52-ICT Mentorship Core Content - Month 5 - Defining HTF PD Arrays

Last modified by Drunk Monkey on 2022-09-17 07:50
1 00:00:17,190 --> 00:00:24,570 ICT: Welcome back, folks, this is lesson 6.1 of the January 2017, ICT mentorship, defining high timeframe PD arrays.
2 00:00:30,239 --> 00:00:38,729 Okay, when we look at a chart, regardless of what time frame we're looking at it, there's two elements that come to mind as a trader, obviously, we think in
3 00:00:38,729 --> 00:00:48,179 terms of support or resistance, or we think in terms of volume oversold, we think in terms of price patterns, secondary, but generally, we think of the
4 00:00:48,179 --> 00:01:00,809 price being valued, too low or too cheap, or expensive or too high. And the algorithm has similar thought processes built into it. And we look at it in the
5 00:01:00,809 --> 00:01:11,609 form of a premium and a discount market. For the sake of discussion, just think of this red line at the top as a resistance, and a blue level in the bottom
6 00:01:11,969 --> 00:01:21,899 being supported. As price starts to move away from a level that would be viewed as too cheap or support, naturally, our expectations as traders, we expect to
7 00:01:21,899 --> 00:01:32,999 see price move higher. When it does this, we're confirmed to see a response moving up to a resistance point of some kind. Now the problem is with retail
8 00:01:32,999 --> 00:01:42,389 trading, and with technical analysis as a whole. By itself, it doesn't help you. Because every one of us could come to the conclusion that a specific level above
9 00:01:42,389 --> 00:01:52,289 current price action would be a resistance level, someone will see it as a an old loader will be trading to someone was we'd see in Ohio, some of us would see
10 00:01:52,529 --> 00:02:04,619 something else that would equate to a resistance level. Now, to remove all the ambiguity, you have to have a mindset going into it. And this teaching is to
11 00:02:04,619 --> 00:02:13,589 teach you the heirarchy on the tools that I use for framing the trades. Now these same arrays are the same things that we've talked about since the
12 00:02:13,589 --> 00:02:22,109 beginning the mentor ship, but we're going to prevent you from having them in a dis organized fashion. In other words, there's an heirarchy and how they are
13 00:02:22,139 --> 00:02:33,749 used and how you look for them in price. is priced makes a retracement lower from a support level. How far does it usually retrace back? All of us again
14 00:02:33,779 --> 00:02:41,159 based on different walks of life, technical analysis and different disciplines will all have a different conclusion. Some of us will use a Fibonacci some of us
15 00:02:41,159 --> 00:02:52,199 would use some fashion of support and resistance. Some of us would use Elliott Wave and ratios and harmonic patterns all kinds of things would come by way of
16 00:02:52,229 --> 00:03:00,119 discussion. If we were in a roundtable meeting, we're all sitting in the same room together. We all have different opinions about how far it would retrace,
17 00:03:00,329 --> 00:03:09,539 some of us wouldn't have even expected a retracement. Okay. Some of us would not see this as a retracement but a beginning of an all out reversal to trade below
18 00:03:09,539 --> 00:03:20,219 the old low. That's the problem every trader is plagued with when they come into this business. Who's right? Who has the means of knowing with great deal of
19 00:03:20,219 --> 00:03:29,339 prognostication, what is a support level and what is the resistance level. And therefore, what will propel price away from current market action higher or
20 00:03:29,339 --> 00:03:37,439 lower? Because the common adage is, if I knew where price was going next, I wouldn't need to know anything else, I'd make money. That's not true. Because
21 00:03:37,439 --> 00:03:45,569 you would find some other way to lose money over leveraging or, or doing something different you shouldn't be doing and you'll break a rule. And you'll
22 00:03:45,569 --> 00:03:57,209 get emotional or psychological impact because of that, and you'll end up blowing the account. So when we look at charts, we want to be viewing price in terms of
23 00:03:57,209 --> 00:04:05,699 are we in a premium? Or are we in a discount market. Earlier in the mentorship? I taught how you could do that. But we're gonna talk a little bit more in terms
24 00:04:05,699 --> 00:04:18,149 of how to frame that on higher timeframe charts in the form of an heirarchy with the Erase. As price starts to retrace, and then moves higher, it hits a level of
25 00:04:18,149 --> 00:04:29,279 resistance. Now for the sake of discussion, we're going to say we collectively understand what would deem a resistance level to remove all the secondary
26 00:04:29,579 --> 00:04:37,049 discussions that we could have if we were a front in front of one another in the same setting in a live setting where we could literally could shake hands and
27 00:04:37,049 --> 00:04:46,679 talk. All of us would have an opinion about what would constitute a resistance level. But we're going to say that this level it's noted as red that is the
28 00:04:46,679 --> 00:04:56,849 commonly agreed upon resistance level. The reasonable expectation would be to see price move away. And then price does that. Some of us will expect one more
29 00:04:56,849 --> 00:05:05,399 try to get to that level. Maybe go through it or to fail. That's how I trade as I expect to see price react. Some of us would not even expect that they would
30 00:05:05,399 --> 00:05:09,449 expect this one time, punch up air and all the other all new reversal.
