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ICT YT - 2025-02-08 - 2025 Lecture Series - Algorithmic Price Delivery Continuum

Last modified by Drunk Monkey on 2025-04-03 12:11
1 00:00:35 --> 00:00:39 ICT: Welcome back, folks. So we're going to get right into it. In this lecture,
2 00:00:39 --> 00:00:43 we're going to be covering how to visually read actual order flow without
3 00:00:43 --> 00:00:50 retail gimmicks like level two data, depth of market ladders, even footprint
4 00:00:52 --> 00:00:58 and to anticipate my fair value gaps remaining open, how to properly handle
5 00:00:58 --> 00:01:04 price inefficiencies at all times when the forecast breakaway gaps and
6 00:01:04 --> 00:01:11 precisely where now select ultra precise stop loss placement with no fear. All
7 00:01:18 --> 00:01:23 right, we'll be doing a short little lecture here, and forex review. So I'll
8 00:01:23 --> 00:01:28 be covering the dollar index, and then the POUND DOLLAR currency pair, and then
9 00:01:28 --> 00:01:32 we'll be teaching the content that will allow me, obviously, to knock off
10 00:01:32 --> 00:01:37 several topics all in one fell swoop. In one video, I'll be able to tackle
11 00:01:37 --> 00:01:41 lectures that I had in mind. So real short, concise, rate to the point too.
12 00:01:41 --> 00:01:46 So let's zoom in on this. Get started all right. On left hand side, you can
13 00:01:46 --> 00:01:52 see $1 Index daily chart, and always tell what time frame I'm using by this
14 00:01:52 --> 00:01:57 upper left hand corner. And this was the gap down here that I wanted to see if we
15 00:01:57 --> 00:02:01 can get below it and use it as an inversion fair value gap, and then work
16 00:02:01 --> 00:02:04 towards the sell side liquidity pool. Now because I'm dealing with a daily
17 00:02:04 --> 00:02:09 chart, there's a whole lot of back and forth type price action. So it's not
18 00:02:09 --> 00:02:12 unless it's in a very fast, low resistance liquidity run condition. The
19 00:02:12 --> 00:02:16 market's going to spend a lot of time back and forth, as you see it doing
20 00:02:16 --> 00:02:21 here. So as you can see, we got down to consequent encroachment of that gap and
21 00:02:21 --> 00:02:27 then move back up into this fair value gap here that's delineated by these two
22 00:02:28 --> 00:02:34 line segments, this little area right in here, that is an inversion fair value
23 00:02:34 --> 00:02:38 gap, which we treated up into just today. So over here, when price was
24 00:02:38 --> 00:02:41 moving higher, this was a buy seven balance, outside of efficiency. And
25 00:02:41 --> 00:02:45 typically, when the market's bullish, if it's dropping down into that if we are,
26 00:02:45 --> 00:02:50 in fact, bullish at that moment, price should show sensitivity and start the
27 00:02:50 --> 00:02:53 same price higher. It doesn't do that. It goes right through it comes right
28 00:02:53 --> 00:02:58 back up into it today. So I'll be watching what we do on Sundays opening
29 00:02:58 --> 00:03:03 going into the first part of next week to see if this is still likely as a
30 00:03:03 --> 00:03:08 scenario. I don't like the way it has all this up here between these two
31 00:03:08 --> 00:03:13 highs. To me, it looks heavy, but worst case scenario, it doesn't drop and just
32 00:03:13 --> 00:03:16 stays in consolidation, which you know it could do with all this stuff that's
33 00:03:16 --> 00:03:21 going on with tariffs and whatnot. Find the chart on Dollar Index. You can see
34 00:03:21 --> 00:03:25 we are using this inefficiency, which was obviously framed on the weekly
35 00:03:25 --> 00:03:32 chart. Look at the videos from earlier in the week. That's this shaded orange
36 00:03:32 --> 00:03:35 area down here when price dropped into it. That's this occurring right here,
37 00:03:37 --> 00:03:41 right here on this, on this candlestick, it opened, traded down and sprung back
38 00:03:41 --> 00:03:47 up into this portion of that inefficiency. So think about it as this
39 00:03:47 --> 00:03:54 is the discount array, and this is the premium array trades down into it. Here
40 00:03:55 --> 00:04:00 discount look at the bodies respecting it and its own individual fair value gap
41 00:04:01 --> 00:04:09 and rallies. This positive balance. Sell side. Efficiency is a bullish fair value
42 00:04:09 --> 00:04:14 gap, but the market trades down through it and then right back above it here,
43 00:04:14 --> 00:04:18 then it becomes a reclaimed, bullish fair value gap. So again, I don't look
44 00:04:18 --> 00:04:22 at an inefficiency that's filled or fills the number, if you will. In other
45 00:04:22 --> 00:04:25 words, it closes it in once it does that, I don't forget about it. The
46 00:04:26 --> 00:04:29 algorithm isn't going to forget about it. So me as a trader, I'm not going to
47 00:04:29 --> 00:04:36 forget about it. So I want to be aware of what these levels are. So bullish
48 00:04:36 --> 00:04:40 reclaims fair value gap and then partially trading down into it fails to
49 00:04:40 --> 00:04:43 trade down to its consequent encroachment, which is the midpoint
50 00:04:43 --> 00:04:47 right here in that line. So that's the institutional order, flow, entry, drill,
51 00:04:47 --> 00:04:58 rallies up, then finally delivers into this premium array. This over here is an
52 00:04:58 --> 00:05:02 inversion, fair backup as well. So. So in this case, it was sell side of
53 00:05:02 --> 00:05:06 balance by side and efficiency. If the market was, in fact, bearish and didn't
54 00:05:06 --> 00:05:10 have a whole lot of volatility like we've been seeing, it could have went up
55 00:05:10 --> 00:05:15 into here and sent price lower, but it doesn't do it so that PD array fails and
56 00:05:15 --> 00:05:19 trades above it. Now that we're on the other side of the curve here, we're
57 00:05:19 --> 00:05:23 coming back up into it there. And when it comes an inversion fair value gap
58 00:05:23 --> 00:05:27 here, because we're looking for it to run up into this inefficiency there, or
59 00:05:27 --> 00:05:32 at the very minimum, the high of this self under balance by sign efficiency,
60 00:05:32 --> 00:05:37 which is this line as the high, this line as the low. It's this candle is
61 00:05:37 --> 00:05:43 high. This candle is low. That one single down closed candle portion.
