ICT YT - 2020-01-28 - Forex Price Action Discussion - AudUsd.srt

Last modified by Drunk Monkey on 2022-12-22 08:37
1 00:00:07,680 --> 00:00:08,220 ICT: Hey, folks,
2 00:00:09,240 --> 00:00:15,690 it's been a while since I've put something up on my YouTube channel. So it's nice for you to stop by and take a look at what I'm going to share with you
3 00:00:15,690 --> 00:00:23,640 today, I want to talk briefly, it's not gonna be a very long video, it's probably going to be something new for most of you that are familiar with me.
4 00:00:24,540 --> 00:00:37,710 But the the concept of support and resistance, and the notion that old support broken becomes resistance, and resistance broken becomes support all that stuff,
5 00:00:38,430 --> 00:00:41,190 I'm going to ask you to put that aside for a moment.
6 00:00:42,780 --> 00:00:56,100 I'm also going to ask you to suspend your belief in where price has reacted to before as support, it will offer another level of buying put that aside as well,
7 00:00:56,100 --> 00:01:08,550 too. Okay. I kind of like want to introduce a concept that's prevalent throughout my material. And it's the the notion of seeking liquidity, the market
8 00:01:08,550 --> 00:01:21,600 doesn't trade, whether you want to accept this at this stage in your development or your career, or not. The truth is this. Price patterns, indicators, retail
9 00:01:21,600 --> 00:01:34,050 logic, all of those things are not catalysts that make price move. There's no buying and selling pressure, there's no supply and demand. It's 100%.
10 00:01:34,080 --> 00:01:50,820 Engineered, okay. So, especially when it comes to the foreign exchange market, which is more or less my specialty since 2006. If we are to understand what I
11 00:01:50,820 --> 00:02:00,840 mean by that, I'm going to take a sample set of price action. And if you pay attention, I promise, you're going to learn some things here that you might not
12 00:02:00,840 --> 00:02:12,900 have expected to learn. When we look at price, and we studied price charts, especially if you're a new person that's just sitting in on studying price and
13 00:02:13,260 --> 00:02:24,420 the markets and trading and such, it can be a rather daunting task. And true, very intimidating. Because all of these candles here represent one particular
14 00:02:24,540 --> 00:02:36,300 trading day 124 hour interval where it started, where it stopped trading for that particular 24 hour period. If I were to ask you, where the most significant
15 00:02:36,300 --> 00:02:51,180 price move has taken place, where would you look. Or some of you would say this move here down. Some of you would say this move here, down. Others might say
16 00:02:51,330 --> 00:03:08,310 this move here up inside of this entire fractal. That's the actual move. So what's happening is over here, and I'm believing I'm going to be very honest and
17 00:03:08,310 --> 00:03:14,670 tell you that this is an oversimplification, simply because I don't want the video to be too long. And I don't want to bore you. And I'm probably boring some
18 00:03:14,670 --> 00:03:24,330 of the cynical people here already. But follow, I want you to look at the run from this low all the way up to here. Now I'm not going to outline all the
19 00:03:24,540 --> 00:03:35,940 things that led to all this because it's not that important factor. But I want you to look at how if we look at the idea of support and resistance, the idea
20 00:03:35,940 --> 00:03:47,910 that price has for whatever reason, and I'm not going to go into the catalysts as to what made this low here form and run up to here. I'm going to cover why
21 00:03:47,940 --> 00:04:00,090 this area here, which acted as what everyone would see as a form of retail support. Okay, or classic support and resistance theory, price for whatever
22 00:04:00,090 --> 00:04:11,760 reason came down, and it stopped and started going higher. Now there's going to be a crowd that will readily come in and say, Oh, this is part of a harmonic
23 00:04:11,760 --> 00:04:25,410 pattern or it's a demand zone, or it's a order block. Or it's a Fibonacci harmonic pattern. something of that nature. Others may look at that and say
24 00:04:25,410 --> 00:04:38,220 that's an Elliot wave pattern, it led to a rally. All of these ideas are useless. without context, there has to be a narrative that's understood.