31 00:05:10,830 --> 00:05:19,830 This is the type of setup I like to see here, another pass towards that old high. Either it's going to give me a run through or false break, or it's going
32 00:05:19,830 --> 00:05:29,700 to give me a failure swing. We talked about classifying institutional price swings. That's what we've done. For that teaching. Here, I want you to start
33 00:05:29,700 --> 00:05:39,030 thinking in terms of premium and discount on higher timeframe charts, because the heirarchy on how you view this is going to help you whether you're you're a
34 00:05:39,030 --> 00:05:48,810 day trader or scalper position traders, short term trader, with the expectation of lower prices, how far we expect to see price go down, well, the first impulse
35 00:05:48,810 --> 00:05:59,160 leg and then retracement, then as the second leg higher hitting that resistance level, that secondary impulse leg, that's probably going to be a good reasonable
36 00:05:59,640 --> 00:06:09,600 expectation for support level. Now it could be a bullish order block, it could be a, an old short term high in there on a lower timeframe. If this was a a
37 00:06:09,600 --> 00:06:20,100 monthly chart, at that low, there may be a daily short term high that would create a a support level that can't be seen on a monthly chart. So when we're
38 00:06:20,100 --> 00:06:29,760 looking at these higher timeframe, charts, just understand that there's going to be levels that exist inside of larger price swings that you may not see unless
39 00:06:29,760 --> 00:06:36,150 you go down to the lower timeframe. Now when I say lower timeframe, I'm only referring to the daily because of higher timeframe analysis is all we're
40 00:06:36,150 --> 00:06:45,360 focusing on here. Nothing below a daily chart. So for assuming that this is a monthly chart, and we're looking at price, the expectation is is okay, well, at
41 00:06:45,360 --> 00:06:55,800 that old low, we would expect to see some lower timeframe support level, Nick, again, it could be the monthly bullish order block, it could be a weekly bullish
42 00:06:55,800 --> 00:07:05,790 order block, or it could be a daily short term high, you may not be able to see it inside that, that little low there. But nonetheless, when we look at price
43 00:07:05,790 --> 00:07:14,400 swings back and forth on a chart, whether it be monthly, weekly, or daily and even lower timeframes, you have to understand that there are swings that exist
44 00:07:14,670 --> 00:07:25,020 and support levels and resistance levels, they exist in the lower timeframes that may not be so apparent using these higher timeframe charts. That is not
45 00:07:25,410 --> 00:07:34,500 what you base the majority of your trades on, what you're gonna be doing is you're gonna be using the monthly chart and the weekly chart to frame the
46 00:07:34,500 --> 00:07:45,630 context of what that market should be doing using these PDA arrays. So if we watched price, and it continues to trade higher here, where would you reasonably
47 00:07:45,630 --> 00:07:56,160 expect to see price trade to that short term little swing low at the failure swing? That's going to be what a potential mitigation block, it means any orders
48 00:07:56,160 --> 00:08:05,970 that were used to go long, but failed to make another pass at that old high. They're underwater now. So they're gonna look to mitigate those losses, and
49 00:08:07,350 --> 00:08:16,230 cover their long positions and go short, potentially, or just get out of the trade. But smart mind just doesn't cut losses, they know what they're doing.
