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ICT Charter PAM 7 - Supplementary Lesson

Last modified by Drunk Monkey on 2024-02-09 09:33

Outline

00:06 - Reading price charts and overcoming distortion.

- ICT explains that distortion on lower intraday charts is not noise, but rather a result of market dynamics.
- ICT highlights the importance of understanding this concept to avoid misinterpreting market signals.
- ICT used a "track machine" and a rotary phone to trade during the open outcry markets, constantly monitoring the ticker tape for updates.
- ICT taught himself to read the tape by watching the futures market updates every 10 minutes and writing down the highest high and lowest low seen quoted.

04:46 - Day trading strategies and market analysis.

- ICT: Orders placed via phone call, with specific instructions for each trade.
- The speaker recounts their experience as a new trader, struggling to navigate the markets and find liquidity while driving around as a delivery truck driver.
- The speaker learned to prioritize exiting trades when the market is moving in their favor, and to look for liquidity pools to avoid getting stuck in a trade.

08:28 - Market maker sell model and trading strategies.

- ICT explains tape reading and its application to market analysis.
- ICT discusses the importance of monitoring price range and imbalance in the market, particularly during a ramp-up phase.
- In the market maker sell model, smart money reversal occurs after hitting a fair value gap, as seen in the August 31 2019 market review.

12:59 - Price action model and market manipulation.

- ICT identifies a turning point in the market by analyzing the buy side of the curve and identifying the point at which the market maker sell model is pricing in a potential reversal.
- ICT uses the sell side expansion of the market maker sell model to determine the area of previous buying and selling, and to identify potential liquidity providers in the market.
- ICT identifies two distinct price areas in the transcript, despite elongated time frame.
- ICT explains that price action in a specific market is being held within a range, with small micro fluctuations, despite the presence of many candles.
- ICT highlights the importance of identifying the distribution areas and understanding the market dynamics to make informed trading decisions.

21:01 - Crypto market analysis using one-minute charts.

- The speaker analyzes the one-minute chart to identify areas of accumulation and distribution, using the Smart Money reversal and low-risk sell signals to determine when to enter and exit trades.
- The speaker monitors the price action in the previous area of accumulation to identify a low-risk sell opportunity, with the potential for a redistribution sell off roughly equal lows.
- Analyze market maker sell model to identify key price ranges and monitor fluctuations.

24:56 - Technical analysis and trading using one-minute charts.

- ICT masters reading the tape, sees future market moves before they happen.
- ICT explains that the one-minute chart is not noise, but there are periods of distortion that can be perceived by referencing previous areas of accumulation.
- ICT demonstrates how the algorithm distorts charts on lower timeframes, creating a clear directional bias.

29:10 - Tape reading and understanding price action.

- Tape reader understands ebb and flow of micro dealing ranges to predict price movements.
- ICT: Analyzed price action without charts, relying on numbers flashing on a small device to identify highs, lows, and volume.
- ICT: Unlocked chart patterns by filling in gaps with retail understanding, revealing signatures that others miss.

33:38 - Technical analysis and market manipulation.

- Central banks control institutional investors, who are puppets on a string.
- The speaker discusses their trading strategy, which involves identifying and following price ranges based on previous accumulation and distribution of volume.
- The speaker uses candle patterns to identify potential displacement and imbalance, which can create a fair value gap.
- ICT demonstrates how to analyze a one-minute chart by identifying specific frames of reference to understand market movements.
- ICT shows how to use tape reading to identify potential sell signals and create a trading plan based on market maker behavior.