62 00:05:43 --> 00:05:48 That's the sell side of balance spots on efficiency. So inside the upper portion
63 00:05:48 --> 00:05:51 of that, we have a premium rate in the form of a inversion fair value gap,
64 00:05:51 --> 00:05:56 where this also is an inversion fair value gap. You can see how price runs
65 00:05:56 --> 00:06:03 from the low of this here, right on that candlesticks low trade into here, and
66 00:06:03 --> 00:06:08 then spring up through this inversion fair value gap. And then look at the
67 00:06:08 --> 00:06:13 body stopping right there in consequent encroachment of this. See the blue
68 00:06:13 --> 00:06:18 dashed line, or dotted line rather. That's the midpoint. That's what you're
69 00:06:18 --> 00:06:22 seeing here. It trades up to here, stops, goes down, goes above. It uses it
70 00:06:22 --> 00:06:28 as a discount array, after wicking into this buy side of balance, cell sign
71 00:06:28 --> 00:06:32 efficiency, which is institutional order flow entry. Joe, now go back. Keep this
72 00:06:32 --> 00:06:37 in mind. Okay, keep this in mind, and then look at what it was doing over here
73 00:06:37 --> 00:06:42 too, for this reclaimed, bullish fair value gap. So there's a confluence of
74 00:06:42 --> 00:06:48 three things here, institutional reform entry drill that's called encroachment,
75 00:06:48 --> 00:06:53 failing to be traded to on a bullish fair value gap that's being reclaimed.
76 00:06:53 --> 00:06:58 And then you're seeing that institutional refund entry drill, and
77 00:06:59 --> 00:07:04 we're in the lower quadrant of this inversion, fair value gap on the daily
78 00:07:04 --> 00:07:08 chart. And the bodies are supporting the idea that it's bullish. Why? Because
79 00:07:08 --> 00:07:12 this candle, when it wicked down into it, look where it stopped, the midpoint
80 00:07:12 --> 00:07:15 or consequence encroachment of this inversion fair value gap on the daily
81 00:07:15 --> 00:07:21 chart. Then it price sent it up into the premium array seen inside the high end
82 00:07:21 --> 00:07:25 of this cell phone, advanced bioscience efficiency in the form of an inversion
83 00:07:25 --> 00:07:29 fair value gap. Now I know if you're brand new or relatively new to my
84 00:07:29 --> 00:07:34 concepts, that was a whole lot of stuff in there, and I can understand it. If
85 00:07:34 --> 00:07:37 you're thinking to yourself, there's no way I would have seen that. It's only
86 00:07:37 --> 00:07:40 because you haven't spent enough time looking through it. Okay, I promise you
87 00:07:41 --> 00:07:45 all of my students, every single one of them that have become proficient with
88 00:07:45 --> 00:07:49 inversion, fair value gaps and fair value gaps. If they could go back to the
89 00:07:49 --> 00:07:51 first time I talked about them, they were scratching their head too, like I
90 00:07:51 --> 00:07:54 don't understand what you've talked about now. They're in there and just
91 00:07:54 --> 00:07:57 picking them and trading them and doing all kinds of stuff with them. You got to
92 00:07:57 --> 00:08:00 give yourself time, and you get that by practicing and journaling. All right,
93 00:08:03 --> 00:08:07 we're going to segue right into the British pound versus the US dollar
94 00:08:08 --> 00:08:13 currency pair and the lecture. So I'm going to cover a number of things
95 00:08:13 --> 00:08:17 tonight, and I'm going to prove to you that I can teach it right to the point,
96 00:08:17 --> 00:08:19 but you're not going to be satisfied, because you're going to feel like
97 00:08:19 --> 00:08:24 there's something missing, but I promise you, there's nothing missing. So we have
98 00:08:24 --> 00:08:30 the 15 minute time frame, pound dollar pair. And what I'm teaching here while
99 00:08:30 --> 00:08:36 I'm teaching it over the the medium of a forex currency pair. This is the same
100 00:08:36 --> 00:08:39 thing I do when I'm trading the NASDAQ. It's the same thing I do when I'm
101 00:08:39 --> 00:08:44 trading commodities. It's the same thing I do when I trade. Es, same thing I did
102 00:08:44 --> 00:08:48 when I was trading the bond market. Everything, everything that's traded
103 00:08:49 --> 00:08:55 uses this logic. Okay, so 15 minute time frame, we have a sales on balance, buy
104 00:08:55 --> 00:08:59 something efficiency. It's a city. It's a fair value gap, but it's classified as
105 00:08:59 --> 00:09:05 a city because it's a down closed candle. This candle sticks low and this
106 00:09:05 --> 00:09:11 candle sticks high. And the candle prior to that is this one singular long, down,
107 00:09:11 --> 00:09:17 closed portion that is sell side imbalance. It's inefficient because it
108 00:09:17 --> 00:09:21 doesn't have price being delivered in that same range defined by this
109 00:09:21 --> 00:09:25 candlesticks low, and this candle sticks high. So we're going to look inside this
110 00:09:25 --> 00:09:30 area right here. I'm going to give you the highest tier of understanding order
111 00:09:30 --> 00:09:35 flow. And you don't need anything with these retail gimmicks like level two
112 00:09:35 --> 00:09:38 data. It sounds technical. It sounds like the professionals. You know, it's
113 00:09:38 --> 00:09:43 their tool. It's not okay, I promise you, it's it's spoofed many times. You
114 00:09:43 --> 00:09:48 don't need footprint, okay? You don't need DOMs, ladders, depth of market. You
115 00:09:48 --> 00:09:53 don't need any of those things. Okay? So we're going to dive into that now, left
116 00:09:53 --> 00:09:58 hand side, five minute chart. Right hand side, one minute chart. So on the left
117 00:09:58 --> 00:10:02 hand side you can see how. Now during the Non Farm Payroll, which you should
118 00:10:02 --> 00:10:05 not have been trying to trade, by the way, because NFP is what it stands for.
