Wiki source code of OTE Pattern Recognition Notes

Last modified by Drunk Monkey on 2023-01-14 05:38

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30.1	2	{{toc start="2" depth="5" numbered="true"/}}
3.1	3	{{/box}}
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12.1	5	== {{id name="Primer"/}}Optimal Trade Entry Primer ==
1.2	6
3.2	7	* one of many trading patterns, one of the easiest
	8	* trading plan needs to be simple:
	9	** what's your risk model
	10	** how to frame that?
	11	** what makes your entry
	12	** what gives you indicators of bullish/bearish market?
	13	** how do you execute the trade?
	14	** how do you manage the trade?
	15	** where do you take profits?
	16	* what make the market predisposed to go higher or lower?
7.2	17	** look at HTF (M, W, D, 4h) and look for key levels where price has moved away from in the past
13.1	18	** HTF shows where the big players are most likely going to push things around.
3.2	19	** LTF is too noisy to show this detail.
59.2	20	* Assuming bullish market, we are looking for where the market wants to trade higher. {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} is based on buying during the retracements that occur before the further push upwards.
3.2	21	* The impulse move has to incorporate a break in Market Structure.
	22	* Using Fib Retracement as a visual guide, set the following levels
	23	** -1 - Symmetrical Price Swing
	24	** -0.62 - TP2
	25	** -0.27 - TP1
4.1	26	** 0 - First Profit - Scaling
3.2	27	** 0.5 - Equilibrium
	28	** 0.618 - 62% retracement
59.2	29	** 0.705 - {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} 70.5%
3.2	30	** 0.79 - 79%
	31	** 1 - 100%, or likely SL
59.2	32	* {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} (70.5%) is an ideal target. getting deeper is better, but you run the risk of not filling your order. 62% retracement is also acceptable, but it results in smaller profits because our SL range will be larger, necessitating smaller order sizes to maintain our risk profile.
4.1	33	* First Scaling, or slightly before, represents the place to take initial profits. It should be a decent return, preferable better than 1:2 risk/reward, but slightly less than 2 (1.5? 1x75?) is also acceptable.
	34	* Setups on 1h charts better than 5m charts because the pip movements will be larger.
	35	* Key levels xxx.00, xxx.20, xxx.50, xxx.80, yyy.00
7.2	36	* Place the fibs on the body of the candles
	37	* Market structure - example given:
	38	- monthly view
	39	[[image:Screenshot 2020-06-29 at 03.11.56.png]]
	40	\\- daily view
	41	[[image:Screenshot 2020-06-29 at 03.14.02.png]]
	42	\\- 15m view[[image:Screenshot 2020-06-29 at 03.06.46.png]]
23.1	43
7.2	44	* Note the following:
	45	** institutional levels
	46	** old monthly high at 1.1720 (1.17137 rounded)
8.1	47	** price runs down until it hits the 20 level (1.1720), rallies and creates a new short term high (old - middle red line, new STH, top red line. It's also called a "market structure break"
59.2	48	** the new STH makes for a more likely trade opportunity. (market maker model) and opens up the chance for an {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}}.
	49	** also, a high, with two lower highs on either side makes that high more significant. when this high is broken, it's a more convincing move than breaking the other shorter term highs, thus giving us the opportunity to find a likely {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}}.
8.1	50	** at the fib, we see price rockets away from a STL
23.1	51
7.2	52	* when old highs/lows are broken, trades will tend to reach back to those old positions (retail calls it "support")
3.2	53
59.1	54	====== ~[[[top>>doc:WebHome]]] ======
29.1	55
44.2	56	== {{id name="Intro"/}}Introduction - AUDUSD ==
1.2	57
11.1	58	* how to annotate the charts to look for specific price patterns
	59	* study for the patterns for a month, and it'll start to become more easily recognizable as you train your brain to recognize it, then see if you can see it live
19.2	60	* the pattern should appear every day, but not necessarily on the same pairs
	61	* daily chart - audusd, 20-apr-2020 contains two down candles, showing orderblock
	62	[[image:Screenshot 2020-06-29 at 04.21.46.png]]
	63
	64	* the two equal lows in May are sensitive to prices in that order block
	65	[[image:Screenshot 2020-06-29 at 04.23.52.png]]
	66
	67	* we are primarily looking for reactions to the previous days range. (last visible green candle in the picture above)
	68	* can we determine whether the price is going to be able to break the previous days high or low?