50 00:08:16,560 --> 00:08:25,650 They scale and scale out in the hedge. So this would be another selling opportunity. The market seeks liquidity below the low and below the second
51 00:08:25,650 --> 00:08:35,490 impulse swing prior to the run into resistance. So it seeks liquidity below the marketplace. Once it takes that liquidity out, it can drive all the way down to
52 00:08:35,490 --> 00:08:47,760 that old support level. But generally it doesn't. It will retrace again and pick up more orders back at an old low. Where we'd see another opportunity to sell
53 00:08:47,760 --> 00:08:57,000 off and take out to liquidity below a short term lead that was just created and back down to a logical area of support. The expectation would be what the C
54 00:08:57,000 --> 00:09:05,610 price bounce price does this. When price starts to retrace, again. Some of us if we were all in the same room, we'd expect to see that price low to be violated
55 00:09:05,610 --> 00:09:15,540 and a new low created. Sometimes that will happen. Sometimes it won't. This failure swing in here could be used to set up another long opportunity for price
56 00:09:15,540 --> 00:09:24,570 rallies in the here's the million dollar question. The understanding is how price moves from one level to the next. But predominantly it's moving from a
57 00:09:24,570 --> 00:09:36,420 level of discount to a level of premium from a level of premium to a level of discount. Between the red line and the blue line. They are extremes in the
58 00:09:36,420 --> 00:09:49,530 middle. That's classified as equilibrium or balance. Buying imbalance is seen when price gets above equilibrium, or up into that red level which would be
59 00:09:49,530 --> 00:10:01,020 resistance. Selling imbalance would be when price gets below equilibrium and down into the blue line or what would be just drived as discount So where would
60 00:10:01,020 --> 00:10:04,890 you expect to see price go next. That's what you're always faced with.
61 00:10:05,309 --> 00:10:18,569 When you sit down in front of the charts. This discussion, we're going to use the common ICT tools as far as setup parameters in the form of the way they form
62 00:10:18,629 --> 00:10:25,589 on charts. In other words, the order in which they form and how they use them based on wherever you're at in terms of the marketplace.
63 00:10:31,769 --> 00:10:41,369 We're using this teaching as a foundation, that's going to lead us into a better understanding of this example, we showed were discussing money management for
64 00:10:41,369 --> 00:10:54,299 the January content. So lesson five, that example for the dollar yen pair for a long term position trade. This idea will be used as an example on framing PD
65 00:10:54,299 --> 00:11:04,769 arrays on higher timeframe charts. But before we get into that teaching, for 6.2, we have to do the foundation understand what we look for and why we expect
66 00:11:04,769 --> 00:11:20,879 it to unfold like we would. Okay, again, using our thought process of premium, which it'll be the red line, and discount, which will be the blue line. When you
67 00:11:20,879 --> 00:11:29,369 look at charts, you want to see where price has moved away from an old high, and it's dropping down from an area of premium, where it's, it's too it's too high.
68 00:11:29,489 --> 00:11:38,099 So the valuation is going to be reduced and dropped lower. So repricing takes place, and the market goes down, and the price goes lower as a result of it
69 00:11:38,549 --> 00:11:46,499 until it gets to a point where it's too much of a discount, then there has to be a premium built into it. The algorithm will do this moving price back and forth,
70 00:11:46,499 --> 00:11:54,779 back and forth, back and forth until again, something of significant impact comes to the marketplace and drives the market one sided, and it creates a
71 00:11:54,779 --> 00:12:06,269 strong imbalance. Otherwise, the market is going to gyrate back and forth looking for liquidity based on premium and discount conditions. We'll assume for
72 00:12:06,269 --> 00:12:15,299 a moment, right now the market price is here. Okay. And we can clearly see that the market in recent times had a clear discernible level of resistance, and a
73 00:12:15,299 --> 00:12:22,649 clear discernible level of support. Now that can come in the form of bullish and bearish order blocks. Or it could be just old highs and old lows. And we'll just
74 00:12:22,649 --> 00:12:33,689 use all highs and lows as an example for this discussion. Your expectation is is right now price is at a level where it should, by all standards move lower
75 00:12:33,689 --> 00:12:44,159 because it's at a classic viewed resistance level. We don't know how long that time is going to be required. Before the market does, in fact, submit to our
76 00:12:44,159 --> 00:12:55,739 expectation and see a lower price. So that timeframe, okay, that part is what you're always gonna have to submit to time is a murderer. It's a killer for
77 00:12:55,739 --> 00:13:03,029 traders, unless you know that some of these ideas are going to pan out for a long, long time, you're going to do a lot of things psychologically and
78 00:13:03,029 --> 00:13:09,719 emotionally that you wish you wouldn't have done. Because you haven't submitted to that that time aspect of trading. There's two two elements in trading, you
79 00:13:09,719 --> 00:13:18,419 have to submit to time and price when they both agree with one another. And you have waited for that agreement to come to fruition. That's where profitability
80 00:13:18,419 --> 00:13:28,919 and opportunities are. So we're looking at price. And we have no idea how long time is going to be required of us to wait before the displacement takes place.