119 00:10:06 --> 00:10:10 It's Non Farm Payroll. It's the employment data. But around here we
120 00:10:10 --> 00:10:16 refer to it as not for professionals. So the market opens up, does its circus
121 00:10:16 --> 00:10:20 act, and runs right up into an inversion fair bag, up on the 15 minute time
122 00:10:20 --> 00:10:24 frame. You know, this gap, because of what I was covering so far this week, it
123 00:10:24 --> 00:10:27 just reversed its role because we were below it came up, hit it as an inversion
124 00:10:27 --> 00:10:31 fair value gap, that's probably random, and then trades lower. And then one more
125 00:10:31 --> 00:10:37 time, we drive right back up into the lower quadrant of this gap, which is the
126 00:10:37 --> 00:10:42 wick. So counsel you to think about that right there, measuring that on your fib
127 00:10:44 --> 00:10:50 don't trust my charts or my commentary alone. The market rolls over and creates
128 00:10:50 --> 00:10:54 this inefficiency on the 15th time frame. But you notice that it doesn't
129 00:10:54 --> 00:10:58 look the same as it did on the 15th time frame, because it looks like we opened
130 00:10:58 --> 00:11:02 here, traded down, then opened here, went down a little bit, and opened here
131 00:11:02 --> 00:11:05 and opened here and went down. So how's that an inefficiency here? Wouldn't it
132 00:11:05 --> 00:11:09 just be this portion is the inefficiency? Well, on the five minute
133 00:11:09 --> 00:11:13 chart, it is, but we're looking at it from a price delivery continuum. Okay,
134 00:11:13 --> 00:11:20 so what I constantly do is I'm going through time frames every single time
135 00:11:20 --> 00:11:26 that we close one full hour trading at the top of every 60 minutes. I'm
136 00:11:26 --> 00:11:30 referring back to the hourly chart. I want to get a feel for where we're at.
137 00:11:30 --> 00:11:34 Was there any inefficiencies? Is it respecting in any efficiencies? Is it
138 00:11:34 --> 00:11:38 aiming for buy side or sell side? That is on that time frame? I'm not living on
139 00:11:38 --> 00:11:41 the 60 minute chart. I'm just referring to it at the top of the hour, every
140 00:11:41 --> 00:11:48 single time we get a new hour start, every 15 minute time frame, the same
141 00:11:48 --> 00:11:54 thing every single time we close a 15 minute interval. I'm going back to the
142 00:11:54 --> 00:11:58 15 minute time frame, and I'm cycling through that information that's on that
143 00:11:58 --> 00:12:03 chart. And imagine what we just did showed the 15 minute time frame and then
144 00:12:03 --> 00:12:08 dropping back from the 15 down to the five minute chart every five minutes.
145 00:12:08 --> 00:12:13 I'm going back to the five minute chart. I'm only looking at it until we get a
146 00:12:13 --> 00:12:17 new five minute close. So when a candlestick on the five minute time
147 00:12:18 --> 00:12:21 frame closes and a new one begins, I'm going back to that five minute chart and
148 00:12:21 --> 00:12:26 referring back to it. Now, when you see me doing my trade examples, many times,
149 00:12:26 --> 00:12:29 it's just me showing you on a one minute chart, but I'm telling you what I'm
150 00:12:29 --> 00:12:35 doing. I'm cycling through the time frames just like that. So that is my
151 00:12:35 --> 00:12:39 price delivery continuum theory. That means I'm constantly cycling through all
152 00:12:39 --> 00:12:42 those time frames. It's not top down analysis. It's cycling through
153 00:12:42 --> 00:12:47 continuously looking for algorithmic PD arrays where price is going to respect,
154 00:12:47 --> 00:12:52 respect to a degree and then maybe fail. And that gives me information. I'm
155 00:12:52 --> 00:12:57 constantly feeding my attention with these things that are on these specific
156 00:12:57 --> 00:13:01 time frames, and I'm not living on those time frames, because all I have to do is
157 00:13:01 --> 00:13:04 refer to it real quick and see where I'm at and then go right back to that one
158 00:13:04 --> 00:13:09 minute chart here. This little area here is that 15 minute time frame, fair value
159 00:13:09 --> 00:13:15 gap or city. But it looks different because it takes up what it takes three
160 00:13:15 --> 00:13:19 of these candlesticks to make that 115 minute candle. So let's get some detail
161 00:13:19 --> 00:13:24 here. So we're gonna, again, use the high of that fair value gap. So I'm
162 00:13:24 --> 00:13:32 darkening up here, and then this one here, that's your range, and side of
163 00:13:32 --> 00:13:38 that range we're going to be studying with a lot more detail, with both of
164 00:13:38 --> 00:13:42 these levels now understood that that's the 15 minute time frames high and low
165 00:13:42 --> 00:13:48 of a severe value gap or city look over here on a one minute chart. So we
166 00:13:48 --> 00:13:51 watched at the beginning of the discussion on POUND DOLLAR, I showed you
167 00:13:51 --> 00:13:56 the 15 minute time frame and the very specific fair value gap, then on the
168 00:13:56 --> 00:14:02 five minute chart, and then now that same gap being viewed on a one minute
169 00:14:02 --> 00:14:08 chart. So right away you see this inefficiency. You see this inefficiency.
170 00:14:08 --> 00:14:11 So what do you, what do you do? What do you do with that information? Michael,
171 00:14:11 --> 00:14:15 how do you? How do you navigate that? Well, you certainly don't go to level
172 00:14:15 --> 00:14:18 two, and you certainly don't need to pull up a footprint. You don't need to
173 00:14:18 --> 00:14:24 do anything with DOMs, uh, V wop, all those things. I promise you, none of
174 00:14:24 --> 00:14:31 that stuff is necessary. Everything you see here as it relates to time and the
175 00:14:31 --> 00:14:35 open, high, low and close, that's all you need, folks, I promise you, if you
176 00:14:35 --> 00:14:38 know where the mark is likely to go, that's the bias, the draw and liquidity.
177 00:14:38 --> 00:14:43 If you know that open, high, low and close, and the time of the day or the
178 00:14:43 --> 00:14:46 session is all that you need. I promise you. I'm going to prove it to you today.