	69	[[image:Screenshot 2020-06-29 at 04.50.28.png]]
	70	We can see that the recent lows pushed slightly into the order block, but returned indicating that prices doesn't currently want to run lower.
	71
	72	* AUDUSD 5M example[[image:Screenshot 2020-06-29 at 04.58.02.png]]
	73	Mark out the previous days high and low.
	74	\\The black line (6450) represents the closest institutional or key level near the previous days high. The blue lines above and below are a 10 pip spread.
	75
59.2	76	* The {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} pattern occurs during the 8:30 to 11:00am NY session. That's when the major news and reports tends to come out.
21.1	77	[[image:Screenshot 2020-06-29 at 05.02.49.png\|\|queryString="width=385&height=579" height="579" width="385"]]
59.2	78	The green box represents the 62 to 79% Fib retracement levels in the {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} pattern
19.2	79
	80	* The Fib box is drawn from the low to high when the previous days high has been broken.
21.1	81	* Trade
	82	** lot size that allows taking the partials (0.04, take a bit off each time?
	83	** SL will be set below the 100 level.
	84	** Profit taking
	85	*** take at 1st scaling at -0.5 or 15 pips or more
	86	*** take next at -1.0 or 15 pips or more (or slightly before - round down to the nearest 10 level)
21.2	87	*** take a scaling at 100 pips regardless of where you are
21.1	88	*** take next at -1.5
	89	*** take next at -2.0
	90	*** once price moves beyond the 1st scaling, move the SL up (just beyond BE)
	91	*** 2nd scaling - move SL above SL.
	92	*** other scalings - watch the trades, then set SL beyond BE, not to close so there is room for the trade to run.
	93	*** get out by the last scaling
	94	* Fib settings for Trading View:
	95	[[image:Screenshot 2020-06-29 at 05.10.27.png\|\|queryString="width=363&height=533" height="533" width="363"]]
	96	We could also at -1.5 level
19.2	97
21.2	98	* key things learned
	99	** when to move a stop
	100	** what entry price to look for
	101	** where stop loss should be
	102	** where do you take partials
	103	** what you avoid doing to your revised stops (choking them out)
8.1	104
59.1	105	====== ~[[[top>>doc:WebHome]]] ======
29.1	106
28.1	107	== {{id name="Ex02"/}}Example 2 - USDJPY ==
3.1	108
28.1	109	* Daily Chart
	110	[[image:Screenshot 2020-07-07 at 01.38.28.png]]
	111	\\fib drawn from the swing low, to the swing high
	112
	113	* previous days high (2nd last candle) broke the high from the day before that. This means we could potentially see a turn, or an expansion to the upside
	114	[[image:Screenshot 2020-07-07 at 01.40.40.png]]
	115	\\Our high is 106.65(7)
	116
	117	* Dropping into the 5m chart:
	118	[[image:Screenshot 2020-07-07 at 01.43.50.png]]
59.2	119	\\Where do you think the {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} is going to be? Look before scrolling further. Remember the magic hours of 08:30 - 11:00 NY time.
28.1	120
	121	* Fib added from the previous low at point 1, to the last recent high at point 2
	122	[[image:Screenshot 2020-07-07 at 01.47.47.png]]
35.1	123
	124	* Trading View chart, 15m
	125	[[image:Screenshot 2020-07-07 at 02.10.10.png]]
	126
59.2	127	* On the above chart is a second {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} occurring just after the {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} period opening
35.1	128	[[image:Screenshot 2020-07-07 at 02.19.10.png]]
59.2	129	\\From the swing low, to the new high breaking the previous high. The {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} opportunity crosses the weekend.
35.1	130
	131	* 5m chart view
36.2	132	[[image:Screenshot 2020-07-07 at 02.22.17.png\|\|queryString="width=591&height=819" height="819" width="591"]]
59.2	133	\\the recent low marked, right side showing the new high forming the {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} pattern.
10.1	134
59.1	135	====== ~[[[top>>doc:WebHome]]] ======
29.1	136
36.2	137	== {{id name="Ex03"/}}Example 3 - S&P 500 E-Mini Futures (June 2020) ==
3.1	138
44.2	139	* Daily Chart
	140	[[image:Screenshot 2020-07-07 at 02.43.11.jpg]]
	141
	142	* currently inside of an OTE
	143	[[image:Screenshot 2020-07-07 at 02.46.32.jpg\|\|height="696" width="687"]]
	144	\\The fib provides a framework - old low, old high, retracement back to the 79 level. On the daily chart, the momentum is likely to go higher. It could be reaching for the old high, it could break through, or it could fail. It doesn't matter.