Transcription

1 00:00:06 --> 00:00:15 ICT: Hi, folks, welcome back. I first of all, I want to thank you for your patience and not freaking out and sending me emails or tweets. Where's the
2 00:00:16 --> 00:00:26 lesson number seven price action model supplementary lesson, you said it was going to be on the 30th. I was exhausted, I worked a lot this week for you all.
3 00:00:26 --> 00:00:40 And on the free member level, I just want to make sure I give my best effort to showcase how reading price and reading the tape, which is going to be the topic
4 00:00:40 --> 00:00:53 of this discussion. And how I can do that in real time. So that was the point of the recording so that we can come back and tell you all in charting level, some
5 00:00:53 --> 00:01:00 of the things that I did in those videos that you won't readily pull out, you'll look at what I'm doing. And it won't make any sense. Like it doesn't look like
6 00:01:00 --> 00:01:13 he's falling and he was rules. And I am it's just the chart, one minute, is skewed. And I'll explain in a moment what that means and how you overcome that,
7 00:01:13 --> 00:01:28 or at least how I overcome it. This is that one minute fractal that traded in and went along down in here and sold short up here, and then wrote it down into
8 00:01:29 --> 00:01:40 the equal lows here. Getting on over here. And you guys already saw that in the video. I want to talk a little bit about what I hinted at, in the the YouTube
9 00:01:40 --> 00:01:53 video that I posted this past week. And I dropped a little bit of a gem. And I didn't mean to do it. Actually, I thought it was in a mentorship recording. But
10 00:01:53 --> 00:02:02 I'm glad that I said it so vaguely it really overtop of everyone's head, I'm sure to have no idea what I was talking about. But it's really important. So
11 00:02:03 --> 00:02:13 this is the part where I believe that folks like the quote unquote professionals that say that there's noise on these lower intraday charts. It's not that it's
12 00:02:13 --> 00:02:28 noise. There's distortion. I admittedly, I will grant them that but that's not noise. Okay. I want to build a short little bit of a foundation as to why this
13 00:02:28 --> 00:02:37 is less this lesson so important. When I first started trading, it was during the open outcry markets. That means when we traded the markets, we would call
14 00:02:37 --> 00:02:47 our broker with a push button or rotary actually had a rotary phone when I was training. So that means you would put your finger in a little hole spinning
15 00:02:47 --> 00:02:56 around the face of the phone, let go of it and it would spin back. Yeah, that's what I was trading with. But usually the only Touchstone phone I had was when I
16 00:02:56 --> 00:03:05 was on a payphone stopping in the middle of my route to do any kind of trade or adjust my stop. So the procedure was this. I have a little, quote track machine
17 00:03:05 --> 00:03:15 that I carried around, which was bigger than a smartphone today and had a little aerial antenna, like an old radio when you would telescopic, we pull it out. And
18 00:03:15 --> 00:03:23 I had it more or less duct taped, you know, with a makeshift mount on my delivery truck windshield. So I would look at it like we would look at a GPS
19 00:03:23 --> 00:03:32 unit today. In modern time, I was constantly looking at the bond market in the s&p market. And if I was in a currency or a growing market, I'd have that quote
20 00:03:32 --> 00:03:45 up there too. And I'm just constantly watching it. What I was doing was teaching myself without myself knowing how to read the tape. And when I say reading the
21 00:03:45 --> 00:03:58 tape, what does that mean? It's a skill set that once you understand it, you can literally trade off of the ticker tape on cue, like what's at CNBC, CNBC, it was
22 00:03:58 --> 00:04:09 FF FNC when I was coming up as a trader, but now today it's called CNBC and every 10 minutes at the bottom of the ticker tape, the futures market will give
23 00:04:09 --> 00:04:20 you the updated where it's trading right now. And you can literally watch this every 10 minutes and write down where the highest high and the lowest low you
24 00:04:20 --> 00:04:32 saw quoted, and then you would just keep track of that. Okay, on the floor, floor traders back then, when we would call in our order. We call our broker,
25 00:04:32 --> 00:04:43 wait for the order desk to pick up and then we would say what trading desk we would be on like I would be on each desk at Lindwall doc say would answer the
26 00:04:43 --> 00:04:55 phone Hello Lindwall doc How can I help you? Ah desk please. Hold for one moment. They put you over to H desk. HS Can I have your order? Right away to
27 00:04:55 --> 00:05:05 business they don't like how you do not look at Can I have your order and you have to tell them I'm gonna buy five, December Spoos at whatever price are at
28 00:05:05 --> 00:05:16 the market with a stop at this and limit order this and good till cancel, that means the order is good forever. Okay? Or if you just know it's going to be
29 00:05:17 --> 00:05:28 today's order, you would just say it's only for today nice day order only. They would take a hole for your fill. If it was a market order you'd like buy me now
30 00:05:28 --> 00:05:34 or sell me now. And you tell them I hope for confirmation. They said okay, hold for one second, they put you on hold
31 00:05:42 --> 00:05:55 okay, sir, we sold five, December Spoos at blah, blah, blah, the price. And here's your order number. Any other orders? No, sir. All right. Thanks for that
32 00:05:55 --> 00:06:04 said, you're done. That was the process. You guys are all spoiled, okay, you don't want to click and click and click and you're done. We had to the whole
