09:12,749 series of successive days sessions that are consecutive. Regardless of what timeframe it is. You can see a buy program on a hourly chart you can see it by
48 00:09:12,749 --> 00:09:26,279 program on a four hour chart you see it by program on a daily and or weekly or monthly. But the trading timeframe that we're using for this month, is primarily
49 00:09:26,279 --> 00:09:36,209 the daily chart. So if we're going to be anticipating a bi program, that means we're going to be expecting a series of updates, and it could last as long as
50 00:09:36,449 --> 00:09:46,289 several months. It doesn't have to be a few days but a few days up on a daily chart can still be considered a bi program, if it's reaching for a measure of
51 00:09:46,289 --> 00:09:57,359 liquidity that would be above the recent market highs. But we're looking for Smart Money accumulation for buy programs and what we're essentially expecting
52 00:09:57,359 --> 00:10:04,169 is manipulation in the underlying versus the benchmark. Now, what is the underlying and what is the benchmark?
53 00:10:05,640 --> 00:10:12,210 What we're going to be looking at, again, specifically dealing with the foreign exchange market for this teaching, but we will be talking about commodities, we
54 00:10:12,210 --> 00:10:19,980 will be talking about stocks. And we'll be talking about interest rate markets as well, in the same venue that we're teaching here. But I want to keep the
55 00:10:20,010 --> 00:10:30,660 topics very concise about one asset class at a time, does it avoid any kind of confusion on you as a as a student, but the manipulation of the underlying the
56 00:10:30,660 --> 00:10:42,720 underlying is what you're actually trading. And the benchmark is what you're measuring the potential manipulation or lack thereof. For Smart Money
57 00:10:42,720 --> 00:10:54,420 accumulation for a buy program on a daily chart, the benchmark is going to sometimes make a lower low. While the underlying makes a higher low. This would
58 00:10:54,420 --> 00:11:07,410 indicate the strong buying pressure on the underlying issue, or in this case, the currency that you're trading, it's failing to make a lower low, whereas the
59 00:11:07,410 --> 00:11:16,260 benchmark would be making a lower low. It's showing relative strength. So therefore, you would expect a measure of upside movement.
60 00:11:21,420 --> 00:11:29,820 Another scenario where Smart Money accumulation for buy programs would come in the way is the underlying, or the currency that you're trading makes a lower
61 00:11:29,820 --> 00:11:44,400 low, while the benchmark makes a lower high. And this is for inverse, correlated benchmarks to currency. And I'll give you an example. For the point number two,
62 00:11:45,240 --> 00:11:56,190 where it says benchmark makes lower low, underlying makes higher low. In this case, that statement can be true by saying the dollar index makes a lower low
63 00:11:56,220 --> 00:12:09,300 while the dollar yen makes a higher low. That would be a accumulation by program. The underlying or currency that you're trading makes a lower low, but
64 00:12:09,300 --> 00:12:19,920 the benchmark makes a lower high. In this case, this would be true in the sense that if we were looking at say the British pound USD makes a lower low, while
65 00:12:19,920 --> 00:12:30,180 the dollar index makes a lower high. What that would indicate is while the dollar was failing to make a higher high in respect to making a lower low and
66 00:12:30,180 --> 00:12:41,580 the British pound versus US dollar, it's indicating that the pound is actually going under an old low to scoop up sellside liquidity. So therefore, we wouldn't
67 00:12:41,640 --> 00:12:54,900 anticipate a turtle suit scenario on a daily chart benchmark makes higher high underlying makes higher low. In this case, it's stating a condition that would
68 00:12:54,900 --> 00:13:05,610 be the dollar making a higher high, which would look like relative strength for the dollar. But the underlying or in this case, we'll use the POUND DOLLAR makes
69 00:13:05,610 --> 00:13:14,190 a higher low, that POUND DOLLAR should have made a lower low, but it was unwilling to make that lower low. So therefore the relative strength is in the
70 00:13:14,190 --> 00:13:23,880 buy side on pound versus dollar. And the dollar is actually going above an old high to take the buy stops above and Ojai and then reject, we would look for a
71 00:13:23,880 --> 00:13:36,660 turtle soup sell on a daily in that condition. For Smart Money distribution for sell programs, we'll look at the four conditions that we use for that. Again,
72 00:13:36,660 --> 00:13:45,150 the manipulation in the underlying versus the benchmark is what we're studying. This is all relative to the daily timeframe only nothing less than a daily
73 00:13:45,150 --> 00:13:56,730 chart, the benchmark makes a higher high, while the underlying makes a lower high. In this case, that would be the dollar making a higher high, while the
74 00:13:56,730 --> 00:14:09,540 underlying or in this case would be the dollar yen makes a lower high. That would be a sell program, or showing heavy distribution in the dollar yen pair.