179 00:14:49 --> 00:14:54 So what we have here is this shaded area from this candlesticks low and this
180 00:14:54 --> 00:15:00 candlesticks high, that is the basis of that 15 minute fair value gap. But. It's
181 00:15:00 --> 00:15:05 being shown on a five minute chart here. So if we look at that same range on the
182 00:15:05 --> 00:15:09 one minute chart, there's some characteristics in here that I want you
183 00:15:09 --> 00:15:13 to notice. Now I've spoken on this before, but I kind of like want to bring
184 00:15:13 --> 00:15:17 everything together and synergize everything, so that way you can see how
185 00:15:17 --> 00:15:21 the algorithm fires off and refers back to these price points. When I first
186 00:15:21 --> 00:15:25 started teaching, I would look at the charts and I'd say, All right, now my
187 00:15:25 --> 00:15:29 students are going to want to be looking for something that reoccurs. So I
188 00:15:29 --> 00:15:34 started by labeling things as points of interest, okay? And now everybody refers
189 00:15:34 --> 00:15:37 to them in their own little mentorships as POIs, or, you know, something to that
190 00:15:37 --> 00:15:42 effect. But it all comes from my mentorship level, lessons and stuff.
191 00:15:43 --> 00:15:47 When we refer to a point of interest, the point of interest that's most
192 00:15:47 --> 00:15:51 important when we're looking at a fair value gap is when we're looking at a
193 00:15:51 --> 00:15:56 bearish fair value gap. We want to study the upper half of it first, because the
194 00:15:56 --> 00:15:59 upper half of that fair value gap, when it's bearish is going to tell you a
195 00:15:59 --> 00:16:04 great deal of information. And when you're looking at bullish fair value
196 00:16:04 --> 00:16:08 gaps, you're going to be looking at the lowest portion, or the lower half of it.
197 00:16:09 --> 00:16:14 What I mean by that? Well, if you look at the price action over here, price
198 00:16:14 --> 00:16:22 drops down and comes right back up. Then it opens here, it trades down halfway
199 00:16:22 --> 00:16:27 and comes back up. And then the next candle, it opens, trades down and
200 00:16:27 --> 00:16:36 closes. And the next candle does what it does here, it takes three candles in
201 00:16:36 --> 00:16:41 this time frame to make 115 minute candlestick. So when you're looking at
202 00:16:41 --> 00:16:45 price, what you're focusing on is the upper half, when it's a bearish fair
203 00:16:45 --> 00:16:50 value gap. So we're splitting it in half. This shaded area over here on the
204 00:16:50 --> 00:16:57 five minute chart is this shaded area over here on the one minute chart, this
205 00:16:57 --> 00:17:03 back and forth price action in the upper half of that is a balanced price range.
206 00:17:03 --> 00:17:07 What makes it balanced? The fact that we're in the upper half of a bearish
207 00:17:07 --> 00:17:13 fair value gap. So the upper half, if you see back and forth price delivery,
208 00:17:13 --> 00:17:18 that is not inefficient. This drop down in here from the middle of the shaded
209 00:17:18 --> 00:17:25 area up here, all this single candlestick right there that is not an
210 00:17:25 --> 00:17:30 inefficient price delivery. It's extremely efficient. Why? Because the
211 00:17:30 --> 00:17:34 first candle dropped down into here, and then we went back up over top of that
212 00:17:34 --> 00:17:40 same range in here, went outside of that level that we're identifying as the high
213 00:17:40 --> 00:17:45 of the 15 minute city, and then returns back inside the range and stops halfway
214 00:17:45 --> 00:17:49 again, and then release once more, and the bodies are respecting the upper half
215 00:17:50 --> 00:17:56 high of that city. Then it drops aggressively lower. Now, if you're not
216 00:17:56 --> 00:17:59 looking at price the way I'm showing you here, which is why you got a lot of
217 00:17:59 --> 00:18:03 these mentors out there that are trying to teach my stuff, SMC concepts, and
218 00:18:03 --> 00:18:08 they don't ever mention me, because if they do, they have no they have no
219 00:18:08 --> 00:18:13 presence anymore. They don't have any any voice, because they won't go to them
220 00:18:13 --> 00:18:16 and pay them. They'll be just right here at the YouTube channel where it's
221 00:18:16 --> 00:18:21 authors teaching it. They'll call this a fair value, gap, and now look for this
222 00:18:21 --> 00:18:27 to try to close in and fill the numbers. And that won't happen here. It will not
223 00:18:27 --> 00:18:31 happen. Why? Because it's efficiently delivered back and forth price action,
224 00:18:31 --> 00:18:36 and then it trades down into the lower half and then validates it as a fair
225 00:18:36 --> 00:18:40 value gap. So once the fair value gap is there on a 15 minute time frame, or any
226 00:18:40 --> 00:18:44 time frame, you drop down the lower time frames, and you study what price
227 00:18:44 --> 00:18:48 actually did in the upper half when it's a bearish fair value gap, or you study
228 00:18:48 --> 00:18:51 the lower half when it's a bullish fair value gap. On a lower time frame chart,
229 00:18:52 --> 00:18:56 when price goes back and forth in the upper half, it becomes balanced. There's
230 00:18:56 --> 00:19:00 no need for price to come back up in this shaded area over here, when it
231 00:19:00 --> 00:19:07 starts to return back inside of it, and watch, we're gonna take a huge leap when
232 00:19:07 --> 00:19:12 do fair value gaps form inside the quarters. Now that's not quarters
233 00:19:12 --> 00:19:16 theory. Okay, I already know some of you guys are running around right now. You
234 00:19:16 --> 00:19:19 can't wait to go on the X and go on the Instagram and say, This is what
235 00:19:19 --> 00:19:23 Michael's been using all of its quarters. Wrong, wrong. What I'm talking
236 00:19:23 --> 00:19:28 about is time so if we were looking at the time of 10 o'clock in the morning,