33 00:06:04 --> 00:06:11 time the markets moving around, we're trying to get a hold of someone, before they can even do all the processes of getting us in or adjusting our stop or
34 00:06:11 --> 00:06:22 getting out. All that stuff was going on at the same time. So it was important to know what the markets were doing from a tape reading standpoint, because when
35 00:06:22 --> 00:06:32 markets started to run, I wanted to be getting out. That way I had time if I'm going along, and s&p were rallying, and I was catching two and a half points.
36 00:06:32 --> 00:06:39 And that sounds silly now today because of volatility. But two and a half points or three points in the morning session. Like that was the that was it like you
37 00:06:39 --> 00:06:49 were getting, that's the full daily range. Anything above three or four was like crazy volatility, and it was moving a lot. But we were making careers on that
38 00:06:49 --> 00:06:59 little bit of movement, that's okay. But nonetheless, wants to start once the moves started taking place. And I was in along and it was rallying up. I was
39 00:06:59 --> 00:07:08 calling my broker, if I felt that I needed to be getting out of it, which at that time was a lot because then once I got profit on my local position, I'd
40 00:07:08 --> 00:07:16 freak out and want to take my profit cuz I was a new trader. But I learned that wanting to get out when the markets are moving in my favor, it presented me time
41 00:07:16 --> 00:07:28 to find a phone, call it wait for the order desk, Jay, just the guy to confirm. And then once I'm out of the marketplace, that's all time and the whole time the
42 00:07:28 --> 00:07:38 markets moving. So that was one of the things that taught me how to exit like I do. And look for liquidity because in the beginning, I didn't understand where
43 00:07:38 --> 00:07:45 liquidity pools were where the market would be drawn to I was just trying to get out while was moving in my favorite because of that condition of having to trade
44 00:07:45 --> 00:07:55 with that huge time and impediment where it was just too much of a barrier to get beyond if you were scalping or day trading and not sitting by some kind of a
45 00:07:55 --> 00:08:04 Coke machine. Now even though I had it, I was driving around to the Baltimore Washington area on a delivery truck, trying to do all that stuff. So what you
46 00:08:04 --> 00:08:15 watched me do this week, you know, plates spinning and annotating charts before it happens in real time. I'm used to that level of nuts. Because I was doing
47 00:08:15 --> 00:08:22 that as a as a route delivery driver filling machines. So in the machines, giving people back their refund, and I'm looking at my quote track the whole
48 00:08:22 --> 00:08:30 time thinking I gotta call this broker and this one moments or dollar 50 back because it got stuck in the machine or whatever. I mean, it was nuts. Okay, so
49 00:08:31 --> 00:08:45 what tape reading was, what was the result of doing all those types of things, I ended up becoming a good tape reader. And talking with real floor traders from
50 00:08:45 --> 00:08:58 the bond Pit and the Spoos pit s&p market, I had the privilege to meet real traders on the floor. And they more or less explained to me how they did this.
51 00:08:59 --> 00:09:07 And I'm gonna explain to you but you're going to be able to see it graphically. Okay, and then I'll make a lot more sense. Many times you'll see me put in
52 00:09:07 --> 00:09:15 examples on Twitter. And I'll say hey, like what do you see? Do you see the market maker sell model? Do you see the market maker by model? Invariably?
53 00:09:16 --> 00:09:26 Everyone has their boxes painted on in different places? And it doesn't make any sense? Okay, what they're trying to do is just make something look similar to
54 00:09:26 --> 00:09:37 the overall model. So that way I'll either like that tweet, or I'll comment on it. And I generally try to avoid it because most of the time they're drawing it
55 00:09:37 --> 00:09:47 wrong. And I'm going to show you what it looks like right now. This is the actual one minute chart and then what tape reading does it gives you clarity
56 00:09:47 --> 00:09:59 okay? So it's gonna require a little bit of one screen photoshopping okay and what your heart just skipped a beat did I knew it I see to Photoshop that out.
57 00:10:00 --> 00:10:06 was trying to figure out how I can communicate this to you and show it to you in a visual representation of what goes on in my mind. So it's gonna make a whole
58 00:10:06 --> 00:10:16 lot more sense to just trust me come along with me. But in meanwhile, everyone should see the be able to see the consolidation here. Okay? The original
59 00:10:16 --> 00:10:28 consolidation, we had the displacement, come back into the order, block, villainess, Bisi, buy it, buy stops above here, run, boom, get out sell short.
60 00:10:29 --> 00:10:37 The draw was this level, as I mentioned in the review, just a little while ago, same day today, August 31 2019, you will see that that's a fair value gap up
61 00:10:37 --> 00:10:46 here on cable. Okay, so this watch the recording of the market review on August 31 2019. If you're seeing this video later on, that's what this level is okay,
62 00:10:46 --> 00:10:57 so I don't want to drive too much more information around it than what's necessary, I don't want the video to be longer than it needs to be. So using the
63 00:10:57 --> 00:11:05 market maker sell model, you could be a buyer on the buy side of the curve buying here and distributing your long and looking to go short at the smart
64 00:11:05 --> 00:11:17 money reversal. Low Risk sell is over here. Now where in all of this, are you going to draw your box for the distribution cycle? The little red boxes that
65 00:11:17 --> 00:11:28 usually get painted on before they run down and take out the coalos? Where do you draw that and all this? You see what makes it confusing? Not Yeah. This is