75 00:14:13,380 --> 00:14:24,780 Underlying makes a higher high while the benchmark makes a higher low. This could be true in the sense that the POUND DOLLAR makes a higher high while the
76 00:14:24,780 --> 00:14:34,410 dollar index makes a higher low. In this case, what it's implying is for instance, if the underlying is the POUND DOLLAR, and it makes a higher high,
77 00:14:34,680 --> 00:14:43,620 it's reaching above an old high to get the buyside liquidity for turtle soup sell. And the dollar index is actually failing to make a lower low so the
78 00:14:43,620 --> 00:14:56,790 underlying strength is in the dollar index. Lastly, for a sell program on a daily chart, the benchmark makes a lower low while the underlying makes a lower
79 00:14:56,790 --> 00:15:08,490 high. In this case, it would be the dollar index makes a lower low, while the POUND DOLLAR makes a lower high, the dollar index making a lower low while the
80 00:15:08,490 --> 00:15:19,200 pound making a lower high, the POUND DOLLAR, while making a lower high showing relative weakness. While the benchmark Dollar Index makes that lower low, it
81 00:15:19,200 --> 00:15:27,210 would look like the dollar index is breaking lower. So therefore support broken is going to see continuation go lower, when in fact, what's actually happening
82 00:15:27,210 --> 00:15:36,030 is the dollar index would be breaking out previous low to accumulate, all the sell stops below an old low. While the POUND DOLLAR was unwilling to make a
83 00:15:36,030 --> 00:15:44,190 higher high because it's already booked enough shorts and it's heavily under distribution, we will be seeing heavy selling in the POUND DOLLAR based on the
84 00:15:44,190 --> 00:15:55,110 relative weakness because it was failing to make a higher high while the dollar index made a lower low. All that said,
85 00:15:55,440 --> 00:16:03,930 and it was probably a little bit confusing for you, but I gave you some replacements. But the rules are, as they were explained just a moment ago on the
86 00:16:03,930 --> 00:16:13,050 previous slide. But you can see everything said here we'll go through it briefly. Smart Money accumulation provide programs or specializing in the
87 00:16:13,050 --> 00:16:21,480 manipulation in the underlying versus the benchmark. And that's seen in the sense that the dollar index makes a lower low while the dollar Swiss, for
88 00:16:21,480 --> 00:16:32,430 example, makes a higher low that would be bullish for the dollar Swiss Euro dollar makes a lower low while the dollar index makes a lower high that will be
89 00:16:32,430 --> 00:16:42,270 seen as bearishness for the dollar and bullishness for the Euro dollar because it went below and a low to scoop up the sell side liquidity and then you would
90 00:16:42,270 --> 00:16:54,060 see a rejection or a turtle soup long. The dollar index makes a higher high and the Euro dollar makes a higher low. And that would be relative strength for the
91 00:16:54,060 --> 00:17:02,940 euro dollar. And the move above the old high on the dollar index would be a turtle soup sell after running the buyside liquidity and Smart Money
92 00:17:02,940 --> 00:17:10,830 distribution for sell programs. Again, focusing on manipulation in the underlying versus the benchmark, the dollar index makes a higher high, at the
93 00:17:10,830 --> 00:17:20,730 same time, the dollar Swiss would be making a lower high, that would be relative weakness in the dollar Swiss pair. And the dollar index making a move of an old
94 00:17:20,730 --> 00:17:30,210 high would be a run on buy stock for dollar and then you would see rejection after that. And looking for lower prices on Dollar Index. The dollar index and
95 00:17:30,210 --> 00:17:41,010 the dollar Swiss are closely correlated. And just like the dollar Swiss being close Clora to the dollar index, it was dollar CAD when oil was not an issue.
96 00:17:41,040 --> 00:17:54,030 And dollar yen is also closely correlated to the dollar index. Positively or naturally correlated, versus the euro dollar and the dollar index, they're
97 00:17:54,030 --> 00:18:01,980 inversely correlated. So that means whatever the Euro Dollar is doing the opposite seeing in the dollar index. And its third example for the sale program,
98 00:18:02,010 --> 00:18:12,270 Euro dollar makes a higher high, while the dollar index makes a higher low relative strength in the dollar index. And underlying weakness should be
99 00:18:12,270 --> 00:18:20,940 expected after Euro dollar takes that old high out running out to buy stop liquidity in a daily chart should see lower prices in that condition. Dollar
100 00:18:20,940 --> 00:18:31,530 Index makes a lower low while the Euro dollar makes a lower high. That's relative weakness in the Euro Dollar pair. While the dollar index does in fact
101 00:18:31,530 --> 00:18:38,940 go below that lower low the dollar index would be scooping up the sell side liquidity below an old low and then rejection in trading higher on the dollar
102 00:18:38,940 --> 00:18:52,380 index, thus pushing your dollar lower. Okay, what we're looking at here is the dollar index is a monthly chart. And what I did was outlined a full year,
103 00:18:52,650 --> 00:19:03,000 January to January. And I want you to take a look at the price swings in between all these reference points vertically. As you see there's a couple different
104 00:19:03,030 --> 00:19:14,820 market shifts that take place. And this is what it looks like if you have it set up one every four months versus the last live being every three months. And I'll
105 00:19:14,820 --> 00:19:25,860 give you an example of seeing and again, this is your chart divided up on every three months. And every four months and you can still see it gives you a really
106 00:19:25,860 --> 00:19:41,010 good context of where the market structure is and what market shift should take place next. This is that same dollar index is viewed on a weekly timeframe. And
107 00:19:41,010 --> 00:19:57,270 we're looking at every four months for quarterly shifts. And we're gonna drop down into a daily chart. You can see here we have the dollar index daily. And
108 00:19:57,300 --> 00:20:10,200 what I did was again, I'm only using calendars starts of each month here, from one January to the following year's January. Or, in the case of this example,
109 00:20:11,100 --> 00:20:19,110 the New Year 2017 that we're now in looking at 2016 is January 1 to January 1 2017.