	145	\\What we do care is that it is likely to run the previous day's high.
	146
	147	* Previous day's high marked
	148	[[image:Screenshot 2020-07-07 at 02.53.30.jpg\|\|height="167" width="848"]]
	149
	150	* 5m chart
	151	[[image:Screenshot 2020-07-07 at 03.24.45.jpg]]
	152
	153	* Marked up
	154	[[image:Screenshot 2020-07-07 at 03.28.25.jpg]]
	155	\\The "big figure" is 2900. Price has traded down into that during the NY session. Whenever a big figure is swept, either down into, or up into, it generally creates a tradeable bounce or retracement, even if it is very short lived.
	156
59.2	157	* Focus on the NY session time to find the {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}}
44.2	158	[[image:Screenshot 2020-07-07 at 03.31.40.jpg\|\|height="417" width="313"]]
	159
59.2	160	* {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} marked
44.2	161	[[image:Screenshot 2020-07-07 at 03.34.05.jpg\|\|height="850" width="775"]]
	162
	163	* and here is how it played out
	164	[[image:Screenshot 2020-07-07 at 03.36.45.jpg]]
	165	\\In this example, the market tends to want to gravitate towards the old high because the market is bullish, and will catch out the market short sellers.
	166
10.1	167
59.1	168	====== ~[[[top>>doc:WebHome]]] ======
29.1	169
44.3	170	== {{id name="Ex04"/}}Example 4 - GBPUSD ==
3.1	171
47.2	172	* 1H chart
	173	[[image:Screenshot 2020-07-07 at 04.22.04.jpg]]
	174
	175	* Marked up using "support and resistance" paradigm. Note that this is a retail trading mindset and it is wrong.
	176	[[image:Screenshot 2020-07-07 at 04.31.28.jpg]]
	177	\\Again. Wrong.
	178
	179	* ICT Markup - [Market Efficiency Paradigm] (link to definition later)
	180	[[image:Screenshot 2020-07-07 at 04.34.19.jpg]]
52.2	181	\\It's basically the narrative of why price goes where it does and why it reacts the way it does when it gets there and where it is reaching to next. The ICT Bearish Breaker cuts to the whole narrative immediately.
	182	\\Why? You want to look at price and look for areas where they run an old high because above that is going to be buy stops. And this is buy side liquidity. This could be in the form of buy stops for new long entries, or stops protecting existing shorts.
	183	\\The big candle to the right runs through that zone to gather the liquidity. Also, ICT calls this candle pattern a "Judus Swing" because it's a fake move because it appears to signal a bullish move.
	184	\\When we see these sharp runs that that run previous highs/lows, it's highly suspect to ICT. If we get back down below the lowest down candle (ICT Bearish Breaker), breaking that low (which it does in the 3-6am bull candles above), the narrative changes to Bearish.
	185	\\So what we do is go to that Breaker, draw the line out in time and then you'll be able to see the real turning point, or the real support/resistance level if you like. Look at the 7-9am candles on the right where it touches the 1.2371 line.
	186
59.2	187	* This provides the narrative behind finding and {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} with this structure in place. It can occur in a trendless market environment, and doesn't have to have a bullish or bearish trend on the daily chart, so go into the lower timeframes.
52.2	188
	189	* 1h chart marked up showing the previous days low as our highlighted candle is a ICT Bearish Breaker and tends to indicate that we are going for new lows and it is likely we will target the previous days low.
	190	[[image:Screenshot 2020-07-07 at 04.59.43.jpg]]
	191	\\The new ICT bearish breaker is highlighted in the pink box.
	192
	193	* 5m with the NY Session highlighted
	194	[[image:Screenshot 2020-07-07 at 05.01.46.jpg]]
	195	\\
59.2	196	* and here is the {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} Fib marked.
52.2	197	[[image:Screenshot 2020-07-07 at 05.04.42.jpg]]
	198	\\stops will be above the 1.0 point
59.2	199	\\We see the high, down to the low, and then the price returning to the {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} where we can fill our order. Our -2 level is the 1.23 big level and the institutions reaching for the old lows and the liquidity that can be found there.