66 00:11:28 --> 00:11:39 the part that people like at Goldman Sachs, and UBS, and all the other guys that are quote unquote, institutional traders. They don't have the visibility,
67 00:11:40 --> 00:11:50 because they're looking at depth of market. They're looking at other things, okay. And they're looking at their own order flow coming into their desks. I'm
68 00:11:50 --> 00:12:01 going to show you what really is going on from an interbank level today. Okay. So forget time. Forget that format, I'm going to bring that in in a moment. But
69 00:12:01 --> 00:12:16 think about the range. The price range itself, that's what I'm monitoring, okay. When price ramped up, from this level here to here, it did so in less than 10
70 00:12:16 --> 00:12:27 minutes, because each one of these candles is one minute candle. This imbalance and it runs up into that consequent encroachment. Also inside of the area, where
71 00:12:27 --> 00:12:40 on the mean put the vertical line in here so you can see it. This is the highest point. See, there's the highest point in the run up. So in this market maker
72 00:12:40 --> 00:12:52 sell model. All this is on the buy side of the curve. Smart Money reversal after hits a PDE array or premium array in the form of the fair value gap, as I
73 00:12:52 --> 00:13:03 mentioned in the market review for August 31 2019. Look at the cable portion of that video. And that will unlock with this level is here. Then we have
74 00:13:03 --> 00:13:15 distributional downside. We wait. What are we doing? We're waiting to sell short. Well, I sold short right in here, knowing that this is likely to be a
75 00:13:15 --> 00:13:24 turning point, not coming back up to this level here because that would be what everyone else expects to thinks they understand order blocks. Look at this down
76 00:13:24 --> 00:13:37 close candle right in here. It's not likely to expand outside of this down close candle. Let me show you what that looks like. So as I'm watching price, in cable
77 00:13:37 --> 00:13:47 this particular day, I know that this buy side of the curve, this is a point at which they're going to mitigate on the left side of the smart money reversal.
78 00:13:47 --> 00:13:57 Remember, all this is pricing in just to go lower. That's the market maker sell model. So price action model number seven, focuses on the sell side expansion of
79 00:13:57 --> 00:14:08 this model. I zeroed right on that point right there because it was inside of this range. And it's the consequent encroachment of the single down close candle
80 00:14:09 --> 00:14:19 midpoint inside of this range here because everything we move back up into this candle here this should be selling here in this area between these two candles
81 00:14:19 --> 00:14:36 bodies there should be selling off in here too. But where is it in here like this, you can understand using this candle. We're carrying it all the way to the
82 00:14:36 --> 00:14:45 other side of the curve on the model. So we're carrying that area of previous buying. They took it down below it so now we're going to mitigate the need to
83 00:14:45 --> 00:14:53 mitigate in here. So anything short they're on and they're off side they have to get off of it. As it runs up. That gives it the gives them a chance to get out
84 00:14:53 --> 00:15:02 of there long and now go short offering liquidity as a Counterparty for the new market participants that have are trading at the market right now. Or there may
85 00:15:02 --> 00:15:13 be transactions that are coming in from a commerce level, a business global entity, Microsoft, Adobe, some country that's working internationally, you know,
86 00:15:13 --> 00:15:23 they're going to move their order in based on this area here. But they're going to try to price that transaction. Unless the customer puts in variables that
87 00:15:23 --> 00:15:35 they don't want to go beyond. They will work that order flow, and then do all their transactions with that. That's what the bank traders do. If the is pricing
88 00:15:35 --> 00:15:40 back to this level, so they can do those types of things. Secondly,
89 00:15:42 --> 00:15:56 now we have all of this extended range. And it's a time range that distorts the model, and it keeps people from seeing it. This is the part that took me forever
90 00:15:57 --> 00:16:09 to figure out, but once I got it, it was game set, match. No timeframe eludes me now. Okay, so we have all of this price range in here. Alright, so we have an
91 00:16:09 --> 00:16:18 order block here, and then we have an order block here. And then we have an order block here, we can be a seller, here, a seller here, a seller here, a
92 00:16:18 --> 00:16:34 seller here, you see what I'm saying? Forget all that. Forget all that. Okay? This entire range here to here is skewed. It's completely skewed. There's
93 00:16:34 --> 00:16:46 actually two portions of price action in here. There's two distribution, areas where the market goes up, the sell off and goes down, goes up here sells off and
94 00:16:46 --> 00:16:58 goes down again. But you cannot see it readily because of all this elongation. Because of time. This is why I stressed the fact that the time element, the
95 00:16:58 --> 00:17:13 chart, that's not the reason that makes the market go anywhere. Okay. It will hold price in this window or range in price to facilitate trade. What do I mean
96 00:17:13 --> 00:17:29 by that? If we go in, look at this little area right in here. This is a distribution. area. Usually this will be like a red box in the market maker sell
97 00:17:29 --> 00:17:39 model. And then the other one is here. Oops might not have been able to get that the right way.
98 00:17:50 --> 00:17:51 Yellow ones here.