25 00:04:38,640 --> 00:04:50,040 Otherwise, how house price determining which retail logic or theory that causes price to move if that's what you're subscribing to, because there's a myriad of
26 00:04:50,040 --> 00:04:59,760 different disciplines in the marketplace, as I mentioned a few of them just a moment ago. Why is it and how is it determined by price
27 00:05:01,110 --> 00:05:10,860 Which one is going to follow at any given time? Because not all of them agree. Once in a while, there'll be an agreement on one or two, maybe three different
28 00:05:10,860 --> 00:05:25,830 types of disciplines. But what is it that makes price elect to follow Elliott Wave today, or supply and demand or order blocks. It's not the discipline or
29 00:05:25,830 --> 00:05:36,450 theory. It's the narrative that's missing from what educators are trying to convey, because 99% of them don't have the narrative. They don't know, they can
30 00:05:36,450 --> 00:05:43,710 only give you examples on the far left side of the chart, and talk about what's already happened. Now, right away, some of you're saying, well, you're about to
31 00:05:43,710 --> 00:05:51,120 do that right now, like you've always done, Michael. Well, that's because you're outside the circle. I do these things before the fact. And I explained them, and
32 00:05:51,120 --> 00:06:02,880 I draw my students attention to specific things that they're trained to see and observe. I prompted all of my followers on Twitter this week, to monitor the
33 00:06:02,910 --> 00:06:16,260 Australian dollar. And, obviously, that's what we're looking at here. And I want you to consider this low. Okay, and just forget the idea of support resistance.
34 00:06:17,010 --> 00:06:29,190 Forget that. If this price rally started here, the natural assumption would be when it gets down to that level, again, it should bounce again, this should
35 00:06:29,190 --> 00:06:43,980 provide you a trade to go long, I have over 2000 plus books, many of them are regurgitated retail nonsense that does not promote or carry one, two,
36 00:06:44,610 --> 00:06:56,700 consistency, accuracy, none of those things, in fact, they promote confusion. And if you are out in the industry now trying to chase, the new author, the new
37 00:06:56,700 --> 00:07:06,000 writer, the new educator, chances are you're wasting your time and your money. And I'm just going to be very blunt and say it. If anything that you're
38 00:07:06,240 --> 00:07:18,870 following along in terms of quote unquote market maker, you're actually getting a derivative of my 19 $96 million trading plan. And that was coached and taught
39 00:07:18,870 --> 00:07:29,220 to a small group of people. And much like everything else I've done over the years. They've taken that and watered it down and revamped it and try to create
40 00:07:29,220 --> 00:07:36,150 something new out of it. But when you know, what's yours, you can see it. And prior to 1996 no one was ever talking about market maker this and market maker
41 00:07:36,150 --> 00:07:47,130 that it was me, I was when I go online. Everything about market maker concepts being taught to any retail audience is mine. Now, they may have added
42 00:07:47,160 --> 00:08:01,530 indicators, and add all kinds of retail fluff to what they're saying. But the original ideas that I shared relative to market making, were largely founded in
43 00:08:01,770 --> 00:08:13,020 1996, lecture notes, I started trading 1992, November 5, matter of fact, in 1992, that was my my journey began. So I've been doing this for a long, long
44 00:08:13,020 --> 00:08:23,160 time. And I've seen a lot of folks come into this industry and tried to pretend to be knowledgeable, try to be helpful, but in fact, they're actually de railing
45 00:08:23,490 --> 00:08:32,490 the very people that they're pretending to help. And the folks that are paying attention to these people don't know any different because they don't know what
46 00:08:32,490 --> 00:08:42,930 they need to know. And by not knowing what they need to know, that's harmful to them. So, if we look at this low here, and we had the idea that if it comes back
47 00:08:42,930 --> 00:08:53,430 down to that level books, retail support resistance, all the you know, the trading education's centers and hubs for for trading, whether it be assets for
48 00:08:53,430 --> 00:09:03,330 stock trading, or commodity trading, or Forex, or crypto even. The idea is, this is going to be a possible trading opportunity, because it's a daily timeframe.
