ICT Market Maker Primer Course - 10 - Accumulation - Manipulation - Distribution.srt
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ICT: Okay folks, welcome back. Okay, this teaching is going
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to be specifically dealing with accumulation, manipulation
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and distribution.
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Okay the ICT concepts used in this module the ICT power of
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three important importance of developing anticipatory price
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skills, engineering liquidity in the market, neutralizing
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liquidity in the market, market making and pairing of
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orders. What accumulation looks like in bull and bear
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conditions Where does manipulation occur in bull and bear
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conditions? What distribution looks like in bull and bear
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conditions? Alright, so we're looking at a crude depiction
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of a open high low close bar. And for the purposes of this
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teaching, every individual bar or candle is going to be
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referred to as a daily range or daily bar. Okay? Now
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everything I'm going to suggest to you here is applicable to
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every time measurement, okay, and almost every time
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interval, if it can be charted, this same phenomenon or
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concept can be applied to it. So regardless of what time
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frame you can pull up and form into a chart. As long as you
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have a beginning time, the highest value, the lowest value
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and an ending In terms of measuring time, this concept is
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applicable. Okay? But for the sake of our discussion here,
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and for something that you can practice and look for two
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times a week, the ICT power three is basically a concept of
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looking for cumulation waiting for manipulation, and then
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looking for a period of distribution. Now I look at
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candlesticks because it helps to be able to see after many
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years of looking at price action, it's very hard on your
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eyes. As long as I've been doing staring at spending lots of
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time in charts, both on a screen and on paper, I can see
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that my eyesight has diminished over the years. One of the
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benefits of knowing what you're looking for is spending far
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less time in the charts than most traders that like me and
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before me, we spent a lot of time researching and looking at
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things So, I gravitate towards candlesticks because it's
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easier on the eye not that there's any magic behind it. But
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that same concept that's seen here with a bullish open high
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low close bar to the left is comparable to what you would
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see any bullish closed candlestick. Much easier to see by
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staring at the Bat versus that little tick to the left or
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the little tick to the right, that distinguishes the open
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close on individual candles or bar. Okay, so back to our
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discussion. Using the open high low close bar, it's gonna be
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a lot easier for me to describe the phenomenon that makes up
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my ICT power three. And the origination behind this idea was
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inspired by my mentor Larry Williams. He made a point in one
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of his lectures that he ended up repeating several times for
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a number of years. But he made a point of making a remark
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about he wished he knew How the traders or who the traders
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were, that could be buying below the open or selling above
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the close on bullish or up close days. And I took that as a
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personal challenge. And I spent the first quarter of my 25
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years mastering just that concept, because I felt that it
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was enough for me to work towards it. Cracking that code, if
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you will, and I think I've done it. I thought it to other
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people. So I know that it's something that is real, it's
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tangible. It can be repeated not only in my own results, but
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other people that have learned from me. But it all hinges on
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the reference point that starts our time interval. And
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again, we're referring to every bar or open high low close
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bar depiction in my diagrams as a representative Have one
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daily bar. Okay, so a full 24 hour period. It does not
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matter that if it's forex, or commodities or bonds or
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whatever it is, if it's a market, it can be measured in time
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intervals, the highest value, the lowest value, a time at
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which it starts trading in time it ends trading, you only
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need is for reference points. So the open high, low and
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close is all we're concerning yourself with here.