99 00:17:56 --> 00:18:11 Okay, now why? Why is it this area right here? Why am I picking this little area yet? Of all this stuff? Why is this in this the areas I'm focusing on. Because
100 00:18:11 --> 00:18:14 if you look at where we were in terms of the range, this is the range high here.
101 00:18:26 --> 00:18:26 And then we have
102 00:18:33 --> 00:18:44 the low right there. Okay, so this is our dealing range. If we looked at just a one minute chart, very, very disorienting, it's hard to make any sense out of
103 00:18:44 --> 00:18:54 that, unless you know what you're looking for. So we have an area distribution here. And we have an area distribution here in terms of price range. Okay,
104 00:18:55 --> 00:19:09 distribution distribution. So if we return up into this area, like we do here, this is your cell. So you can see a distribution cycle, which is low risk cell
105 00:19:10 --> 00:19:24 redistribution. And then once we come out of the bottom of that rating here would be your second red box. So it's usually the gray box, a red box, a red box
106 00:19:24 --> 00:19:36 and it might be another distribution cycle and be here and then plunges down and clears the original consolidation sellside liquidity if you can see the price
107 00:19:36 --> 00:19:43 range, okay, that it's been held in here. I don't care about all these candles. I'm not looking at what's an up close and down close. I'm looking at we made the
108 00:19:43 --> 00:19:58 range high here. And the body of this candle is there at 2282. So I'm watching when price breaks below that it does so here on this candle and then we return
109 00:19:58 --> 00:20:09 right back up into This distribution area. So what we have to do is completely ignore this is very tricky. And now it's going to be seeing like, oh man, he
110 00:20:09 --> 00:20:18 just went way off the deep end. Now, I don't know what I'm talking about. Or you don't know what I'm talking about rather, trust me, give me a moment and flesh
111 00:20:18 --> 00:20:28 it out a little bit more. But if we didn't have all of these candles, and we just had this portion of price action, bump up to the bottom of this in this
112 00:20:28 --> 00:20:41 area here, it would look more like a standard market maker sell model. But because price has been held in this range on a one minute basis, every candle
113 00:20:42 --> 00:20:52 price hasn't moved, price hasn't moved, price hasn't moved, price hasn't moved, price hasn't moved, I mean, it's moving very small, very micro fluctuations. But
114 00:20:52 --> 00:21:04 it's basically staying inside of a specific range in the range is inside of these previous buy areas, by areas. And now they're mitigating, and mitigating
115 00:21:04 --> 00:21:13 and holding it giving them a chance to get short build their short positions to build a short position. The fact that we're looking at the the element of time
116 00:21:13 --> 00:21:26 through the scope of one minute candles, it will skew the information. That's why generally 15 minute charts and 60 minute charts are much more refined in
117 00:21:26 --> 00:21:35 terms of looking at the market maker some models and by models. Not that you can't see him like I've shown you here on this one minute chart, but you have to
118 00:21:35 --> 00:21:48 visually see what's going on. So that aspect of tape reading comes in like this Smart Money reversal here low risk, so then we have a period of distribution. In
119 00:21:48 --> 00:21:58 other words, they look to sell more inside of the previous area of accumulation. So they bought long in here, a ran up counterparty liquidity they sell here to
120 00:21:58 --> 00:22:08 willing buyers. And it goes short. Now, here's a low risk sell. This is where people that understand this measure of trading, they can get in short, but
121 00:22:08 --> 00:22:18 they're missing on the really smart money entry. Then we wait for this move here, which returns back up into this area. There's your redistribution, or an
122 00:22:18 --> 00:22:27 area to sell short. And then you have that range. But I'm looking over here. So I'm monitoring how price is sitting in here, I'm not looking up close candles to
123 00:22:27 --> 00:22:36 sell short. I'm not looking for fair value gaps. I'm watching this range in here, because in any time in this area here, I can get short. I'm not worried
124 00:22:36 --> 00:22:45 about trading back up into anything. I know I'm inside of the range to work with him because I'm over here in the previous area of accumulation of lungs. So if
125 00:22:45 --> 00:22:58 we were able to take all of this information here out of the the one minute chart, it would look like this. Okay, I took all that stuff and compress it into
126 00:22:58 --> 00:23:10 a smaller one. So now you can see, we have the original buyside displacement, re accumulation back to fair value and bullish order block. Sosa's re accumulation
127 00:23:10 --> 00:23:21 alongs runs up, re accumulation alongs, Smart Money reversal, low risk sell, redistribution, redistribution sell off roughly equal lows or sell sell
128 00:23:21 --> 00:23:32 liquidity. So this is what it looks like. When you have the market maker sell model. And you look past all of the distortion. It's not It's noise. Noise would
129 00:23:32 --> 00:23:40 be you have no idea what's going on. I know what I'm looking for. And it's exactly what I just outlined here. You need to determine where the ranges are on
130 00:23:40 --> 00:23:49 the buy side of the curve and monitor how price is fluctuating through that if you start breaking above the previous points of accumulation on the buy side of
131 00:23:49 --> 00:23:59 the curve, that means you do not have a sum model at all. It means you have an area where you're going to recommit and go along these areas on the buy side of