110 00:20:21,240 --> 00:20:30,930 I want you to take a look at how many times the market shifts back and forth. And how many price swings you see over the course of a four year, on a daily
111 00:20:30,930 --> 00:20:39,960 timeframe, you're not getting a great deal of setups. And unfortunately, that's the reason why most people don't trade this timeframe. But it is a timeframe
112 00:20:39,960 --> 00:20:50,100 that is supportive to all other disciplines of trading. And I've said this multiple times. I'm not going to belabor it here. But I want you to see how the
113 00:20:50,100 --> 00:20:59,460 market does in fact, give us a very good macro view of the marketplace where it gives us framework and structure to work within. So that we can trade on one
114 00:20:59,460 --> 00:21:14,340 side of the marketplace and focus primarily there. Alright, let's deal with a little bit more detail about what is a quarterly shift. Okay, on your chart,
115 00:21:14,370 --> 00:21:22,890 you're going to delineate with a vertical line on your calendar, at the beginning of the year, you're going to find or if you're just now starting, say
116 00:21:22,890 --> 00:21:31,650 you're watching this video, which you shouldn't be because everyone should be watching at the same time in January 2017 As part of this mentorship, but for
117 00:21:31,650 --> 00:21:42,270 those that are studying, again, watching this video in the mentorship and their access to the content, you may look at your charts, and it may be May, okay, it
118 00:21:42,270 --> 00:21:50,220 could be three years from now. And you could do a whole new analysis by taking a look at the chart and putting a vertical line at the beginning of the most
119 00:21:50,220 --> 00:21:58,710 recent past month. Okay, for instance, we're in January right now, you will put it on the first of December. Okay, and you would do everything I'm about to
120 00:21:58,710 --> 00:22:08,040 explain to you here. But the start at all, to make it easy to explain everything, I just use the January to January factor. And we're going to be
121 00:22:08,040 --> 00:22:16,200 viewing that as the anticipated quarterly shift. Now we don't know that's going to be true. But we're going to do some things to arrive at how we can calibrate
122 00:22:16,650 --> 00:22:29,820 that level. And this is called the look back. What you're gonna be doing is you're gonna look back from your month of study, wherever that is in time,
123 00:22:29,850 --> 00:22:40,080 regardless of what when you start your analysis, the most recent past month, okay, you want to be using that first trading day of that month, put a vertical
124 00:22:40,080 --> 00:22:47,880 line on your chart. And then from that point on, you're going to be looking back to the left, you're gonna be looking back to the left of that vertical line that
125 00:22:47,880 --> 00:23:02,190 you place on your chart 60 trading days 40 trading days and 20 trading days now why am I giving you those three parameters, the algorithm will reach back about
126 00:23:03,360 --> 00:23:15,450 three trading months worth of data. That's the the average where the reach back for now, there's other times where it will go into further ranges. But for now,
127 00:23:15,480 --> 00:23:29,310 I'm just teaching you how to look for the most salient points of reference on a daily chart. The 60 to 40 and the 20 trading days left of the most recent
128 00:23:29,730 --> 00:23:38,820 calendar month, put your vertical line on that that's your beginning market point. And you got to delineate what 60 days to the left of that is, what 40
129 00:23:38,820 --> 00:23:47,400 days to the left that is and what 20 days, and they're all trading days, not calendar days. You're going to basically in those ranges, you're going to
130 00:23:47,400 --> 00:24:00,750 identify institutional order flow, what was the market doing 60 days ago, to now or to record a line of that most recent month that's delineate on your chart
131 00:24:00,780 --> 00:24:11,040 also, to the left of that vertical line you placed on your chart, you're gonna be looking back over the 60, the 40 and the 20 past trading days to the left of
132 00:24:11,040 --> 00:24:24,150 that past month. And you're gonna look for recent institutional reference points. Look for an old price high. You're looking at old price low. Why are you
133 00:24:24,150 --> 00:24:32,460 doing that you're looking for a potential liquidity pool that would be resting above it. Or if those highs have a lot of wicks, you're gonna be looking for
134 00:24:32,460 --> 00:24:41,430 rejection blocks, which would be a move above the bodies of the candles for a potential sell off or below an old low that has long wicks on it, you'd be
135 00:24:41,430 --> 00:24:52,620 looking for the bodies of the candle to house some sell side liquidity below that for a rejection block. Or sell stops below an old low if there's not a
136 00:24:52,620 --> 00:25:02,850 whole lot of wicks to the lows that would be defined in the last 16 To 14 to 20 trading days. You'd be looking for bearish or Blocks, bullish or blocks in the
137 00:25:02,850 --> 00:25:11,640 last 60 days, and you're gonna look specifically around the last 60, around 40. In the last 20 days, basically, you're looking back the last three trading
138 00:25:11,670 --> 00:25:17,970 months. And you'll be looking for fair value gaps and any liquidity voids as well.