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Now, the first of the four is the opening price. Now for
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definition terms, this is the initial value price prior to
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any imbalance, and I'll talk more about that as we go. The
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closing price is the ending value price post price
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imbalance. Okay, the portion that makes up the range between
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the open and close is referred to as range expansion. And
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this is a dynamic price imbalance. Now this can be a bullish
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or bearish imbalance relative to the open. But for example
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sake our first one's going to be referring to a bullish up
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close. So this would be a bullish range expansion or a
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dynamic price imbalance of a lot more movement to the
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upside, seeking a higher price above the initial value price
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of the opening price. In layman's terms, we're looking for a
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bullish close. Okay. Now as far as it goes in terms of
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accumulation, manipulation and distribution or power three,
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the first thing we have to determine is what is
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accumulating. Now if we're bullish on the marketplace, we
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would be looking for accumulation in the form of long
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positions building up. It's going to be around that opening
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price. And I'll talk more about the opening price in in
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future tutorials. But the opening price just above it, or
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below it when we're bullish. That's where Long's are
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accumulated. Now who's accumulate, there's long positions
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smart money. When we're bullish, and we're anticipating a
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bullish range expansion to the upside, okay or higher close,
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we would be hunting a manipulation cycle immediately after
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the opening price. So on a daily range, that opening price
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if we're bullish, we want to be buying at that opening
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price, or below it, ideally, why would we want to be buying
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below the opening price when we're bullish? Because the
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market makers are going to be looking to engineer short
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liquidity. What does that mean? If a market breaks quickly,
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below an old low, there are traders that look to be a
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breakout entry. So they'll look to sell short on a stop this
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engineering forces liquidity in the marketplace To sell at a
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very, very low price that run below an old low or a quick
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sudden movement will entice traders that are on the
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sidelines just watching price and you know what that feels
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like if you watch lower timeframe charts, any sudden move
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lower, your heart starts to have palpitations, you get
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excited, you think it's gonna keep going lower. What
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happens? You take the bait, you go in there and you sell
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short and the market stops on a dime reverses and goes
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north. immediately below the opening price on a daily range
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when it's bullish. This in initial drop down is very
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significant because it's going to engineer willing parties
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to sell short. That selling short will flood the market with
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the counterparties to Smart Money wanting to buy it at a
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deep deep discount the other form of manipulation It takes
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place when it's bullish is neutralizing long liquidity. That
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means there's individuals that's probably already long or
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just recently bought near the opening price in the drop down
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below the opening price will upset their long position. In
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other words, it'll just run their stop, not to engineer them
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into a new lower entry, but to knock them out of an
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initially well placed position. So we're seeing two
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conditions are happening at the same time. The opening price
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and below it when we're bullish, is knocking individuals
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out. That's right that would otherwise be profitable with
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the market rallies. And it's also inducing or engineering of
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short term sentiment shift to bearishness by running short
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term lows. Not only we take out long holders with their sell
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stocks, but traders that want to sell short on a stop. They
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would be in they would be placed in the market on the wrong
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side and over selling short and otherwise bullish market so
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finally as we interpret this, the manipulation is we're
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looking how the market makers pair orders by pairing the
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sell stops with smart money buying interest, we can see the
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manipulation cycle as it really is
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a run below the opening to accumulate long positions before
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the big up move. And finally, the distribution cycle where
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Smart Money pairs its long exits selling out other Long's
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with pending buy interest now that pending buy interest is
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going to be in the form of buying above an old high that
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would be a breakout artists idea. They're gonna want to
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break out above a previous high and they would view that as
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strength buying strength. Well smart money will Look to sell
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their long position to those breakout artists that want to
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buy above an old high or those individuals that would
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probably try to sell short intraday they would have a buy
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stop above intraday high, smart money would look to run
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through that intraday high and sell it to those by stops so
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they're long and exits would be paired with a short term
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intraday swing high. If we seen a nice little retracement
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lower intraday before the close, that's where an area of
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distribution would come in. So we're looking at a reverse
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idea here, the open high low close with a down close and
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again this represent rotation is a crude depiction of a
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daily open high low close bar. And we could see that same
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thing in the form of a bearish closed candle much easier on
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the eye but we're gonna take our focus back to the open high
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low close bar. And again, the opening price, much like we
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just said, but just for completeness sake is the initial
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Value price prior to any imbalance. The closing price is the
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ending value price of that time interval that you're
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measuring words what time frame you're looking at. And if
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it's daily, it's the ending value for the daily range post
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or after the price and balance in order to the movement took
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place between the open and where it's now closing. And we
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have the range expansion cycle that is basically dynamic
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price imbalance. So between the opening price and the
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closing price when we're bearish This is what we would be
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expecting or anticipating in price came a lower close. Now
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in the form of power three, what is accumulating well from
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the opening when we're bearish. short positions are building
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up and who's building up short positions, smart money at the
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opening price or just above the fold, Price when we're
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bearish, we would be anticipating manipulation. And what
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form of manipulation will we expect to see? engineering long
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liquidity, no words. We're looking for a quick sudden
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movement higher to entice breakout artists that want to buy
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want to break out and they would be placed in on the wrong
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side of the marketplace. Another form of manipulation this
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would be neutralizing short liquidity. In other words, those
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individuals that would already be short in the marketplace
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that would otherwise profit from the future coming decline.