237 00:19:28 --> 00:19:32 Eastern Standard Time, from 10 o'clock at the top of the hour to 1015 there's
238 00:19:32 --> 00:19:38 going to be a fair value gap that forms every time frame. But whatever time
239 00:19:38 --> 00:19:42 frame you're trading on, you work with that information, and then that means
240 00:19:42 --> 00:19:48 there's four potential fair value gaps that form per hour. Now the app pupil
241 00:19:48 --> 00:19:51 will think about that for a moment and say, wow, there's potentially a scalp
242 00:19:51 --> 00:19:58 every 15 minutes. Yes, that's high frequency trading algorithm. That's high
243 00:19:58 --> 00:20:03 frequency trading algorithm. Quickly. It's also knowing that you don't have to
244 00:20:03 --> 00:20:06 take the trade that you just missed and have any regret, because there's going
245 00:20:06 --> 00:20:10 to be another one, just like a bus. Remember, I taught how that's a bus, the
246 00:20:10 --> 00:20:14 bus route schedule, every 15 minutes there's something coming around the bend
247 00:20:15 --> 00:20:18 again. Now for some of you that just simply want to trade on a daily chart or
248 00:20:18 --> 00:20:23 higher time frames, it won't be that. It won't be like that for you, but for the
249 00:20:23 --> 00:20:25 price action you know
250 00:20:27 --> 00:20:30 means that I create. We're in these lower time frames, because there's a
251 00:20:30 --> 00:20:36 plethora of opportunity, and these opportunities are extremely abundant. So
252 00:20:36 --> 00:20:43 every quarter so 10 to 1015 there's a fair value gap forming. 1015, to 1030
253 00:20:44 --> 00:20:47 there's a fair value gap forming. Between 1030, to 1045 there's a fair
254 00:20:47 --> 00:20:52 value fair value gap forming. And 1045 to 11 o'clock, there's a fair value gap
255 00:20:52 --> 00:20:58 forming on whatever time frame that you see that form, whether it be the 15
256 00:20:58 --> 00:21:03 minute, the five minute, either one of those, you're going to see one of these
257 00:21:03 --> 00:21:07 fair value gaps form every single 15 minute time frame. When you have the
258 00:21:07 --> 00:21:10 draw on liquidity, it will be there. Now, if the market's going to be range
259 00:21:10 --> 00:21:14 bound, it might not create that. Because why we're going to be in a high
260 00:21:14 --> 00:21:18 resistance liquidity run conditions, that means there won't be fair value
261 00:21:18 --> 00:21:22 gaps forming, which is the reason why I teach the number one premise is, are we
262 00:21:22 --> 00:21:26 in low resistance or high resistance? Liquidity running conditions? If you're
263 00:21:26 --> 00:21:30 seeing fair value gaps not materialized, then you're in high resistance. Sit and
264 00:21:30 --> 00:21:36 wait. Wait for what? Wait till the next 15 minutes. And then, if it's the same
265 00:21:36 --> 00:21:40 way there, wait 15 minutes longer. And you do that all the way until you get to
266 00:21:40 --> 00:21:43 the end of the session, if the entire session was high resistance, you did
267 00:21:43 --> 00:21:50 nothing and you took no trade come back the following afternoon or next trading
268 00:21:50 --> 00:21:56 day. Now, what can you use this information when it's a balanced price
269 00:21:56 --> 00:22:02 range? Well, it identifies what the lower half as, what an imbalanced price
270 00:22:02 --> 00:22:07 range. Why is it imbalanced? Because it leaves the upper half here and it only
271 00:22:07 --> 00:22:13 sells off. There's no up candle to the midpoint of it. But sell side imbalance,
272 00:22:13 --> 00:22:17 buy side inefficiency, meaning that it needs to offer price back up to the
273 00:22:17 --> 00:22:21 midpoint. That's what you'd be waiting for. That's what the algorithm is doing.
274 00:22:22 --> 00:22:26 Buying pressure is not bringing up and stopping it dead against tracks halfway.
275 00:22:26 --> 00:22:31 That's algorithmic price delivery. It's going to offer that price over a
276 00:22:31 --> 00:22:35 continuous delivery. Higher, higher, higher, higher. No matter how many
277 00:22:35 --> 00:22:39 people come in wanting the short, no matter how many people are reluctant to
278 00:22:39 --> 00:22:44 buy, it does not matter. Okay, so when you're looking at depth of market, level
279 00:22:44 --> 00:22:50 two, footprint, all these things, the market doesn't care. It doesn't care
280 00:22:50 --> 00:22:55 about the number of contracts. It does not care. It doesn't care. Now the
281 00:22:55 --> 00:23:02 number of contracts is the life's blood of what you can get filled on trades,
282 00:23:03 --> 00:23:07 but the delivery mechanism has absolutely no care, no concern, for the
283 00:23:07 --> 00:23:11 actual number of trades being booked, which is why I'm trying to tell you, and
284 00:23:11 --> 00:23:16 I've been telling you since I started teaching it, that this algorithm that
285 00:23:16 --> 00:23:20 exists is a price engine. It will deliver right to these specific PD
286 00:23:20 --> 00:23:24 arrays and their consequent encroachment. There's no way, there's
287 00:23:24 --> 00:23:27 absolutely no way, that buying and selling pressure would deliver that. It
288 00:23:27 --> 00:23:30 would be random distribution. There would be all kinds of different highs
289 00:23:30 --> 00:23:34 and lows for me, but they're stopping dead in its tracks, where I tell you it
290 00:23:34 --> 00:23:40 stops. That is authorship. That's something that you can't go around. You
291 00:23:40 --> 00:23:44 can't hide from that. You can't chase it down and say, I'm going to beat it into
292 00:23:44 --> 00:23:47 submission and say it's something else. It's not anything but algorithmic price
293 00:23:47 --> 00:23:52 delivery. That means the price engine will offer that midpoint consequence
294 00:23:52 --> 00:23:56 encroachment, because that's exactly what it's scripted and designed to do.