49 00:09:03,420 --> 00:09:16,470 So therefore, we should get a reaction there. Sometimes that happens. Not all the time. What I like to do is attack those individuals that believe in that
50 00:09:16,470 --> 00:09:29,670 theory. I want to take a retail idea, because if we if we classified speculation into two groups, they're smart money, those individuals that are informed, they
51 00:09:29,670 --> 00:09:42,870 don't do what the masses do. They diverged from what? Well, the average person or what we'll call street money. It's commonly referred to as dumb money.
52 00:09:44,910 --> 00:09:55,620 I don't mean to be derogatory, but I'm just using the commonly bandied about terms, smart money. Their idea that this low is there's individuals that bought
53 00:09:55,620 --> 00:10:09,420 that and large institutional funds That have enormous amount of volume to have a long term trending model, they will have a large pool of liquidity in the form
54 00:10:09,420 --> 00:10:18,450 of sell stops resting below that low. They're not actively trying to trail their stop loss up every five points, or pips, because it's made a new equity high for
55 00:10:18,450 --> 00:10:30,150 them. Because their positions are so large, and their positions are meant to be a long term time horizon. They allow trends to move against them a lot. And it
56 00:10:30,150 --> 00:10:40,710 takes a great deal of change for those models to be taken out, and then maybe they'll reverse maybe they'll wait for more information, but they're not trying
57 00:10:40,710 --> 00:10:49,110 to turn on a dime, like a short term day trader or an intraday scalper, they can't do those types of things, they don't have that luxury because of the
58 00:10:49,590 --> 00:11:01,380 protocols in place for long term hedge and institutional trading. They have protocols they have to follow. And they allow the market a lot of breathing
59 00:11:01,380 --> 00:11:12,240 room, okay, so they're not trying to choke or strangle their positions by jamming their stop losses up real tight, which is a common retail pitfall. So I
60 00:11:12,240 --> 00:11:21,030 want you to think about the large pool of liquidity that rests below here, okay. And there are people in this industry that try to teach and they say that they
61 00:11:21,030 --> 00:11:31,920 don't go after your stock, there is no day quote, unquote, day. Well, there used to be a day, okay, there used to be a collective entity, they were people, and
62 00:11:31,920 --> 00:11:40,800 they would purposely run stops, okay. And if you ever talk to a floor trader, from the Chicago Board of Trade or Chicago Mercantile Exchange, they'll tell
63 00:11:40,800 --> 00:11:53,850 you, that's exactly what took place, day by day, every day, day in and out. Over time, as the industry has evolved, we moved more and more away from the human
64 00:11:53,850 --> 00:12:04,200 element, much like every other industry in the world, to an automated artificial intelligence. And the majority of how markets are priced and delivered to you
65 00:12:04,200 --> 00:12:18,240 now is all from an algorithm. And these algorithms were written with a lot of old school retail, attacking theory and loads where the liquidity would be, or
66 00:12:18,240 --> 00:12:30,210 where the sentiment would be poised, bullish or bearish. They would make a run on that because 90% of large funds, okay, or hedge funds actually use what is
67 00:12:30,210 --> 00:12:38,850 commonly regurgitated as retail logic. Now, you're probably thinking, well, if that's true, Michael, then you said, you know, dumb money is the people that
68 00:12:38,910 --> 00:12:52,320 don't follow these ideas. They do what everyone else is doing. The large hedge fund managers and folks that work on these long term trend models, they are not
69 00:12:52,320 --> 00:13:00,090 thinking like a retail trader by trying to get in every single position, trying to trade every single day trying to manage their position with ultra tight
70 00:13:00,090 --> 00:13:10,920 stops. Okay, so while the logic is very similar in a lot of ways, the separation and distinction between the two that have large hedge fund managers and retail
71 00:13:10,920 --> 00:13:21,450 street money is that retail street money can afford in their mind to take a loss. So they do everything they can to try to avoid taking a monetary loss in
72 00:13:21,450 --> 00:13:30,030 trading. And by doing those very things by jamming their stop loss too tight, or not using a stop loss right away and then letting the position go against them.