139 00:25:21,270 --> 00:25:34,380 Once you identify over the last 60 trading days, okay, you're using the previous closed calendar month as your beginning reference point. Again, as an example,
140 00:25:34,380 --> 00:25:49,320 right now, today, it's January 6 2017. And if I were to use this method, I would look at December 1 2016, my vertical line would be on that calendar day. And
141 00:25:49,320 --> 00:25:57,690 then I would look 60 trading days, to the left of that, on my chart, I would look 40 trading days to the left of that. And that would look 20 trading days to
142 00:25:57,690 --> 00:26:08,070 the left of that December 1, or whatever the first trading day would be for December 2016. And I'd be looking for over those three months, where's the high,
143 00:26:08,130 --> 00:26:17,550 and where's the low, if the market has been trading higher, I'm going to frame everything off of the market low. If it's been trading lower, I'm going to try
144 00:26:17,550 --> 00:26:28,950 to frame everything off of the market high. So again, I'll repeat that for you. You're looking back left 60 trading days at the maximum over those last 60
145 00:26:28,950 --> 00:26:36,900 trading days, you're determining what was the institutional order flow over those last three months? Was it trading higher, collectively? Or was it trading
146 00:26:36,900 --> 00:26:46,770 lower collectively, as a whole? Sometimes you're gonna look at it, and it'll be a rather large trading range. And that's okay. So you'll be able to do things
147 00:26:46,770 --> 00:26:55,140 with that as well. But for now, you want to see, what's more significant? Was there a significant intermediate term price low formed in the last 60 trading
148 00:26:55,140 --> 00:27:05,490 days to the left? Or was it a significant intermediate term high that formed, whichever is true, and whichever is obvious to you, then you put your vertical
149 00:27:05,490 --> 00:27:14,850 line on that high or that low. So now you're calibrating it to the market structure that's in place right now. Once you do that, what you're doing is
150 00:27:14,850 --> 00:27:18,510 you're anchoring your vertical line to a previous market structure shift.
151 00:27:24,120 --> 00:27:34,800 Okay, so let's go back to our daily chart of the dollar index. Okay. And this is what we had earlier. In the presentation, I had January 1 2016, to January
152 00:27:34,800 --> 00:27:47,280 1 2017. Okay, and I'm going to do what I just explained to you. If we were looking at the market in January 1 2016, we're going to actually do what I
153 00:27:47,280 --> 00:28:03,930 explained just a moment ago, and this is what we end up at, we will be moving to December 2015. The first trading day there, versus January 1 of 2016. So we
154 00:28:03,930 --> 00:28:12,660 moved to the left. And we noted that Hi. And when you're using the first calendar day of the month, and then we're always using that reference point to
155 00:28:12,660 --> 00:28:22,200 calibrate and begin. Because again, if our belief is the algorithm is systematic, it's methodical, it's going to work on data ranges. And it's going
156 00:28:22,200 --> 00:28:31,740 to use calendar dates. And it has to reference how far to look back, because it's a numerical reference point. So now we know how we can calibrate just like
157 00:28:31,740 --> 00:28:40,560 the algorithm will, will define it in the sense of every three months there is a shift, also in the last three months where's the liquidity yet, and that's a
158 00:28:40,560 --> 00:28:48,240 sensitive, but we're going to be talking specifically dealing with in the next teaching with the open float for for here. To get to that understanding. In the
159 00:28:48,240 --> 00:28:58,320 next teaching, I have to teach you how to calibrate your market structure. So that way you can see where the market is most likely gonna reach four. So now we
160 00:28:58,320 --> 00:29:08,490 have our reference point on our vertical line all the way to the left the furthest most left vertical line, again delineated at December 1 2015. And now
161 00:29:08,490 --> 00:29:18,900 we're anchored. Now we're going to do to look back on that vertical line, we're gonna be looking at the range that was created in the last 60 trading days from
162 00:29:18,900 --> 00:29:32,070 that vertical line that we adjusted and anchored at December 1 2015. Over the last 60 trading days, what we saw is the market traded higher from around
163 00:29:32,070 --> 00:29:41,940 October 2015. So it made an intermediate term low. The market traded up and created that short term or intermediate term high at December 1 or there abouts.
164 00:29:42,630 --> 00:29:52,170 In the last 40 trading days to the left of that December 1 2015 delineation of that vertical line. We also see there was consolidation and then expanded again
165 00:29:52,170 --> 00:30:01,650 once more time higher. In the last 20 trading days to the left of that vertical line. The market just kept pressing higher. So So institutional order flow with
166 00:30:01,650 --> 00:30:18,360 bullish. So where is the liquidity at? It's going to be what? It's going to be below the marketplace because the market has already traded higher. That's this
167 00:30:18,360 --> 00:30:36,210 reference point here. Grateful that October low the market trades lower after or to the right of December 1 2015 wants to market trades lower. In between this
168 00:30:36,210 --> 00:30:50,490 reference point once we identified where the market structure starts to break down, that means a kilo was broken. And that kilos seen right here. Any
169 00:30:50,490 --> 00:30:58,080 retracement higher or movement higher at this moment, we're going to be anticipating and move lower because the market has already been moving
170 00:30:58,110 --> 00:31:08,880 bullishly. We've seen a market structure break lower. And now we're going to be anticipating a potential move lower in the dollar index. It could be a
171 00:31:08,880 --> 00:31:19,110 consolidation sideways, but we're still expecting a measure of bearishness in the dollar index post December 2015.