132 00:23:59 --> 00:24:08 the curve of a sell side model. They are your points of reference. You're not in you're not just staring into the abyss trying to figure out what's going on.
133 00:24:09 --> 00:24:18 You're looking specifically at predetermined price ranges and even on a one minute basis. You can see how crypto is respecting those previous ranges. It's
134 00:24:18 --> 00:24:31 not that if the scene one minute candles, it's not that the one minute candle is just depicting what the range has been for that one minute interval. But time is
135 00:24:32 --> 00:24:42 a manipulative side of HIPAA. You have to know what the dealing ranges are. And the interbank order flow interbank order flow is what I just showed you right
136 00:24:42 --> 00:24:53 here. I'm cutting through all the BS of a one minute chart and getting right down to the nuts and bolts of what the order flow is on that level. Not order
137 00:24:53 --> 00:25:03 flow from an institutional standpoint because they can't see this way. You can I can and creates visibility. So if we know the draw and liquidity is here,
138 00:25:04 --> 00:25:15 anything up here, like I just outlined here, okay, I didn't create or paint new candles, all I did was took what was existing all this stuff out. And I just
139 00:25:15 --> 00:25:25 took this fractal here, scoot it over here. And there it is, it's done. I got rid of all this distortion. Now, your Photoshop and charts and I'm confused,
140 00:25:25 --> 00:25:32 Michael, you're making stuff up, you're gonna see lots of examples like this. That was a reason why I chose to start doing one minute charts because I can
141 00:25:32 --> 00:25:42 show you with visibility with proof that I can see what's going to happen before it happens. Because I understand how to read the tape. When I'm when I tell you
142 00:25:42 --> 00:25:51 I'm reading the tape, I'm reading what HIPAA is doing? Well, it's following it's kind of its has a macro that it's following certain procedures, it has to do the
143 00:25:51 --> 00:26:00 element of time. That is the variable that was the hardest for me. Because that's the part that screws everybody up on retail, how long is this move going
144 00:26:00 --> 00:26:09 to take to get there? When will the move take place? How long will it take before it starts? And how long will it take before it finishes, that is a
145 00:26:09 --> 00:26:18 variable that took me a lot of time to master. That's the part that I'm just wasn't willing to sit in there and give to the world in free tutorials, because
146 00:26:18 --> 00:26:30 I've watched what they're still doing it now. They're just completely, you know, disrespecting the level of work that took to get this it took a lot of work and
147 00:26:30 --> 00:26:42 patience and obedience. Okay, to get this, and just to have people you know, throw around, in treating like they do, it's just disgusting. But nonetheless, I
148 00:26:42 --> 00:26:54 want you to understand that the one minute chart is not noise, there are periods of distortion, but there's perceptions that you can have only by referencing the
149 00:26:54 --> 00:27:04 previous areas of accumulation here of Long's carry those levels over on the sell side of the curve, which is to the right of the smart money reversal. And
150 00:27:04 --> 00:27:11 you're gonna need to watch this video several times. Okay, I know already, you're like a deer in headlights listening. I have no idea what he's saying I
151 00:27:11 --> 00:27:20 hope he gets it makes it easier. It'll be easier by me showing you examples and examples and examples, okay, just know that all of this stuff here and is noise
152 00:27:20 --> 00:27:37 that it would be called by anyone else. It's just them inside of a dealing range. If the does not price based on a time chart, it prices by way of time and
153 00:27:37 --> 00:27:47 price. So it's not the candlestick chart, it's not the timeframe that creates the setups didn't say, Oh, look at that order block on 15 minute that was to buy
154 00:27:47 --> 00:27:58 that was. That's not how this works. Okay, it's not how it works. It's time and price. Now, I'm not gonna go out on a limb and tell you that I know every aspect
155 00:27:58 --> 00:28:06 of their time portion of the algorithm because when I lose, that's the part I lose. Because it's not generally because I'm wrong on the direction, it's
156 00:28:06 --> 00:28:19 usually because my timing was off. And I messed it up there. But as far as directional bias, and seeing once they start spoiling price and like here, I
157 00:28:19 --> 00:28:27 already know what's gonna happen. I mean, I can work within and I put on a clinic and price action with a one minute chart this entire week, every single
158 00:28:27 --> 00:28:33 day, Friday, the previous week, Monday, Tuesday, Wednesday, Thursday, Friday, I did every single day.
159 00:28:35 --> 00:28:49 forecasted with annotations proving proving beyond a shadow of a doubt that there's no noise on the lower timeframes. The algorithm will distort these
160 00:28:49 --> 00:28:58 charts, not because it's hiding because it's doing it's not an art, it's not I don't believe it's a mechanism that it's creating. Like this, it's not like
161 00:28:58 --> 00:29:05 masking or cloaking what it's trying to do, because you can really clearly see what it's doing with the by side of the curve on the left side of the curve, I'm
162 00:29:05 --> 00:29:12 sorry, on the left side of the curve with the by areas here and we down close candle sets up the next move up. These are those are your frame of reference,
163 00:29:12 --> 00:29:20 you just carry those over to the right side of the chart. And it unlocks everything, what they bought here, they have to mitigate with going short. What
164 00:29:20 --> 00:29:30 they bought here, they have to mitigate and go short targeting there's liquidity over here. Don't spend that much time with all these candles. Because the length