73 00:13:30,570 --> 00:13:36,900 And then all of a sudden, they either get stopped out because of a margin call or they just for lack of a better words throw their guts up because they can't
74 00:13:36,900 --> 00:13:47,040 take it anymore. And they blow their account out. Those characteristics that lead tend to get into a trade may be very similar to maybe exactly what these
75 00:13:47,040 --> 00:13:56,160 long term hedge fund managers are using for their trend models. But retail traders many times will take characteristics of a specific approach or trading
76 00:13:56,160 --> 00:14:06,390 style like day trading or long term position trading. And they try to force the characteristics of day trading inside of a long term trending model. or worst
77 00:14:06,390 --> 00:14:18,990 case, they're using a short term trading strategy. And they went into the idea that this is a good short term intraday scalp. And because it moves really quick
78 00:14:18,990 --> 00:14:26,040 for them, they fall in love with it. And they say, Well, now this is going to be a six month trade. And they let that one or turn into a loser. And if you've
79 00:14:26,040 --> 00:14:31,590 been trading for any length of time, you know exactly what that feels like. Because all of us have fallen victim to that. And back in the 90s. I did a lot
80 00:14:31,590 --> 00:14:32,910 of that in my development.
81 00:14:34,350 --> 00:14:41,820 So I want you to think about the individuals that bought here, okay, yes, there's an opportunity for two stops to be held to this low and this low. But
82 00:14:41,820 --> 00:14:49,740 right in here, I want you to think about that because this is the origin of this entire price run. This is where all the largest pool of liquidity is going to
83 00:14:49,740 --> 00:14:55,980 be. Now, when folks say they don't get your stock, they don't reach for your stuff. That's a lie this. These are people that don't know they're talking
84 00:14:55,980 --> 00:15:04,320 about, okay, they don't have any idea what they're talking about. They're just trying to Pretend the elephant in the room, but the elephant is standing right
85 00:15:04,320 --> 00:15:14,700 there, whether they want to acknowledge it or not. And the elephant is, the markets move on the basis of liquidity. They're either engineering liquidity, or
86 00:15:14,850 --> 00:15:24,210 they're going after open float, open float is the existence of buy side liquidity. For instance, above an old high here, that's buy side liquidity,
87 00:15:24,210 --> 00:15:33,240 anything above that old high would be in the form of buy side liquidity or buy stops, those buy stops are in two different categories. One, protecting a short
88 00:15:33,240 --> 00:15:45,570 position, or entering a new long patient on a breakout below an old low is sell side liquidity. And that's gonna be in the form of two camps, sell stops for
89 00:15:45,570 --> 00:16:00,000 long position protection, or sell stops to break out with a new short position on weakness. Smart Money will look at this low and target the liquidity below
90 00:16:00,000 --> 00:16:12,240 this low. Why because of the magnitude of the move that took place. So they know there's a large footprint of fund level liquidity. When I say and when I talk
91 00:16:12,240 --> 00:16:22,590 about, they're gonna make a run on stops. I'm not talking about the traders over and Atlanta, okay, or FCM. Okay, I'm not talking about those individuals, I'm
92 00:16:22,590 --> 00:16:34,440 talking about large institutional flows, where their stops are going to be. This is an area that I drew everyone's attention to on Twitter. I asked everyone,
93 00:16:34,470 --> 00:16:41,790 where's all the dollar reaching for. And I prompted I wanted to look at the daily chart. And this was the old low that anyone that's been studying with me
94 00:16:41,820 --> 00:16:49,500 will know right away, this is a pool of liquidity would be resting. And even though the market already started coming down, right about here, I saw I was
95 00:16:49,500 --> 00:16:59,010 talking about everyone, following him looking at Aussie dollar. Now there are times when traders should not be chasing the market. And this is going to seem
96 00:16:59,010 --> 00:17:06,240 like someone that's probably just started last month, okay. Or last summer, they started trading, and he read 10 books, and now they're going to be in here
97 00:17:06,240 --> 00:17:16,320 looking to correct me, you're chasing price or you're not chasing anything, okay, I'm telling everyone exactly what the markets going to do before it does
98 00:17:16,320 --> 00:17:25,980 it. And I'm giving you the logic. But I have to get your attention to a specific framework in the marketplace, and focus your attention on that framework alone.