295 00:23:57 --> 00:24:03 So the market trades up in there and then efficiently delivers buy side. So
296 00:24:03 --> 00:24:07 now there is no inefficiency for for buy side delivery. So we had sell side
297 00:24:08 --> 00:24:13 imbalance, buy side inefficiency, the portion that's inefficient on buy side
298 00:24:13 --> 00:24:17 is the lower half. Why? Because we only had a single pass with this candles,
299 00:24:18 --> 00:24:22 halfway point right here, where the shades of the boxes change color from
300 00:24:22 --> 00:24:26 that point down to the low of that shaded area. Or specifically, this
301 00:24:26 --> 00:24:32 candle sticks high. It's only offered sell side delivery. That means movement
302 00:24:32 --> 00:24:37 lower. So because the market is algorithmic, because it's controlled,
303 00:24:38 --> 00:24:41 because it's rigged, and you should be thankful that it is because if it wasn't
304 00:24:41 --> 00:24:44 rigged, I would not be able to do these things. I would not be able to tell you
305 00:24:44 --> 00:24:47 it's going to stop here, turn around, go with this candle, stop here, go higher,
306 00:24:47 --> 00:24:50 and I certainly wouldn't be able to execute on it, right? But you keep
307 00:24:50 --> 00:24:55 seeing it now, my students are learning how to do it too well. Delivering price
308 00:24:55 --> 00:25:01 up to the halfway point here satisfies the coding in that. Algorithm. It need
309 00:25:01 --> 00:25:07 not go any higher. So now we're going to take a huge leap in understanding. Okay,
310 00:25:08 --> 00:25:13 this is the inefficiency that really matters in that 15 minute time frame,
311 00:25:13 --> 00:25:22 fair Vega. It's also this portion here on a five minute fair value gap. But you
312 00:25:22 --> 00:25:25 won't be confused by looking at the 15 minute time frame fair value gap and
313 00:25:25 --> 00:25:31 think it has to close in the upper half of it, because it doesn't that becomes a
314 00:25:31 --> 00:25:35 balanced price range. So using the price delivery continuum theory, which is
315 00:25:35 --> 00:25:40 working from higher Time Frame, lower, lower, higher Time Frame, lower, lower,
316 00:25:40 --> 00:25:44 you're constantly cycling through every time a new 15 minute candlestick forms
317 00:25:44 --> 00:25:49 or begins. You refer back to that 15 minute candlestick chart and see where
318 00:25:49 --> 00:25:53 you're at. What inefficiencies are there? Did it form one? Did it close in
319 00:25:53 --> 00:25:57 or deliver the numbers? Okay? If it didn't fill the numbers on the
320 00:25:57 --> 00:26:01 inefficiency, in other words, close in and overlap the inefficiency of a fair
321 00:26:01 --> 00:26:06 value gap, then you're constantly waiting for that information to be
322 00:26:06 --> 00:26:10 delivered in price action. But if price is showing things like we're showing
323 00:26:10 --> 00:26:14 here, where it's working the upper half and it's a bearish fair value gap, you
324 00:26:14 --> 00:26:20 can anticipate that that five minute portion here is the real fair value gap,
325 00:26:21 --> 00:26:26 because we've done the work of looking at actual price delivery. We don't need
326 00:26:26 --> 00:26:29 to look at orders. We don't need to know how many contracts were were traded.
327 00:26:29 --> 00:26:34 Because it doesn't matter. The algorithm doesn't see your stop. It doesn't see
328 00:26:34 --> 00:26:39 how many contracts were traded at a particular range of price action. It
329 00:26:39 --> 00:26:44 doesn't refer to that folks, it can't that's too much of an effort to code
330 00:26:44 --> 00:26:49 that the only thing it refers back to is number one time, and then it works on
331 00:26:49 --> 00:26:53 the open, high, low and close. It doesn't use hike and ashy. It doesn't
332 00:26:53 --> 00:26:58 use Ichimoku candlesticks. It doesn't use, you know, whatever else, candy bar
333 00:26:59 --> 00:27:03 nickname they want to give their stuff. It only usually open high, low and close
334 00:27:03 --> 00:27:13 on a time based delivery. Okay, so let's take a huge leap forward from this. This
335 00:27:13 --> 00:27:19 portion, it's not gonna it's not gonna close in. It's not gonna overlap that
336 00:27:19 --> 00:27:24 portion. It's not going to fill the numbers on the upper half of that
337 00:27:24 --> 00:27:29 bearish fair value gap. Now, if it's not going to do that, folks on a 15 minute
338 00:27:29 --> 00:27:35 time frame, what does it make it what can you do with that information? Number
339 00:27:35 --> 00:27:40 one, it helps you with stop placement. Your stop can be in the upper quadrant
340 00:27:40 --> 00:27:45 of that known area right there, because that's not likely to fill. More
341 00:27:45 --> 00:27:50 conservative approach would be put your stop loss just above that shaded area
342 00:27:50 --> 00:27:57 here, for quadrant is fine, consequent encroachment. I wouldn't do that. It's a
343 00:27:57 --> 00:28:01 little too close, and the spread might get you because we allow the wicks to do
344 00:28:01 --> 00:28:06 damage. But if we were to get stopped out using this information, as long as
345 00:28:06 --> 00:28:10 we traded back up into the lower half of this portion, should not offer the
346 00:28:10 --> 00:28:13 filling of the numbers. I mean, the upper half of that 15 minute time frame
347 00:28:13 --> 00:28:17 fair value got, I would re enter the short and place the stop loss again into
348 00:28:17 --> 00:28:21 the upper quadrant of it, or just above the high with half the number of
349 00:28:21 --> 00:28:27 contracts that I just took. Okay? So now we've covered stop loss placement. We
350 00:28:27 --> 00:28:32 understand how to properly handle inefficiencies when they're bullish or
351 00:28:32 --> 00:28:39 bearish. I told you when they form, every single 15 minute time, every
352 00:28:39 --> 00:28:44 interval of 15 minutes, there's one forming from the 15 minute into the five
353 00:28:44 --> 00:28:47 minute, back and forth. You're going to cycle through there every 15 minutes.