172 00:31:23,819 --> 00:31:34,229 That 60 to 40 and a 20. When we look back like this, again, we're focusing primarily on where has the market traded from what was the institutional order
173 00:31:34,229 --> 00:31:46,499 flow at that point. And this time, we can see clearly between the October in November into December 2015 to market had been trading bullishly. I don't care
174 00:31:46,499 --> 00:31:54,749 about the long long term trend right now all we're doing is looking at quarterly shifts. And this will give you a great deal context on how you can do a lot of
175 00:31:54,749 --> 00:32:02,999 different trading. But it'll help you frame your position trades. Because without understanding this, you can't incorporate trend. To get yourself on the
176 00:32:02,999 --> 00:32:10,679 right side of the marketplace. There are things that we're going to teach in the content for January to helps you get in sync with long term trends. But for the
177 00:32:10,679 --> 00:32:19,889 most part, I want you to look at how the market shifts back and forth both directions. The markets aren't always in big long term trends on the higher
178 00:32:19,889 --> 00:32:32,189 timeframe charts, they may be in a larger range, that larger range will be trends that would look dynamic on a hourly chart or a 15 minute timeframe. But
179 00:32:32,189 --> 00:32:41,789 on higher timeframe, you're still within a well defined range. So by using this higher timeframe, daily chart, when we see the market structure shift bearishly
180 00:32:42,719 --> 00:32:54,479 we're expecting now the next three months to be a potential correction. Again, the reference points that I asked you to go into and look for were all the
181 00:32:54,479 --> 00:33:09,419 things we taught in September, which is the order block, bullish and bearish. Fair Value gaps, liquidity voids old highs and old lows. So we're anticipating a
182 00:33:09,419 --> 00:33:19,289 move back into institutional reference points, then moving lower looking for that same event to occur looking for lower level institutional reference points.
183 00:33:19,829 --> 00:33:27,839 In other words, price should be drawn down to a logical level not randomness down to a logical level from an institutional vantage point where we can see
184 00:33:27,839 --> 00:33:44,519 where they would want to absorb liquidity or engineer new liquidity into the marketplace. So using this last 6040 and 20 idea, we want to look at how price
185 00:33:44,759 --> 00:33:59,429 in those ranges What is it created while the market has moved higher. So prior to December 1 2015, two marketplace had institutional order flow that was moving
186 00:33:59,429 --> 00:34:09,239 bullishly. So that means as the market was moving higher, every short term low is going to have sell side liquidity or sell stops below that. So in each one of
187 00:34:09,239 --> 00:34:17,249 these ranges, what we can do is define the range, find the low, and then we can note that as where all of the sell side liquidity is.
188 00:34:26,970 --> 00:34:38,250 Now once you have your vertical line calibrated to the most recent market structure shift, and you've done the look back and you've defined all of the
189 00:34:38,250 --> 00:34:47,280 liquidity reference points on the 6040 and 20. Last trading days to the left, and you identified institutional order flow and you refer to all the recent
190 00:34:47,700 --> 00:34:58,140 institutional reference points that we've identified in brief listing. Now we're gonna be doing the cast forward. Okay, the cast forwards when you look ahead
191 00:34:58,440 --> 00:35:08,850 with the same parameters we use When we looked back, we're anticipating the next market shift in 20 to 60 trading days, again, because we understand and we, our
192 00:35:08,850 --> 00:35:27,120 belief is that market will have a gyration, a new directional bias, okay, or a shift in sentiment, or as I call it a quarterly shift. We cast forward 20 days
193 00:35:27,150 --> 00:35:40,020 to the right of our vertical line when the last shift was 40 days ago. In other words, if we seen a market structure shift, after a vertical line was delineated
194 00:35:40,020 --> 00:35:49,860 if we see the market shift in the last 40 days, to the left of where we're at now, we cast forward 40 more days, because we're always using a reference point
195 00:35:49,860 --> 00:35:50,730 of 60 days.
196 00:35:57,090 --> 00:36:13,230 We cast forward 40 days when the last shift was 20 days ago. Again, the common denominator is it's 60 days of range that we're always using. We do this until
197 00:36:13,230 --> 00:36:23,190 we reach the extreme of the projected three month limit and onwards where there would be another vertical line, draw our chart score capping three months.
198 00:36:28,560 --> 00:36:39,480 So what does that look like? This is what it looks like here. This is called the cast forward, where we had delineated a calendar first trading day, in 2015,
199 00:36:39,480 --> 00:36:54,480 December 1, as we did moments ago. We have a 20 day range, a 40 day range and a 60 day range added to the right of our December 1 2015, delineation or the
200 00:36:54,480 --> 00:37:09,870 vertical line. And now what we have is a future date range or a data range. The algorithms going to anticipate doing a shift in the marketplace, in that range
201 00:37:09,870 --> 00:37:28,860 between 60 and 20 days. If we've seen the market structure break down, as we saw a moment ago by delineating this low here then we're looking for a market move
202 00:37:28,890 --> 00:37:35,010 going lower the fill in a potential liquidity void, seen here.