99 00:17:26,550 --> 00:17:35,760 It was this low. Now when I sit down and I start talking about the markets, invariably, if someone was a daily chart up, they don't know, really what I'm
100 00:17:35,760 --> 00:17:42,540 looking at, unless they spent any time with me. All these candles back here, all these highs and lows, they're gonna look at that. And they're gonna think that
101 00:17:42,570 --> 00:17:53,490 these things are factors for right now. And they're not what I was framing is this. So the entire fractal that was of importance. And that was salient to the
102 00:17:53,490 --> 00:18:04,470 discussion for my Twitter tweets, was this low here, forget anything prior to it. Okay, we're only looking at this. So as the market was starting to go lower,
103 00:18:04,860 --> 00:18:17,190 my attention was on this low and how we would attack it. So what's resting below that? Sell side liquidity in the form of sell stops, it matters not how many are
104 00:18:17,220 --> 00:18:25,920 trying to go in the market to go short. And it does not matter how many are going out of the market or the long position being stopped out. It's not an it's
105 00:18:25,920 --> 00:18:35,610 not important, not impactful, it just means that we understand. And we don't overthink the fact that there's going to be sell side liquidity resting below
106 00:18:35,610 --> 00:18:44,640 that. Now there are ways to determine the majority of what that is, but it's based on context and narrative prior to this low, which is beyond the scope of
107 00:18:44,640 --> 00:18:52,950 this discussion. So I want you to know that this level here they have on the chart when I drop down into a lower timeframe, that's this particular low. Okay,
108 00:18:53,130 --> 00:19:10,470 so if we look at the actual low on that candle, it comes in at 6754. So 6754 and that's it, we are going to make sure we have on our chart to the PIP. Alright,
109 00:19:10,470 --> 00:19:19,470 so now everything is calibrated route relative to this low. So I'm going to drop down into a 15 minute timeframe, we'll continue our discussion. Alright, so here
110 00:19:19,470 --> 00:19:26,340 is the 15 minute time frame of Australian dollar. And you can see that we have Monday's trading here. I don't have the entire high of Monday, it's not
111 00:19:26,340 --> 00:19:30,330 important. Drew everyone's attention. If you look at my Twitter feed
112 00:19:30,690 --> 00:19:46,290 at I underscore m underscore ICT that is where we started our observation. And this is the old daily well as outlined on the daily chart. We have relative
113 00:19:46,290 --> 00:19:54,480 equal highs in here and price runs back up into a bearish order block, which is this candle here. We're not going to teach order blocks here. It's in my lessons
114 00:19:54,480 --> 00:20:05,100 you can actually find a lot of that introductory and foundational information on order blocks which is just basic approaches to it with my YouTube videos. I
115 00:20:05,100 --> 00:20:15,600 teach, obviously much more in depth in advanced use of waterblock theory in my mentorship, the equal highs in here relatively equal highs, they run those,
116 00:20:15,750 --> 00:20:24,270 there's above that what's going to be the same thing we outlined on a daily chart about above old highs is buyside liquidity. So they run those buy stops on
117 00:20:24,270 --> 00:20:33,840 anyone that's short. And the opportunity is that those buy stops flood the market with buying interest immediately floods the market with willing buyers at
118 00:20:33,840 --> 00:20:44,670 a higher price. And smart money will pair their orders with that and sell short right above those highs. And then every time the market has a retracement, okay
119 00:20:44,700 --> 00:20:53,820 presents an opportunity to create a new short position until we get down to that old daily low. Now when we do this, okay, when we trade down to that old daily
120 00:20:53,820 --> 00:21:01,890 low to support resistance camp, those individuals that like to see these types of things, they're going to be out here buying. And if you look at indicators,
121 00:21:02,160 --> 00:21:10,590 and such, you'll see that there's momentum indicators diverging bullish Lee at these levels. And that's exactly what they want. They want traders to think that
122 00:21:10,590 --> 00:21:19,590 this is a low and the market starts to go up a little bit, but then it goes and consolidation, new trading day begins. They run below these relative equal lows,