354 00:28:48 --> 00:28:51 Here's the thing that you need to have your notes now, if you're noticing that
355 00:28:51 --> 00:28:55 it's not happening, if it's not forming one in the 15 minute chart or the five
356 00:28:55 --> 00:28:59 minute chart, then you're in high resistance liquidity run conditions, and
357 00:28:59 --> 00:29:04 you need to sit still, wait for that 15 to five minutes to shift into where
358 00:29:04 --> 00:29:07 they're offering fair value gaps. It need not trade into the fair value gap
359 00:29:07 --> 00:29:12 in that 15 minute interval time. It just means that you have to see them forming,
360 00:29:12 --> 00:29:16 because that's the algorithm posting little areas where it's going to refer
361 00:29:16 --> 00:29:22 back to later on. It's like you see a bus stop that you need to get a bus ride
362 00:29:22 --> 00:29:26 at, and you're walking to the bus stop, but you know you're not going to make it
363 00:29:26 --> 00:29:30 in time. Okay. Well, you're you're heading that direction to the bus stop
364 00:29:30 --> 00:29:33 because, you know, in 15 minutes, it's likely to have another bus come there,
365 00:29:33 --> 00:29:39 and you can get a ride on that. You see how that absolutely removes the FOMO,
366 00:29:40 --> 00:29:43 like there's no reason for you to fear missing a move. There's no reason for
367 00:29:43 --> 00:29:47 you to be obsessively worrying about are you going to find a trade setup today? I
368 00:29:47 --> 00:29:52 know I'm going to find one every day, but I demand that it's in a low
369 00:29:52 --> 00:29:56 resistance, liquid run condition for me to trade every single session. Every
370 00:29:56 --> 00:30:02 single day. I can trade every single 60 minute. Candlestick, okay? Because I
371 00:30:02 --> 00:30:06 have four opportunities to do something, aim for a fair value gap or use the fair
372 00:30:06 --> 00:30:12 value gap that's formed in one of those 15 minute time frames. In terms of time,
373 00:30:12 --> 00:30:17 I have an opportunity forming. I have an opportunity presented to me now. It may
374 00:30:17 --> 00:30:20 not engage the fair value gap that it formed in the previous 15 minute time
375 00:30:20 --> 00:30:25 frame. That's fine. I'm waiting for one where everything lines up. Now, what
376 00:30:25 --> 00:30:25 does that mean?
377 00:30:27 --> 00:30:34 Well, if we look for setups that are drawing towards a buy side liquidity,
378 00:30:34 --> 00:30:38 then I'm going to be looking for fair value gaps that are bullish, or I want
379 00:30:38 --> 00:30:43 to see bearish fair value gaps fail and then become inversion fair value gaps.
380 00:30:43 --> 00:30:47 See the logic there. It's not complicated. It's absolutely not
381 00:30:47 --> 00:30:51 complicated. But I understand if you're new, if you haven't really spent that
382 00:30:51 --> 00:30:54 much time with my concepts, this still sounds like a foreign language to you,
383 00:30:54 --> 00:30:57 and I understand. But the people that have been studying for a while with me,
384 00:30:57 --> 00:31:00 their gears are turning right now. They're literally chomping at the bit.
385 00:31:00 --> 00:31:04 They can't wait until Monday now. So and that's good, that's what I want. I want
386 00:31:04 --> 00:31:07 you to be excited about learning. I want you to be engaged. Okay, if you're not
387 00:31:07 --> 00:31:10 engaged, you won't be happy about what you're you're studying, and you won't be
388 00:31:10 --> 00:31:14 inspired to continue doing it, because it's going to be hard work, despite what
389 00:31:14 --> 00:31:17 I'm making it sound like here. But if we know that this is not going to fill the
390 00:31:17 --> 00:31:21 numbers, that means closing the gap portion on here, on the one minute
391 00:31:21 --> 00:31:29 chart. What does that make it it makes it a breakaway gap it's not likely to
392 00:31:29 --> 00:31:33 fill. So when you watch me in my executions, and I'm recording
393 00:31:33 --> 00:31:39 annotations and such, I'm explaining to you with real time observation that I
394 00:31:39 --> 00:31:43 believe that that portion should stay open, and if it does, it's a breakaway
395 00:31:43 --> 00:31:47 gap, meaning that we're going to, unlikely see a lot of movement lower and
396 00:31:48 --> 00:31:54 look what it did here. And when do you have all these things come together as a
397 00:31:54 --> 00:31:59 perfect Blue Ribbon recipe for a trade setup or idea that isn't so high order,
398 00:32:00 --> 00:32:06 odds in your favor. What do we what do we utilize there to kind of facilitate
399 00:32:06 --> 00:32:19 that? My macro, time, 10:50am, to 1110, macro, hello, Southbound Train, baby.
400 00:32:21 --> 00:32:26 Let close candles consecutively are a bearish order block. That's not a supply
401 00:32:26 --> 00:32:31 zone, okay? It's the change in the state of delivery, which is the lowest opening
402 00:32:31 --> 00:32:40 price of these consecutive candlesticks. It's inside of this portion of what the
403 00:32:40 --> 00:32:46 lower half of that 15 minute time frame. Fair value gap. That's the only portion
404 00:32:46 --> 00:32:51 it needs to trade to. So now look at all the confluences. This portion is
405 00:32:51 --> 00:32:58 balanced. This portion is imbalanced. It's inefficient with buy side. This buy
406 00:32:58 --> 00:33:04 side offered here is perfect delivery, and you have the change in the state of
407 00:33:04 --> 00:33:09 delivery here at the time that the algorithm will fire off and start
408 00:33:09 --> 00:33:13 offering lower prices regardless of how many people want to buy it. It does not
409 00:33:13 --> 00:33:18 matter how many people are short selling it, either. That's why you have markets
410 00:33:18 --> 00:33:24 that have very low volume. But you see huge candlesticks, and they'll say, Oh,
411 00:33:24 --> 00:33:28 the market's just running out of buyers. That's not what it is. The algorithm is
412 00:33:28 --> 00:33:35 offering prices lower, skipping big time, just running down there. And all
413 00:33:35 --> 00:33:39 they need is one contract to print to make that candlestick look however they
414 00:33:39 --> 00:33:43 want it to. And there's always something someone coming in with a market order to
415 00:33:43 --> 00:33:49 buy or sell. There's liquidity resting in the marketplace. So as soon as the
416 00:33:49 --> 00:33:53 algorithm keeps offering lower prices, and they do it real sudden and quick,
417 00:33:55 --> 00:34:01 everything proves, in hindsight, that these moves are quick and sudden, but
418 00:34:01 --> 00:34:06 they don't usually get seen in advance, because you're looking at things that
419 00:34:06 --> 00:34:11 are going to mask it footprint, looking at how many contracts were traded here
420 00:34:11 --> 00:34:16 on the on the previous volume, and we're looking at volume profile, or I'm
421 00:34:16 --> 00:34:21 looking at a point of control, or I'm looking At a V wop, or I'm looking at
422 00:34:21 --> 00:34:26 whatever. All those things are distracting you. They're not going to
423 00:34:26 --> 00:34:31 tell you the time when the setup is going to form. I am. They're not going
424 00:34:31 --> 00:34:36 to tell you when these PD arrays are going to form. I am. You're not going to
425 00:34:36 --> 00:34:42 see which one of those levels on price ladders, DOMs, which one of all those
426 00:34:42 --> 00:34:46 things above the marketplace or below the marketplace is it going to stop and
427 00:34:46 --> 00:34:50 turn around on you don't know that, and no one using that information does.