203 00:37:42,150 --> 00:37:55,350 In the range of 60 days to the right of our market structure shift delineation that we have, at December 1 2015. We expect a setup on a daily chart essentially
204 00:37:55,410 --> 00:38:05,520 in the next 60 days. So that tells you a time horizons, you could have to wait sometimes as long as 60 trading days. Now, this is the reason why I'm not a
205 00:38:05,550 --> 00:38:13,860 heavy position trader because I don't have the capacity to wait that long for the next trade. Some of you that may be perfect for you. But for me personally,
206 00:38:14,010 --> 00:38:24,300 it doesn't fit my cup of tea. But it doesn't have to require you trading for that entire duration. You can use this to get daily bias contacts, you can get
207 00:38:24,300 --> 00:38:33,480 short term setups, and you can get long term objectives where the market should be moving over weeks and months, versus limiting your scope on a short term
208 00:38:33,480 --> 00:38:46,110 intraday basis and marrying those lower timeframes. We're looking at the Euro dollar in the same way. But obviously like we mentioned earlier, the US dollar
209 00:38:46,110 --> 00:38:55,230 is going to be inversely related to the euro dollar. If we're expecting bearishness on the dollar index, we will be expecting bullishness on the
210 00:38:55,230 --> 00:39:07,260 Eurodollar. So in the same way, we're going to add 20 days to the right of our 2015 December 1 40 days to the right of that vertical line. And then we're gonna
211 00:39:07,260 --> 00:39:18,180 add 60 days to the right of that line. And on Mt four, what you're going to do is you can just use a trendline and anchor it to your vertical line, drive it
212 00:39:18,210 --> 00:39:26,070 out to the right and let go of it for a little bit and click back on the right end of it and drag it out some more and you'll see the number that gives you a
213 00:39:26,070 --> 00:39:37,260 range is pull that out until you get to 20 to 40 and to 60. And then you'll have the delineations that would be necessary to frame out how far the ELLIPTA data
214 00:39:37,260 --> 00:39:52,110 ranges go. I want you to see that. The high formed here on the euro dollar. Look how it falls directly right at the 60 day if the data range nails on the very
215 00:39:52,110 --> 00:40:03,690 high. This is a daily chart folks. Okay, so think about what we're doing here. We're mapping out where the highest probable time When the time range should be
216 00:40:03,690 --> 00:40:14,040 influential in when the setups occur. Now we're going to have a lot of tools to help us move down into a lot more precision, even with this timeframe, but you
217 00:40:14,040 --> 00:40:22,770 have to understand when the setups occur. Again, if it's something that's not random, and if it is, in fact manipulated and controlled, there should be
218 00:40:22,770 --> 00:40:30,750 characteristics that repeat themselves. And that should be measurable. And we should be able to see things repeat themselves based on a criteria, the
219 00:40:31,380 --> 00:40:44,910 algorithm will seek to do something in the first 20 days, the first 40 days, and up to 60 days, after the most recent market structure shift, we saw a high form
220 00:40:45,180 --> 00:40:55,590 on the dollar index and expected the market to move lower because it broke its market structure bearishly we can see the Euro dollar made a low here, December
221 00:40:55,590 --> 00:41:09,390 1 2015. And price moves higher breaking market structure bullish Lee for it in between the vertical lines, okay, once you have calibrated your market structure
222 00:41:10,170 --> 00:41:19,680 on a quarterly basis, and we're assuming back in back in 2015, December 1, that we would have calibrated there. Now, again, I'm going to give you this as a
223 00:41:19,680 --> 00:41:27,720 homework because I want you to go through your chart and do this very exercise and you're gonna see it's not forfeited, it's the same stuff that you can do on
224 00:41:27,720 --> 00:41:35,700 your own charts. Don't just use what I'm using here, go into your charts and do the very thing that I'm showing you here. Assume that you started doing the
225 00:41:35,700 --> 00:41:44,730 analysis in for instance, July of 2016. And do the same thing, okay. And you'll see it still helps you, you know, give you all the data points that you would be
226 00:41:44,760 --> 00:41:58,830 using. But if we see that we're expecting bullishness on the part of the Euro dollar, because the dollar index was expected to go bearishly after December
227 00:41:59,070 --> 00:42:12,510 2015. That means all the way up into March 2016. We have a stance that the bearishness in the dollar should bode well for bullishness on the Eurodollar. So
228 00:42:12,780 --> 00:42:26,250 between those two reference points, because we understand that December 1, okay, we go out forward three to four months, we go as far as March 1. And by having
229 00:42:26,250 --> 00:42:35,130 March 1, to find as the beginning of the new month out that at that far away, we project at that limit on the quarterly range.