81 00:13:30,119 --> 00:13:39,509 But eventually, our expectation is we'll see lower prices down to a level of discount. And that's what we're expecting are forecasting as a future price. In
82 00:13:39,509 --> 00:13:49,199 between these two prep reference points. Again, time and price is what's essential, you have to submit to the level of time, which no one knows how much
83 00:13:49,199 --> 00:13:58,499 time is going to be required before your setup pans out or goes to profitability. Price is what you're studying. you're submitting to time
84 00:13:58,499 --> 00:14:07,469 throughout the process. But while you are in the trade or expecting this to unfold, studying it, you're submitting to the price. You know what you're not
85 00:14:07,469 --> 00:14:15,869 trying to force your will on price, you're analyzing price to see what it is it's telling you in terms of institutional order flow, is it justifying your
86 00:14:15,869 --> 00:14:25,349 expectation that it wants to go down to that discount level or some bullish order block to buy back off of income or short position or could be a Oh loaded
87 00:14:25,349 --> 00:14:34,019 once a run below that future price could be a number of things. But for now, we're just going to aim for an old low between the market price today and the
88 00:14:34,019 --> 00:14:42,029 future price which you anticipate or forecast lower in the future. There's going to be zero opportunity for it to be a straight line. In other words, you're not
89 00:14:42,029 --> 00:14:51,959 seeing that diagonal line in the way the market trades it just doesn't do that is always some give and take that takes place. So understanding where certain
90 00:14:51,989 --> 00:15:02,279 arrays occur in that process will help you number one, stay with the trade idea, not be shaken out of it and have the confidence to hold until the objective is
91 00:15:02,279 --> 00:15:11,639 met or your stock gets taken in this simply move into a next opportunity, the opposite is seen. When you're looking for a bullish scenario,
92 00:15:13,469 --> 00:15:21,929 everything's just reverse. You expect at market price to be in the future at a premium. And of course, it's gonna be harder than it is today. Again, you have
93 00:15:21,929 --> 00:15:32,249 no idea how long time is going to be required to get to your future price or forecasted price. And you have to submit that and measure of time it is an
94 00:15:32,309 --> 00:15:40,019 unknown, you can't know for certainty how many days or how many hours or, or how many months it will be before that price is actually arrived at or if at all.