52.2	200
59.2	201	* Also note, that we have not yet taken our previous days lows, so there is a second possible {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} entry. The price starts to retrace at at 11am - which is just outside of our session window, but still acceptable. So, place the fib and see if this retracement suggests a trade
52.2	202
	203	* Fib placed
	204	[[image:Screenshot 2020-07-07 at 05.17.16.jpg]]
59.2	205	\\We see the high, low, the retracement into the 62 {{glossaryReference glossaryId="Glossary" entryId="OTE"}}OTE{{/glossaryReference}} region and we'll be targeting the previous days low with a short. The stop would be above the high
52.2	206	\\Our targets:
	207	- 1.2282 - 1.2283 for our 0.5 level
	208	- 1.2265 for our 1.0 level, or we could target the 1.227 level as a more likely target rather than getting a full fib.
	209	\\We're rounding down our numbers and being content with not being too greedy so we don't make a winning trade a losing one.
	210
	211	* Results:
	212	[[image:Screenshot 2020-07-07 at 05.25.06.jpg]]
	213	\\\\0.5 taken. 1.0 taken.
	214
10.1	215
59.1	216	====== ~[[[top>>doc:WebHome]]] ======
29.1	217
12.1	218	== {{id name="Ex05"/}}Example 5 ==
3.1	219
10.1	220	* example
	221
59.1	222	====== ~[[[top>>doc:WebHome]]] ======
29.1	223
12.1	224	== {{id name="Ex06"/}}Example 6 ==
3.1	225
10.1	226	* example
	227
59.1	228	====== ~[[[top>>doc:WebHome]]] ======
29.1	229
12.1	230	== {{id name="Ex07"/}}Example 7 ==
3.1	231
10.1	232	* example
	233
59.1	234	====== ~[[[top>>doc:WebHome]]] ======
29.1	235
12.1	236	== {{id name="Ex08"/}}Example 8 ==
3.1	237
10.1	238	* example
	239
59.1	240	====== ~[[[top>>doc:WebHome]]] ======
29.1	241
12.1	242	== {{id name="Ex09"/}}Example 9 ==
3.1	243
10.1	244	* example
	245
59.1	246	====== ~[[[top>>doc:WebHome]]] ======
29.1	247
12.1	248	== {{id name="Ex10"/}}Example 10 ==
3.1	249
10.1	250	* example
	251
59.1	252	====== ~[[[top>>doc:WebHome]]] ======
29.1	253
12.1	254	== {{id name="Ex11"/}}Example 11 ==
3.1	255
10.1	256	* example
	257
59.1	258	====== ~[[[top>>doc:WebHome]]] ======
29.1	259
12.1	260	== {{id name="Ex12"/}}Example 12 ==
3.1	261
10.1	262	* example
	263
59.1	264	====== ~[[[top>>doc:WebHome]]] ======
29.1	265
12.1	266	== {{id name="Ex13"/}}Example 13 ==
3.1	267
10.1	268	* example
	269
59.1	270	====== ~[[[top>>doc:WebHome]]] ======
29.1	271
12.1	272	== {{id name="Ex14"/}}Example 14 ==
3.1	273
10.1	274	* example
	275
59.1	276	====== ~[[[top>>doc:WebHome]]] ======
29.1	277
12.1	278	== {{id name="Ex15"/}}Example 15 ==
3.1	279
10.1	280	* example
	281
59.1	282	====== ~[[[top>>doc:WebHome]]] ======
29.1	283
12.1	284	== {{id name="Ex16"/}}Example 16 ==
3.1	285
10.1	286	* example
	287
59.1	288	====== ~[[[top>>doc:WebHome]]] ======
29.1	289
12.1	290	== {{id name="Ex17"/}}Example 17 ==
3.1	291
10.1	292	* example
	293
59.1	294	====== ~[[[top>>doc:WebHome]]] ======
29.1	295
12.1	296	== {{id name="Ex18"/}}Example 18 ==
3.1	297
10.1	298	* example
	299
59.1	300	====== ~[[[top>>doc:WebHome]]] ======
29.1	301
12.1	302	== {{id name="Ex19"/}}Example 19 ==
3.1	303
10.1	304	* example
	305
59.1	306	====== ~[[[top>>doc:WebHome]]] ======
29.1	307
12.1	308	== {{id name="Ex20"/}}Example 20 ==
3.2	309
10.1	310	* example
29.1	311
59.1	312	====== ~[[[top>>doc:WebHome]]] ======

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