165 00:29:30 --> 00:29:43 the time it draws out. Like for instance, if this would have been like say it's a 32nd chart. Man, this thing would be even longer. It would be twice you know
166 00:29:43 --> 00:29:55 twice as long. And if it's a two second chart, okay, whatever the interval you want to use, all these candles would just be multiplied in the number of them
167 00:29:55 --> 00:30:07 before we saw this move here. So again, that's why I say The chart or the timeframe is not the important factor. It's understanding the delivery of price.
168 00:30:07 --> 00:30:16 Because once you understand what they're doing, they're running from this area here, pricing in up to the fair value gap. Once that fair value gap is tagged,
169 00:30:16 --> 00:30:28 they're selling short. They're adding more shorts, or adding more shorts, and then a displacement. And there's your weekly high. All of this builds with more
170 00:30:28 --> 00:30:42 examples, obviously. But nonetheless, tape reading in the clearest definition I can provide for you is understanding the ebb and flow of the micro dealing
171 00:30:42 --> 00:30:50 ranges that create as time goes by the floor traders, they would always have a little pad in their hands, and they would have their floor numbers, which is
172 00:30:50 --> 00:30:58 basically pivot numbers back then. And then what they would monitor was the intraday highs and lows. Every time they ticked up and made a new high for the
173 00:30:58 --> 00:31:06 day, they'd write that number down. And if it made another high, five minutes later, they would write it down. So in their mind, they know what these ranges
174 00:31:06 --> 00:31:17 are in the operate on that basis. They don't need a chart. I didn't need a chart back in the 90s saw me looking at the CNBC ticker tape, and I would know, okay,
175 00:31:17 --> 00:31:24 we just made a higher high. And I knew what the previous day's high and low was, and where the previous day's close was, I know what the previous day's open was,
176 00:31:24 --> 00:31:33 why is that important? Because if I was working with a fair value gap, okay, I could see all that stuff based on just the price action ticking by every 10
177 00:31:33 --> 00:31:41 minutes. And I didn't need to have a chart in front of me. And that's why I was confident to trade on the road while I was working. Because I did not have
178 00:31:41 --> 00:31:49 charts, I just had numbers flashing on a little machine. It was a it was a quote machine. It's all it's like a little tiny, little, little bit bigger than my
179 00:31:49 --> 00:31:59 Android phone now. And all it did was give me numbers, the high the low, where it was in the volume. That's it, that's all it was, show me just that stuff. It
180 00:31:59 --> 00:32:10 wasn't giving me any charts, we didn't have the luxury of that stuff. back then. It was just analog device, show me numbers, a range. And that's how I traded. So
181 00:32:10 --> 00:32:22 when I studied all of the things I was exposed to, and filled in all the gaps with my retail understanding. It unlocked everything on a chart. So I can see
182 00:32:22 --> 00:32:35 inside this chart, what would otherwise be confusing to anyone else. If I showed this chart to? Well, I wouldn't I'm not gonna go there. If I show it to anybody
183 00:32:35 --> 00:32:45 else that claims the read price action, they will not see the signatures that I'm showing you. Because it's you have to be exposed to certain things. And then
184 00:32:47 --> 00:32:53 it unlocks but you're not going to find it studying charts, you're just not you won't you won't see it, you won't see it. That's why everybody out there walks
185 00:32:53 --> 00:33:03 around saying the same things. intraday charts are just noise. I've never found anybody that can trade consistently on a one minute chart or an intraday chart.
186 00:33:04 --> 00:33:13 While I'm sitting here and leaving everybody Hello, here, here it is, it can be done. But you have to understand you're doing which takes a great deal of effort
187 00:33:13 --> 00:33:24 and takes a lot of concentration. And I you know, this lesson probably feels like more confusion for you. That was kind of like what I was feeling when I
188 00:33:24 --> 00:33:35 first saw because I knew I was seeing something but I couldn't quite figure it out. And once I understood and was exposed to how interbank is priced, that
189 00:33:35 --> 00:33:46 order flow, it became completely obvious. That side of the market, which is above institutional level, okay, you have central bank, above everybody. Then
190 00:33:46 --> 00:33:57 you have the large investment banks. That's your institutional guys. The Goldman Sachs boys, the UBS guys. They're under central bank. They're puppets on the
191 00:33:57 --> 00:34:05 string. Okay. They walk around with all the pomp and the cloud chasing and they're the big wigs and you know, we're the smart money. They're not the smart
192 00:34:05 --> 00:34:15 money. They're just puppets on a string from the central bank level. Anytime that central bank wants to smack them around, they can and they do. And Bill
193 00:34:15 --> 00:34:26 neath the institutional level is a smaller banks and insurance companies and larger traders, and then you get into the retail spectrum with brokerages and
194 00:34:26 --> 00:34:35 such and it gets all down to the retail. So they're not It's not surprising when they say that, when they look at intraday charts. It's just noise because
195 00:34:35 --> 00:34:45 they've never been exposed to what I've been exposed to. And it's not a matter of arrogance as a matter of fact, when you speak to someone and they know
196 00:34:45 --> 00:34:59 something fluidly. It's completely obvious. You know, who knows what's going on. But enlarge trending models, okay, large long term trending models. The