95 00:15:41,369 --> 00:15:51,239 But you also have to be studying price. And again, monitoring and studying the PD arrays that occur in price action that leads to supporting your expectation
96 00:15:51,239 --> 00:16:01,679 on institutional order flow that would drive price up into that premium level. The understanding is that price will move from a discount to a premium. Because
97 00:16:01,709 --> 00:16:10,589 the discount can't stay discount very long price is going to be established by whoever is selling it who who stands to make a profit off of it, while the
98 00:16:10,589 --> 00:16:20,429 central bank is going to be in in the business of adjusting price. So if we know that they are in control of price, ultimately, by way of steering sentiment in
99 00:16:20,819 --> 00:16:31,199 economies through the delivery of an interest rate, long term, to stimulate or to suppress an economy for our country, we have to view the market in terms of
100 00:16:31,199 --> 00:16:41,819 technicals to align ourselves with these ideas. So if we see a level of support, our expectation is Okay, where is the evidence that this thing will go to a
101 00:16:41,819 --> 00:16:49,949 premium market? Where's the premium market, where's the resistance at where's the higher level that I would want to see it trade to between the market price
102 00:16:49,949 --> 00:16:57,359 you're at right now and that future price? Again, it never happens in a straight line, there's time that you have no understanding of exactly how long it's going
103 00:16:57,359 --> 00:17:04,769 to be. But there's also an element of price that you have to study. In other words, just because you think it's going there doesn't mean it's going there, it
104 00:17:04,769 --> 00:17:14,129 could go halfway there and failing go lower. Nonetheless, what we're going to do is I'm going to outline now the arrays and keep them in a specific order. So
105 00:17:14,129 --> 00:17:22,169 that way, you know, wherever you're at in terms of market price, what you would expect to see or what you're looking for, okay, now, what should I be looking
106 00:17:22,169 --> 00:17:32,909 for in order block? Or should I be looking for a gap? What should I look for right now, that's what this teaching is going to do. Okay, for a monthly chart,
107 00:17:33,359 --> 00:17:41,669 okay, what you're going to do is you're going to look at the current trading range that it's in. Okay, and so we're gonna assume that you outlined the
108 00:17:41,669 --> 00:17:48,569 marketplace in terms of old highs and old lows on the monthly. And that's the easiest way of doing it. There's other ways you can do it. But for now, we're
109 00:17:48,569 --> 00:17:59,459 just going to outlines in the context at the most recent trading range that the market has moved from an old high to an old low, that would be our premium and
110 00:17:59,459 --> 00:18:11,069 discount definition. In between these two reference points, the halfway point, this is always going to be referred to as equilibrium. Now equilibrium between
111 00:18:11,099 --> 00:18:20,699 where you think price will go because it's been there before. And where it's at right now, relative to an old Hein old low. That's the current trading range.
112 00:18:20,729 --> 00:18:29,639 And I'll give you an example what that looks like when we go into lesson 6.2. But for now, I want to lay the foundations for what it is you look for. The
113 00:18:29,639 --> 00:18:43,019 first thing above equilibrium in the form of an array is an old high and old low. You want to be looking for that above equilibrium. The next thing that
114 00:18:43,019 --> 00:18:51,239 you'd be looking for and this is in the order of importance, okay? Old High old low. The next thing you'd be looking for as a rejection block rejection block
115 00:18:51,239 --> 00:19:02,549 would be just above the candles body, not the wicks. So the actual high and low is the wick. But then the next area of importance is the rejection block that
116 00:19:02,549 --> 00:19:23,759 would be just above the candles body. Then the bearish order block, a fair value gap. Liquidity void. Bearish breaker and the mitigation block. Put it another
117 00:19:23,759 --> 00:19:33,149 way. If we were at equilibrium, and we were moving away from a premium level or at resistance, in other words, the price has already dropped down. And we
118 00:19:33,149 --> 00:19:42,269 anticipate price going lower down to a level of support or monthly discount. We would be looking for above current market action again, assuming that we're at
119 00:19:42,299 --> 00:19:49,859 equilibrium right now. We would start looking above current market action in the past on the left side of our chart, where's the nearest mitigation block? There
120 00:19:49,859 --> 00:19:52,439 may not be one. Okay, check that off.
121 00:19:53,070 --> 00:20:01,080 Where's the nearest bearish breaker? There may not be one of those either. Okay, check that off. But if there is one, then You would reasonably expect to see
122 00:20:01,080 --> 00:20:09,750 price trade up to that price point to breaker, then expect some selling to go lower. And once it moves below equilibrium, then you would be all set to go to
123 00:20:09,750 --> 00:20:17,460 the monthly discount or support. But let's assume for a moment the mitigation block isn't there. And the breaker isn't there. What would you look for next?