123 00:21:19,590 --> 00:21:32,610 what's below here, sell side liquidity. So what we're seeing is buy stocks being taken. So if the buy stocks are being rated what's actually happening, so one
124 00:21:32,610 --> 00:21:45,060 has to take those out of that by side. So everybody has to have a seller, this seller is profitable if they wrote it down to that old daily, low, or under it.
125 00:21:45,540 --> 00:21:56,100 Because below that old low is what willing sellers, they have sell stuff below that. So they want to sell at a low price. Remember, it was over here. So the
126 00:21:56,100 --> 00:22:04,080 orders that were below that old daily low in the form of sell side liquidity. They're screaming like with a banner in their hands, I am willing to sell way
127 00:22:04,080 --> 00:22:14,640 down here if you want. If it gets down here, I'll sell to you. Well, those smart money that sells to the buy stops that are trying to protect their short
128 00:22:14,640 --> 00:22:25,740 positions. They sold short here, they write it down to the old daily low. And they offset their position by distributing their shorts to willing participants
129 00:22:25,740 --> 00:22:36,720 that want to sell to a lower price. And the smart money will buy it back covering their shorts. To get out of a short, you have to buy it back. Well,
130 00:22:36,720 --> 00:22:44,940 who's gonna buy it from Smart Money pairs it up with the liquidity resting below the old daily low. And this is a concept that I teach is called offset
131 00:22:44,970 --> 00:22:55,260 distribution. Offset distribution is exactly how interbank works. You're not going to see that in books, you're going to hear it from me if you train under
132 00:22:55,260 --> 00:23:06,510 me. But the concept is then really been watered down from folks that have trained under me for a little while, or had been exposed to my content. And
133 00:23:06,510 --> 00:23:14,340 they're trying to rename things and draw attention to themselves. Like they understand how markets work or how market making is done. And they're completely
134 00:23:14,340 --> 00:23:23,520 clueless. They're absolutely clueless, YouTube has been invaded by you guys that have no idea what they're talking about, they're only going to talk about what's
135 00:23:23,550 --> 00:23:30,120 already happened. In the left side, you don't see them actually trading it, you don't actually see them outlining it before it happens. And they're out there
136 00:23:30,120 --> 00:23:39,810 trying to promote multi level marketing. I market live I market analysis I market Academy I am trying to copy off ICT is basically what that is, these are
137 00:23:39,810 --> 00:23:49,560 all people pretending Okay, and you'll never see them trading an account. And many of you watch me do this last year where I took a small account and ran it
138 00:23:49,560 --> 00:24:01,500 up over seven digits. And I did it in short order. It brought a lot of controversy. But I was doing a lot of what I just explained here. And those
139 00:24:01,500 --> 00:24:10,500 individuals that run services or try to run signal services, they were blown out of the water because they can't answer for something like that. So they
140 00:24:10,500 --> 00:24:25,890 instigated a mt empty for server okay rented empty for server scam, which I was just as well as anyone else surprised out easy it was to pretend and fake
141 00:24:26,609 --> 00:24:35,489 what your results look like when you go on social media. You can see these guys on Instagram, they show their mp4 profits, what's your balances are and how many
142 00:24:35,489 --> 00:24:44,249 positions they have open and whatever. You can put in all that stuff after the fact. If you watched what I was doing, I was my orders were resting in the
143 00:24:44,249 --> 00:24:51,329 market before the market would go up and you can actually see see, see these things on my YouTube channel still. I have limit orders in the marketplace. It
144 00:24:51,329 --> 00:25:00,749 goes up it hits the limit order and then it goes where I want it to go. And then I reverse and go the other direction. So there's no empty for server New
145 00:25:00,779 --> 00:25:12,629 tomfoolery there. Okay, they have been completely exposed as frauds and trying to discredit me. And on top of that, I have 1000s of people that watch me do