230 00:42:36,990 --> 00:42:50,070 In between December 1 and march 1, we would be expecting a bullish signal to form in the Euro dollar and a bearish signal form in the dollar index. Getting
231 00:42:50,070 --> 00:42:58,620 back to what we mentioned earlier about buy programs and sell programs, the scenario would be even looking at a daily chart, there's going to be a
232 00:42:59,700 --> 00:43:17,460 manipulation that takes place even on the higher timeframe daily. Let's go back to the dollar index. Okay, do you see the highs here all these highs are forming
233 00:43:17,730 --> 00:43:32,070 inside of the data range of 60 days to the right of the beginning of December 2015. So all these highs in here, higher higher higher higher is seeing what
234 00:43:32,340 --> 00:43:44,340 after the market structure break below this low here. All these retracements higher all that did was closing this liquidity void when this void closed in up
235 00:43:44,340 --> 00:44:01,170 here, inside of the data range of 60 days. We had to measure is there all this justified by using a inversely related currency like the euro dollar. Now we can
236 00:44:01,170 --> 00:44:14,940 go and take a look at the lows that we're forming in the euro dollar. Here's 20 days, 40 days and 60 days to the right of the delineation, setting a new marker
237 00:44:14,940 --> 00:44:29,970 for the quarterly shift. Look at the lows here in the Euro dollar all the way up to the 60 day data range. The lows were higher in the Euro dollar said this was
238 00:44:29,970 --> 00:44:39,570 under what accumulation the underlying which would be traded because we don't trade the dollar index we use it as a benchmark. The underlying is failing to
239 00:44:39,570 --> 00:44:49,980 make a lower low again at the same time that the benchmark is making higher highs by all standards. This looks like bullishness every time and new highs
240 00:44:49,980 --> 00:44:57,150 formed and it looks like it's trying to go higher. All it's doing is inching up to closing this liquidity void that reference point that we talked about at the
241 00:44:57,150 --> 00:45:07,290 beginning of this teaching. This is what it's looking to close As in, it's pressing higher. At the same time, all this higher high business is not being
242 00:45:07,290 --> 00:45:17,160 seen with lower lows in the euro dollar. And it's occurring in between where we delineate a market structure shift here, we go out three months, that means
243 00:45:17,160 --> 00:45:28,380 there's going to be a move that takes place in the next three months. On a daily chart, we're looking for to happen within 60 days of a new calendar month. Tip,
244 00:45:28,380 --> 00:45:41,130 this data range will go out and project that long. The 60 Day delineation nails the very high, so you have a buy in here. And it ends right here after closing
245 00:45:41,190 --> 00:45:55,110 in this void. Okay. So essentially what we're doing is we're framing the market quarterly. And it gives us a context to look at the market modularly. So we can
246 00:45:55,140 --> 00:46:05,520 take the price action, and really look inside of it and look for setups instead of just being lost in the whole grand scheme of things. Looking at the candles,
247 00:46:05,520 --> 00:46:14,430 highs and lows and all that business, you have to understand there's a rhythm. And there's a there's a method behind how price is delivered. Even on a daily
248 00:46:14,430 --> 00:46:24,600 chart like this, every three months to four months, there's going to be a shake up in the market, there's going to be a sentiment shift, there's going to be a
249 00:46:24,600 --> 00:46:33,030 change in trend. Okay, there's going to be excitement and check injected into the marketplace to cause interest in a specific asset class, especially if it's
250 00:46:33,030 --> 00:46:41,760 an asset class that's been dormant for a while and hasn't been traded at much. They tend to take those markets and shake them up. So by looking at the market
251 00:46:41,760 --> 00:46:50,940 and breaking it down like this, it gives us a great deal of context. It's specific, it's measurable, it gives us a very clear indication of what we're
252 00:46:50,940 --> 00:47:04,530 doing and how how long it should take the form. And in looking for the signs to create these setups. You can see here at the lows, we had a market structure
253 00:47:04,530 --> 00:47:16,680 shift that was bullish on the dollar index, we had these highs in here, taken out on the upside. So no highs were violated on the upside prior to this high
254 00:47:16,680 --> 00:47:26,220 here on the daily. So institutional order flow broke to bullishness here, because of the shift in market structure. The markets trading lower here. Okay,
255 00:47:26,250 --> 00:47:32,400 now we have another divider, okay at June 1 2016.
256 00:47:33,630 --> 00:47:43,440 So all you're doing is adding another vertical line. Once you have one, you go out in time you add these individually. Okay. Now you can calibrate them as you
257 00:47:43,440 --> 00:47:50,670 see fit based on what the markets doing. But I'm going to resist the temptation to calibrate it based on this market structure shift here. Because you could do
258 00:47:50,670 --> 00:48:02,670 the same thing here. Once this market structure breaks bullishly here, you can go back to May 1 and use that as your delineation, and then start going 20 days,
259 00:48:02,700 --> 00:48:10,770 40 days, 60 days to the right of it, okay, and then draw another vertical line every three months or so. And that will be the same thing to be accomplished
260 00:48:10,770 --> 00:48:17,400 here. But I want to keep everything as it is here because I don't want to do any more than necessary to teach this specific principle because we're going to
261 00:48:17,400 --> 00:48:27,180 build on it as we go through January's content. But I want you to take a look at what this is done. We have a low here on the dollar index, we have a low here on
262 00:48:27,180 --> 00:48:34,890 the dollar index that's lower and we have another lower low on the dollar index after the market structure has broken to the bullish side. So once we have an
263 00:48:34,890 --> 00:48:45,420 interruption and the down move, okay. Notice also it's been essentially six months of down movement on the dollar. That's about when you're going to see the
264 00:48:45,450 --> 00:48:53,490 shake up that takes place and is also going to be a seasonal influence that we're going to talk about in January as well. But for this movement here, I want
265 00:48:53,490 --> 00:49:00,960 you to take a look at the relationship of how the dollar makes these lower lows in here. Let's go back to the Euro dollar at the same time. Let's see what was