124 00:20:17,550 --> 00:20:28,170 Okay, well, the next order of heirarchy is liquidity void, is there a range that needs to be closed in? Again, that may not be so clear, check that off, no
125 00:20:28,170 --> 00:20:37,500 problem. The next thing is there a fair value gap. Again, that might not exist either. Go to the next thing, bearish order block, that's probably going to be
126 00:20:37,500 --> 00:20:46,740 there. Chances are it's very strong that's going to be there. So what I just gave you, I gave you the heirarchy in which you look for a mitigation block is
127 00:20:46,740 --> 00:20:54,450 going to be first considered before you get to the bearish order block. Because the various water blocks can be really high up in the premium mitigation block
128 00:20:54,450 --> 00:21:05,280 is going to be the lowest mitigation and breakers are basically mitigation blocks. But generally, mitigation blocks can occur lower than breakers. Small
129 00:21:05,280 --> 00:21:13,680 little bounces and bear markets wouldn't be a mitigation block. Basically, a bearish breaker will keep your ability to get to a bearish order block which
130 00:21:13,680 --> 00:21:23,460 will be resting higher up in the premium. When an old high is taken out that down candle right before the second highs made taking an old high or turtle
131 00:21:23,460 --> 00:21:33,570 soup. In other words, that down candle if it's retreated to that's going to be a bearish breaker, that's going to keep you from seeing most likely high
132 00:21:33,570 --> 00:21:42,540 probability that it won't allow you to get to a bearish order block. So whenever you see bearish breakers, just don't expect the bearish order block to be hit.
133 00:21:42,870 --> 00:21:54,120 Okay, because it's going to most likely keep price lower, because it's going to be the most dominant array of all these in here. There is a liquidity void that
134 00:21:54,120 --> 00:22:03,930 will be viewed with there's no breaker and you can close in that range. And it may take you opt into a fair value gap or a bearish order block. But breakers by
135 00:22:03,930 --> 00:22:10,650 themselves even though they're low end on this list. That's the first thing you're going to encounter. Because if you're at equilibrium, and price has
136 00:22:10,650 --> 00:22:20,040 already been moving away from a resistance level, you're looking up now for any potential areas to resell at. First, when you look at the mitigation block, or
137 00:22:20,040 --> 00:22:28,470 bearish breaker. And if there's neither of those, you look for liquidity, avoid the trade up into the close in that range. For fair value gap, the close in May
138 00:22:28,470 --> 00:22:34,650 may not be any of that then you would expect to see the bearish order block to be traded to, then that would be your selling opportunity because you're at a
139 00:22:34,650 --> 00:22:43,560 premium and you go to a logical area where institutional order flow would kick in new orders would capitalize and then the selling would ensue if there isn't
140 00:22:43,560 --> 00:22:52,680 an obvious bearish order block, okay. And there's very little times that's like that, but we will talk about that when we get into entry techniques and
141 00:22:52,740 --> 00:23:01,410 concepts. But if there is a lack of bearish order block understanding and what you're looking at currently in market action, because there may be a lot of
142 00:23:01,410 --> 00:23:10,080 wicks something like that may occur, then you would look for a rejection block, which will be just above the body of the candles, do we expect that to be ran
143 00:23:10,080 --> 00:23:19,920 out? And then you'd be really high on the premium there? And then ultimately, a whole whole entire run on the old high? That would be an expectation. Now, I
144 00:23:19,920 --> 00:23:29,580 have here old high No, well, what why would the low be there? Well, if you're on a very low end of a downtrend on a higher timeframe monthly chart, you may be
145 00:23:29,580 --> 00:23:40,560 rallying up to a old low. And if it gets to that old low, even though it's an old low in terms of price, it's really high up in the premium if it's been
146 00:23:40,560 --> 00:23:50,550 rallying a considerable amount of time and price to get to that level. So retreating to an old low. That's resistance, classic understanding. But it may
147 00:23:50,550 --> 00:23:57,600 need to run on an old high as well. So basically, all you're doing is is you're you're just scaling the grade of how much important you're gonna have on each
148 00:23:57,600 --> 00:24:05,490 one of these. So again, in summary, I want you to understand what I'm talking about here. We're not just listening to things we've talked about in in previous
149 00:24:05,490 --> 00:24:18,360 teachings, okay, I'm putting them in an order of significance when you're at equilibrium. Or if you're moving up from Discount. Okay, your expectations are
150 00:24:18,390 --> 00:24:25,920 to look for the very first thing you look for on the list as prices going up. The first thing you're looking to see to encounter, is there any mitigation
151 00:24:25,920 --> 00:24:35,220 block that I got to consider, because that's the first objective. It could be a selling point, then it's a bearish breaker that could set the tone for another
152 00:24:35,220 --> 00:24:44,610 leg lower or stop any rallies on a bullish idea. Then the next idea if you're bullish from a discount, or if you're expecting a new selling opportunity, say
153 00:24:44,610 --> 00:24:48,360 you're at the equilibrium price point anything below the premium.