146 00:25:12,629 --> 00:25:22,949 this every single week and I'm co signing what I believe the markets going to do before it happens on Wednesdays on the weekends. So before these markets trade
147 00:25:22,949 --> 00:25:35,309 to these levels, I've already said this is what's going to happen. And those that are familiar with me they'll know it were 98% accurate analysis every
148 00:25:35,309 --> 00:25:45,449 single week. That means 98% of the time, what I expect to see unfold in price. That's what happens. And I'm predominantly only focusing on euro dollar and
149 00:25:45,449 --> 00:25:57,689 cable, my analysis of what the dollar index, and we've been bullish on dollar, which lends well to these ideas with the weakness in Australian dollar. If you
150 00:25:57,689 --> 00:26:08,219 study the times of the day that the markets creating these highs, it's in an area where I have dubbed over the years as an ICT kills them. Now what is a kill
151 00:26:08,219 --> 00:26:19,109 zone, a kill zone is a specific segment in time, at specific times of the day, where there is a high probability for a key turning point to form. Now, those
152 00:26:19,109 --> 00:26:28,829 key turning points intraday could actually be the very daily high or the very dearly low. It's not always the daily high or the daily low, and sometimes it's
153 00:26:28,829 --> 00:26:40,859 just a intraday in a market turn, like it would be seen on a one minute or 15 minute timeframe. I want to take your attention back to this level here. And
154 00:26:40,859 --> 00:26:48,659 remember that if it was hitting that old daily, low traders that view support resistance, we're going to see that as a potential buying opportunity,
155 00:26:49,049 --> 00:26:59,219 especially if the add to it indicators. Okay, so if they started putting their momentum indicators, their stochastic, RSI, CCI, MACD, whatever they're using,
156 00:26:59,609 --> 00:27:13,559 all of that is going to be painted with a bullish divergence. That's what the algorithm does, it spends time in a range, which causes the indicators to go to
157 00:27:13,559 --> 00:27:22,409 an overbought or oversold relative to where it has been recently. So from this high to this low, okay, take it out like this, I'm going to teach you real quick
158 00:27:22,409 --> 00:27:31,169 how to throw away all your indicators because you don't need an indicator to tell you if you're overbought or oversold. A market technician, a mechanic with
159 00:27:31,169 --> 00:27:40,589 price does not need an overbought oversold indicator. They don't need to look for divergence either. Because you can see it in price. Without the necessity of
160 00:27:40,589 --> 00:27:49,559 having an overlaid indicator on your chart. There's nothing on my chart except for that horizontal line. And I've outlined the logic of what makes this market
161 00:27:49,559 --> 00:27:58,679 move. Now. I've already framed all this stuff on Twitter, I drew everyone's attention to this before it happened. We go back to this old daily low, which is
162 00:27:58,679 --> 00:28:07,079 that horizontal line, retail is going to expect a bounce. And they give it a look a little bit of a rally there but then they hold it. Then as a new day
163 00:28:07,079 --> 00:28:20,819 starts. Okay, when we have a new day beginning in Wellington, there's going to be a new day started in the foreign exchange market. And the Australian dollar
164 00:28:21,149 --> 00:28:31,439 and New Zealand dollar typically will have really respectful runs in this time of day before Asia starts. And during Asia, usually I'll show you the New
165 00:28:31,439 --> 00:28:41,609 Zealand can be traded with a scalping idea. The market runs below these relative equal lows right below here, hit that and then it creates another relative equal
166 00:28:41,609 --> 00:28:52,019 low. So we have rated effectively, the old daily low here on a shallow sense. And then we went a little bit deeper here, then the market rallies back up. And
167 00:28:52,019 --> 00:29:02,279 what is it doing here it's taking out the buy side liquidity that's resting above would be seen as resistance by retail traders. It's gone up, it's gone up,
168 00:29:02,309 --> 00:29:11,159 it's failed to go here. So this is what in their eyes, that's going to be a safe area to sell short or if they sold short down here. They can put their buy stop
169 00:29:11,159 --> 00:29:15,509 that will protect that short position right above these real safe equal highs.