197 00:34:59 --> 00:35:10 institutional guy as their stuff is good to follow, because that's the dance, the central banks will be providing liquidity for those long term moves. But at
198 00:35:10 --> 00:35:17 the turning points, they're going to be wrong. They don't have the luxury of working in these lower timeframes, they're not permitted to look at these lower
199 00:35:17 --> 00:35:29 timeframes. Their models are always on a daily and a weekly chart 90% of the time, 90% of time, they're not allowed to use anything, unless it's a, a trader
200 00:35:29 --> 00:35:40 that exceptionally done well, with their trading, and they've been like more or less special privileges have been granted that person, usually at an
201 00:35:40 --> 00:35:49 institutional level, you have a model that you had just had to follow, they train you, this is what we look for XYZ, it this threshold, we put this much
202 00:35:49 --> 00:35:58 allocation of risk in, and there it is, you can't, we can't breach this level of risk. If you do, you got to kill it. And if you violate it as much as this much,
203 00:35:58 --> 00:36:07 then you're gone. And that's kind of like really minimizing it and oversimplifying it, but that's pretty much what it is. interbank doesn't have
204 00:36:07 --> 00:36:19 that it's, this is the way it's gonna be. Like it or not, Mark is gonna do this, this inactive, if you didn't catch it too bad. As it's the truth of it all. So
205 00:36:19 --> 00:36:29 if we look at price, and we remove all of the noise in here, okay, all the noise has been removed, because we understand the ranges, that price is working within
206 00:36:29 --> 00:36:40 relative to the left side of the curve, which is previous re accumulation of lungs, carry those ranges over. And then I'm watching how price moves in or out
207 00:36:40 --> 00:36:50 of that range. It's as simple as that. Now watch what happens, the body of that candle, because that's the bulk of the volume and re accumulation of lungs.
208 00:36:51 --> 00:36:59 Because there's accumulation of lungs down here and you may not catch this displacement. This is where you would have caught along or should have, and then
209 00:36:59 --> 00:37:13 rallies up, re accumulation of new lungs rallies up here, this body or the candles body here. That close is the bottom of the range I'm looking for when we
210 00:37:13 --> 00:37:23 break out of it right there. Okay, who cares what candle it does it in, I'm looking at the range. So when everybody else is watching these candles paint
211 00:37:23 --> 00:37:36 here, I'm staring at that. That's the bottom of the range. If that breaks way, and it does here that creates what displacement, we've left this area of where
212 00:37:36 --> 00:37:46 it was previously re accumulation alongs they have done their dirty work they have now established or they should have already established new shorts. This
213 00:37:46 --> 00:37:57 displacement creates what an imbalance. There's your fair value gap. Here's the candles high you want to reach above, you can sell short there and look for the
214 00:37:57 --> 00:38:11 liquidity resting below these equal lows 10 2015 Whatever the pips value, you have faith in and it runs the low. Here is 120 278 10 pips below that would be
215 00:38:11 --> 00:38:35 122 6122 59. Showing off by one pip on a one minute chart that's supposed to be just noise. Mark goes over here creates a lower low. Low is 122 51. Again, just
216 00:38:35 --> 00:38:35 for
217 00:38:37 --> 00:38:54 completeness sake, below is 70. So 20 pips will be what 50 pips I'm sorry, 2020 to 50 in the low forms at 120 5120 off by a pip, for one minute chart is
218 00:38:54 --> 00:39:05 supposed to be just noise. You're gonna, you're going to encounter a lot of people that are going to not believe what you are learning, but they can't argue
219 00:39:05 --> 00:39:17 with the facts of me being able to do it. What I just showed you here was just a variable of what I did in Eurodollar. This how I flipped and got myself in sync
220 00:39:17 --> 00:39:30 with the big move that just, you know, just tanked it. The sell off and here, I was watching the smaller ranges. And once the range broke, it created an
221 00:39:30 --> 00:39:39 imbalance right in here. And then created a small imbalance in here, but I wanted to see the range break and then ready to hear sold short and then I'm in
222 00:39:39 --> 00:39:47 here short, but it went up just a little bit more because I'm masking. I don't want people looking at what I'm doing and trying to figure it all out because
223 00:39:47 --> 00:39:54 I'm convinced there's some smart people out there. I'm not the smartest person in the room, that's for sure. But that was what I did I priced in what the
224 00:39:54 --> 00:40:03 expectation was relative with what is said here, tape reading and this little Punch up in here got everybody excited thinking that created the low and then
225 00:40:04 --> 00:40:13 set it right on video annotations. It's getting ready to go hard down like it was getting ready to break heart. And it's all based on the market maker. So
226 00:40:13 --> 00:40:25 model. So I know I already know that this lesson creates all kinds of questions. And that's good because that's what you want to learn you want to learn. And the
227 00:40:25 --> 00:40:33 way you know you're learning is because you have buried your understanding, and then they'll be filled in with more examples. Okay, but for now, just know that
228 00:40:33 --> 00:40:42 when I look at a one minute chart, I'm not confused by all this because I have specific frames of reference which you have already been taught in the core
229 00:40:42 --> 00:40:49 content on this showing you how to apply them correctly. So until next time, wish good luck and good trading