428 00:34:50 --> 00:34:57 They're just guessing. I promise you, that is all nonsense. Look at what this
429 00:34:57 --> 00:35:01 is showing you here, folks. See here. Seriously, it's ridiculous when you
430 00:35:01 --> 00:35:07 compare it with everything else. What you think and believe about me aside.
431 00:35:07 --> 00:35:13 Okay, listen to me. What I just gave you in this lecture tonight is the golden
432 00:35:13 --> 00:35:19 ticket. You never need to buy another mentorship, you never need to look at a
433 00:35:19 --> 00:35:23 signal service. You never need to look at a live streamer and try to copy them.
434 00:35:24 --> 00:35:29 Never. You never need to do that now, because what I've given you here is the
435 00:35:29 --> 00:35:32 actual thing I'm cycling through while I'm watching price action, and I'm
436 00:35:32 --> 00:35:35 waiting for these setups, and I'm waiting for them to form, and I know
437 00:35:35 --> 00:35:40 what I'm looking for. See it provides you context. It's not just some
438 00:35:40 --> 00:35:46 subjective you know, trading on a gut feeling. I'm not trusting any
439 00:35:46 --> 00:35:52 indicators, because time is on my side. I know when the setups are going to
440 00:35:52 --> 00:35:55 form. I know when fair value gaps are going to form. Now you know when they're
441 00:35:55 --> 00:36:01 going to form. Every 15 minutes on the 15 or five minute chart. It's forming.
442 00:36:01 --> 00:36:07 If it doesn't, you're in high resistance liquidity. That means sit still. And
443 00:36:07 --> 00:36:12 then you look at time when the macros are forming and fair value gaps are
444 00:36:12 --> 00:36:15 forming, and it's trading into those at the beginning, or going into the
445 00:36:15 --> 00:36:20 beginning of the macro time you know what's coming. The price is going to
446 00:36:20 --> 00:36:25 start spooling. And if you have a degree of understanding of where it's likely to
447 00:36:25 --> 00:36:30 go, Well, look at the previous lecture I gave this week using the POUND DOLLAR
448 00:36:32 --> 00:36:42 this level here, we want to look at it again. Okay, there's your target from up
449 00:36:42 --> 00:36:47 here, down here, peer meeting opportunity here with the institutional
450 00:36:47 --> 00:36:51 order flow entry drill. It doesn't need to fill this. Doesn't need to do
451 00:36:51 --> 00:36:57 anything with this price action. Why? Because you have a breakaway gap that
452 00:36:57 --> 00:37:02 was up here, and this is going to be a measuring gap, so half halfway from it
453 00:37:02 --> 00:37:05 starts dropping is about halfway, and you know that you have another measured
454 00:37:05 --> 00:37:11 move to that level here. It's not complex. It's not difficult. It's
455 00:37:11 --> 00:37:14 difficult and complex for the people that are brand new, or if you didn't
456 00:37:14 --> 00:37:21 really study and back test and log and observe, spending time studying past
457 00:37:21 --> 00:37:26 price moves, journaling news and then watching the tape, real time, all these
458 00:37:26 --> 00:37:31 things that you're trying to worry about adding to your chart, these new
459 00:37:31 --> 00:37:36 gimmicks, I promise you, none of that stuff's going to serve you like you
460 00:37:36 --> 00:37:42 think it will, time and price that will serve you perfectly, and you'll never
461 00:37:42 --> 00:37:46 get the results that I'm showing you here with anything else. You'll never
462 00:37:46 --> 00:37:50 get this precise with anything else, because there's so many different rules
463 00:37:50 --> 00:37:55 of you know, this is that, and that's this. And come on, come on, man, any
464 00:37:55 --> 00:38:01 happening you're still guessing, you're still just using those things as a
465 00:38:01 --> 00:38:05 catalyst to get into a trade, because you don't have a decision mechanism.
466 00:38:06 --> 00:38:12 Time is my decision mechanism. Trade condition, market tone is my decision
467 00:38:13 --> 00:38:17 I'm blending several things. And I know when I'm not wanting to trade. I know
468 00:38:17 --> 00:38:21 when I shouldn't trade, and I counsel you as students to try not to do
469 00:38:21 --> 00:38:26 anything in those critical times like Non Farm Payroll, it makes it harder,
470 00:38:27 --> 00:38:28 but it's not impossible. All
471 00:38:36 --> 00:38:43 right, folks, there you have it. Another chapter in the market wizardry of
472 00:38:43 --> 00:38:47 Michael J Huddleston, hope you found it insightful. Hope you learned something
473 00:38:47 --> 00:38:51 from it, and hope it inspires you to go into your charts next week with a new
474 00:38:52 --> 00:38:57 sense of urgency on how to capture this information. Journal it, log it back.
475 00:38:57 --> 00:39:01 Test it, study it. Do that for a couple weeks up, you know, maybe a couple
476 00:39:01 --> 00:39:05 months. And then once you have a real good collection of what you've seen it
477 00:39:05 --> 00:39:11 in the past, do start doing it real time. Tape reading, no demo account, no
478 00:39:11 --> 00:39:14 funded account challenges, no fund account trading, no live account
479 00:39:14 --> 00:39:19 trading. Tape, read it, watch it live. And I promise you, you're the corners of
480 00:39:19 --> 00:39:24 your mouth is going to ache because you can't stop smiling. Enjoy your weekend,
481 00:39:24 --> 00:39:27 so I'll talk to you next week. Lord willing. Be safe. You.