154 00:24:50,430 --> 00:24:59,970 The expectations and when you're looking up in price for areas where price may go up to it's in this order from the lowest up numbers from mitigation block all
155 00:25:00,000 --> 00:25:11,400 Up to old high or low, that's the order you would expect to see them. Now, the order of importance you know, it's the highest of the premium array is the old
156 00:25:11,400 --> 00:25:22,350 high in old low. That's that's as high as you can get. Then you have rejection block, then you have bearish order block, a fair fair value gap in liquidity
157 00:25:22,350 --> 00:25:28,680 void, bearish breaker and mitigation block, you're going to be looking up. And the first thing you're going to encounter is the first thing on the bottom of
158 00:25:28,680 --> 00:25:37,530 this list. And then you start working your way up that list. The farther you go up in this list, the more deeper you go into a premium market, certain arrays in
159 00:25:37,530 --> 00:25:48,990 here will keep you from seeing the next higher array. In other words, the next institutional order reference point that's listed in here, if you get to a
160 00:25:48,990 --> 00:25:55,230 breaker, chances are, you're probably not going to go higher than that, you will generally get up into close that void. If there's a breaker below a liquidity
161 00:25:55,230 --> 00:26:04,200 void, that liquidity void may stay open, basically, that range may stay open. So they kind of like it's in the order of importance as a trader, when you're below
162 00:26:04,770 --> 00:26:13,980 premium and looking higher up for prices or expecting prices to move higher. That mitigation block, you know, that's the lowest or the most likely what
163 00:26:13,980 --> 00:26:21,450 you're gonna expect to run into first, it doesn't mean that there's one in price action, but you start from that expectation first and you look for it. It's not
164 00:26:21,450 --> 00:26:28,320 there. Okay, what's the next thing you're looking for the bearish breaker, if it's not there, okay, then I'm okay that expect that void to close in dip, but
165 00:26:28,320 --> 00:26:37,620 there may not be a void, it may have been a really systematic and efficient way that it traded lower. And that won't be any void there. So next thing is is
166 00:26:37,620 --> 00:26:45,360 there a gap that would draw a price up into it, if there's no gap, then you go right to the order block. Okay, but the main thing is, if there's a breaker,
167 00:26:45,540 --> 00:26:52,230 forget about closing in the void and forget about getting up to that gap because the breaker is going to take precedence over everything on this list. When
168 00:26:52,230 --> 00:27:02,100 you're below it in terms of market price. If we were anticipating move lower into price into a discount or into a support level, we would expect the very
169 00:27:02,100 --> 00:27:14,580 next PD array to be a mitigation block. Now again, that may not appear in price. If there is no mitigation block, you would expect to see the next PD array in
170 00:27:14,580 --> 00:27:23,790 the form of a bullish breaker. Again, this may not occur or be seen in price action, but this is the order in which you would expect to see as price is going
171 00:27:23,790 --> 00:27:32,820 lower. Looking in the past to the left side of your chart, you'll be focusing on whether or not these arrays appear in price action. Their importance is again is
172 00:27:32,820 --> 00:27:44,100 listed from equilibrium, the expected order of how they're going to be in the price action in the form of a discount. The first one you would anticipate
173 00:27:44,100 --> 00:27:55,710 seeing as a mitigation block bullishly than a bullish breaker, then a liquidity void. Now, if there is a bullish breaker, now again, a bullish breaker is a up
174 00:27:55,710 --> 00:28:08,190 candle between two swing lows, and the most recent swing low would be lower numbers, you're seeing a stop run in the past and the high the swing high that
175 00:28:08,310 --> 00:28:15,960 it forms between the two lows. That up candle is going to be your bullish breaker. So when price comes down, then at the push up candle, you'll find some
176 00:28:15,960 --> 00:28:25,140 support. If you see that in price action, chances are if there's a liquidity void in price, it won't go down to fill that in, it can if it overtakes the