266 00:49:00,960 --> 00:49:15,660 going on around June of 2016 in the euro. Well, we're not seeing that higher high that would be reasonably expected. As we saw lower lows and dollars go back
267 00:49:15,660 --> 00:49:29,310 again. We have lower lows in the dollar. At the same time we should be seeing higher highs in the euro dollar. It's not happening we see a higher high here
268 00:49:29,370 --> 00:49:40,560 but you have to look at every institutional reference point. We have an old high back here. Relatively This is not higher. It's actually lower. This is a market
269 00:49:40,560 --> 00:49:49,470 is heavily being distributed. This market run up here is just a run on bias I liquidity taking the bias stops out on short players already and then the market
270 00:49:49,470 --> 00:50:03,540 trades lower in between the vertical lines to delineate the next market shift Okay, there's a quarterly shift that takes place every three or four months. And
271 00:50:03,540 --> 00:50:13,920 you can see that these smart money accumulation and distribution programs are very easy to see in price action, but you have to define it in such a way where
272 00:50:14,130 --> 00:50:25,290 you now look for it to occur. Also notice, and I'll leave this for your own personal study, how many days away to the right of this counted start, because
273 00:50:25,290 --> 00:50:37,140 this high form, I'll leave that for your personal study. Also, counsel you to take a look at this day right here. This is the election, okay? Even on the day
274 00:50:37,140 --> 00:50:52,260 of the election, there is exactly out to 60 days, to the right of up here, 60 days on the empty feet empty for platform nails the very, very high, that gives
275 00:50:52,260 --> 00:51:03,210 us the sell off. So initially opened up, traded higher on the Euro dollar, and then rejected and traded aggressively lower, this higher high. Again, here's the
276 00:51:03,210 --> 00:51:16,500 old high is higher high, is not being seen. With a lower low in the dollar index. So dollar is being accumulated, the underlying strength is in dollar
277 00:51:16,830 --> 00:51:29,100 can't go lower. And the Eurodollar only went higher to take up the buy stops, they're going to reject that as false strength, which is suspect rally, and the
278 00:51:29,100 --> 00:51:38,250 price moved lower as a result of it. So I want you to go through this notes, this is going to require you a lot of thinking. So that's why I said this month
279 00:51:38,250 --> 00:51:46,800 is going to be a lot of information. That's why you have to have a video recording every single day. And they have to be pre recorded. If I do any live
280 00:51:46,800 --> 00:51:55,080 sessions, this entire month of January, there's no way I have enough time in the day and also live my own personal life, to be able to complete all the things
281 00:51:55,080 --> 00:52:05,010 it's necessary to cover long term analysis and have it all encapsulated in the first month of 2017. And then can't framework going forward. So go through the
282 00:52:05,010 --> 00:52:16,230 notes on this one, again, go through your charts also using it as well. And again, in summary, all you're doing is you're looking for a obvious break, and
283 00:52:16,230 --> 00:52:25,590 shift in the marketplace, like this was one here. Okay, the market trades higher. And if we were looking at the market and February,
284 00:52:27,390 --> 00:52:38,130 we could go back to January 1, and put our marker there, and then go out 20 days, 40 days, 60 days, and you'd get something here, we're looking back and see
285 00:52:38,130 --> 00:52:46,680 where the liquidity is resting, you're looking back to find what liquidity is. And you're looking forward or to the right of it. To get the very next setup. In
286 00:52:46,680 --> 00:52:57,360 terms of the data range, you're going to know how long it takes potentially before the next setup forms. And how far back you look for the liquidity
287 00:52:57,360 --> 00:53:05,730 reference points for where the stops are on above or below the loads and where the liquidity voids and gaps are that you want to be referencing. So it gives
288 00:53:05,730 --> 00:53:13,080 you context. And believe me, we're gonna have lots of examples of this for January's content, but for the most part, I want you to look at the market in a
289 00:53:13,080 --> 00:53:22,560 quarterly basis. I want you to be able to calibrate your market shifts, okay, on a quarterly basis, how it's been defined in this video. And regardless of where
290 00:53:22,560 --> 00:53:41,520 you're at in time, like for instance, say it was November 14 2016. What month would you calibrate your vertical line to to start. If he said October 1 2016,
291 00:53:41,550 --> 00:53:48,120 you're accurate, you're correct. If he said anything other than that you're wrong. Okay, you want to go back to the previous close month, you want to go
292 00:53:48,120 --> 00:53:56,130 back one full calendar month where it traded from the first trading day to the last trading day and then created a new month. By doing that you calibrate
293 00:53:56,130 --> 00:54:05,220 yourself that way you'll be able to see what it is doing reference wise. And then you start walking forward from there. When you see an obvious change in
294 00:54:05,220 --> 00:54:15,000 trend, which we saw up here, we have a market structure break here bearishly for the euro, all this rallying up is just another attempt to do what we saw
295 00:54:15,030 --> 00:54:24,870 happening. In the dollar back here, when you had a market structure break bearishly it traded higher up the closing void and then sold off. The same
296 00:54:24,870 --> 00:54:36,360 things this being seen here. Market structure break here, Mark comes up, take out buyside liquidity and underlying weakness seen here. The heavy distribution
297 00:54:36,540 --> 00:54:46,410 and as the market goes lower as a result of it. Again, we'll touch more on this as we go through the content throughout the year. But for January, we'll touch
298 00:54:46,410 --> 00:54:54,060 more on this because I'm quite sure while your gears are turning now and you're probably really excited about what you're seeing. Some of you invariably are
299 00:54:54,060 --> 00:55:01,530 going to want to send me emails. I didn't understand this. I didn't understand that. Don't do that yet. Hold off on sending you emails and wait and see if the
300 00:55:01,530 --> 00:55:07,170 content doesn't answer your questions by the end of this month till the next video I wish you good luck and good trading