170 00:29:16,079 --> 00:29:26,129 Which now all of a sudden, everybody on YouTube, everybody on social media, Instagram, and all these multi level marketing companies, okay are pretending
171 00:29:26,639 --> 00:29:35,009 they understand that too. It's not always in equal height equal load, it's rated. It doesn't always present that sometimes. These are continuations where
172 00:29:35,009 --> 00:29:44,279 we can run it come back and then recapitalize and go long again, for a longer term move. So don't think simply because it's equal high equal low that you
173 00:29:44,279 --> 00:29:51,179 figured it out either because of the whole lot more context that's necessary. This is a run on the bicycle equity running buddies relative equal highs. And
174 00:29:51,179 --> 00:30:03,119 it's happening in Midnight in New York time. rallies hits it, I mean an hour and then make sense aggressive run to the sell side liquidity resting below these
175 00:30:03,149 --> 00:30:17,549 equal lows here. So we make a deeper path into the liquidity that rests below that old daily low. So this low here, dug in deeper than the initial run in
176 00:30:17,579 --> 00:30:33,869 Asia. And below what was seen in the New York session on Monday of this particular week, the 27th of January. Once we dug in deeper, then it rallies
177 00:30:33,869 --> 00:30:43,469 back and start spending time at and around that Oh, daily. Well, why does it do that? Because there's all kinds of liquidity, the resting below that old daily
178 00:30:43,469 --> 00:30:53,969 low. And that's why we're seeing all these ebbs and flows around that level, because it's allowing the algorithm is allowing orders to come into the
179 00:30:53,969 --> 00:31:04,859 marketplace and build up around that old daily low. Because like I said, there's traders that look at the old daily low as support they want to buy it. Other
180 00:31:04,859 --> 00:31:11,669 traders are looking at when it breaks in it comes back up, they want to sell short at it because they think it's support broken term resistance, and they get
181 00:31:12,149 --> 00:31:21,209 sliced and dice to the market breaks down and they chase it. When they do they wait for these overs to vary. When they do they go short, because they're
182 00:31:21,209 --> 00:31:30,119 chasing price. And then what happens, the market runs back up above that old daily low that they looked at as support broken out term resistance. And that's
183 00:31:30,119 --> 00:31:39,389 what's going on here. They're sweeping the liquidity above that old low for those types of traders. So when we understand what we're looking for, it gives
184 00:31:39,389 --> 00:31:47,579 you a context to act. When the standstill when to anticipate a specific direction in mind, where's the draw on liquidity? That's the draw on price.
185 00:31:47,729 --> 00:31:59,369 Okay, I teach in my concepts and in my mentorship and even in a lot of my free lessons. The draw on liquidity. If you go on my Twitter feed, there is a free
186 00:31:59,369 --> 00:32:07,019 price action model that I shared last year. And it's a PDF file that you can download and look at it. Till next time. I wish good luck and good trading.