177 00:28:25,140 --> 00:28:39,210 breaker but if it has a breaker anticipate price, not going below the breaker and leaving the void intact. Again, assuming there is no breaker and there is no
178 00:28:39,210 --> 00:28:46,950 void but there is a gap and it may be liquidity void any gap. Sometimes that can occur too. But you would anticipate price reaching down into a fair value gap,
179 00:28:46,980 --> 00:28:57,180 which is this a common little gap or pricing only been delivered on one side of the marketplace. And then the next array would be the bullish order block. And
180 00:28:57,180 --> 00:29:05,310 again, without the breaker, you would expect the void to be filled a gap to be filled trade down into the bullish order block then below the order block would
181 00:29:05,310 --> 00:29:14,460 be a rejection block which is just below the most lowest candle and its body. In other words, if it has wicks long links below it, we're only gonna be looking
182 00:29:14,460 --> 00:29:23,490 for a move just below the body of the candle and that would be rejection block. And then ultimately, the deepest form of discount would be in the form of an old
183 00:29:23,490 --> 00:29:33,060 low or trading down to in a historic high. And like we said when we were talking about the premium market and prices trade up to in Ohio it can also trade up to
184 00:29:33,060 --> 00:29:42,960 a very old long term low and that would both be in the form of a resistance level. So when we look at markets like this, what it does is it gives us a
185 00:29:42,960 --> 00:29:43,650 framework
186 00:29:49,260 --> 00:29:59,160 you can see here, the monthly premium arrays these are going to be focused for primarily bearish premium array trading and always you're gonna be using these
187 00:29:59,190 --> 00:30:14,460 areas What's the frame of trade or look for bullish targets at these levels for monthly discount your bullish discount arrays these are your bullish discount
188 00:30:14,460 --> 00:30:24,120 arrays and you will be looking for these for bearish targets are looking to get long at any one of these based on the current conditions in the market. Now, the
189 00:30:24,120 --> 00:30:33,300 same thing is seen also for the weekly chart, the weekly chart, you're gonna be looking at the same thing from equilibrium up. The first thing you would expect
190 00:30:33,300 --> 00:30:39,540 to see when you're expecting higher prices, are we going to run into a mitigation block? Bearish breaker? If there's bearish breaker, you're probably
191 00:30:39,540 --> 00:30:49,890 not gonna go higher than that. But if there is no breaker, you look for a void to close in. For fair value gap. If there is no fair, fair value gap or avoid
192 00:30:50,700 --> 00:30:59,310 price could just simply trade right up into the bearish order block. And if there is an idea that suggests that there's possibly not a strong bearish order
193 00:30:59,310 --> 00:31:07,140 block there, we would look for a rejection block which is a move above the candles bodies, if there's long wicks that top that market and then ultimately a
194 00:31:07,140 --> 00:31:15,150 run above the old high or return to a historical low. The same things we just outlined for the monthly is seen for the weekly both premium and discount the
195 00:31:15,150 --> 00:31:23,340 same heirarchy and how you would expect to see these arrays occur in price action. This is the way they are seen. And obviously the same thing is said for
196 00:31:23,880 --> 00:31:33,630 a daily chart, nothing's changed the same heirarchy exists. If we're at equilibrium, and that's the current market action price, and we're expecting
197 00:31:33,630 --> 00:31:42,570 lower prices. The first thing we want to look for on the left side of our chart, is there any mitigation blocks or a bullish breaker. If there is anything less
198 00:31:42,570 --> 00:31:52,170 than that breaker probably won't be considered or retreated to. The Breaker has precedence over everything both bullish breaker and bearish breakers. So we're
199 00:31:52,170 --> 00:32:00,360 gonna take a look at an example of all this information with our dollar yen example that we mentioned briefly. And lesson number five money management with
200 00:32:00,360 --> 00:32:08,730 higher time frame analysis using these ideas in 6.2, that lesson will actually give you a real practical example.