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They are knocked out by having their by stops tripped. So
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they're neutralizing their short position. And their short
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position being neutralized is a buy stop so that buys out
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the hits the market as a market order. Smart Money will sell
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to they're willing to buy stop somewhere it's at the market
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trade up to your buy stop. That buy stop becomes a market
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order to buy Buy at the market smart money will be
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Counterparty to that they will sell to those buy stops. But
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their sell position is to ride it lower and make money.
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manipulation in its truest sense is in this form when we're
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bearish at the opening price or above it by stops are being
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paired with short interest on the form of smart money. And
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finally, at the end of the day, the distribution cycle was
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seen where Smart Money pairs it's short exits are covering
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with pending sell interest. In other words, smart money's
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going to be short, and to gather short positions, they have
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to buy it back and they will be targeting some old low. What
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would be resting below an old low sell stops. Those sell
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stops once they're triggered. They become market orders to
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sell to marketplace which floods the market with sellers and
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the best time to cover Short is when there's a flood of
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sellers in the marketplace willing to sell at a low price.
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And this would be the distribution cycle of the daily range.
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Okay, so what does accumulation look like in a bull
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condition or when it's bullish? It's not important that we
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zoom in here and see the details, I just wanted you to see
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the overall characteristics in the green shaded area, you
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can see that there's a consolidation around the opening
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price. And that consolidation leads way to a decline, which
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gives us the framework for what does manipulation look like
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in a bull condition? Well, this is what manipulation looks
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like, right before the market starts to trade higher after
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consolidation when the accumulation of Long's are being
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made. The problem is, you see that decline below that green
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shaded area as weakness, and who would be wanting to buy
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ahead of that smart money traders. Okay. They have very deep
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pockets in the market. has a tendency of creating this fake
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move, okay? Where in Tyson's or induces the opposite mindset
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or sentiment, this drop down of that consolidation when
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we're overall bullish is manipulation, it's knocking out
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short term lows. So anyone that's long, they're knocked out,
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they can profit from the up move. And it's also putting
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traders in on a breakout short and they're gonna be on the
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wrong side of the marketplace. And finally, at the highs of
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the day, we have our distribution, where the Smart Money
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exits their long positions by selling above an old high,
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whereby stocks will be resting. So this buy stocks will be
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hit. floods the market with buy stops buyers at a higher
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price, smart money to sell their long positions to higher
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buying interest traders in the form of their buy stops being
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tagged. Okay, and what does accumulation look like in a bear
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condition, we have a consolidation and price moves higher,
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which would be the manipulation. Now if you look at the left
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side of the chart, you see a double top. That's exactly
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where what bizstats would resign, okay, lesser informed
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traders would have their buy stocks resting above that is
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viewed as a stiff resistance price point. And those levels
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are to clean, the market will in fact want to go through
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their pro bit for buy stops. Those buy stocks are gonna be
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triggered. Anyone that short is now allowed to be profitable
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and to move going lower. So they're neutralizing their
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shorts by hitting their bus stops. Also breakout artists
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that see that equal high to the left of the chart and the
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consolidation that move out of that day would be buying that
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on a breakout or trying to buy strength in their eyes. Both
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are incorrect. And what we're actually seeing is a market
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drive hire the pair of traders to buy higher or at a high
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price and short sellers on the Smart Money camp, they're
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going to be selling short to those individually that want to
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buy at a high price to make a profit as the market moves,
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eventually lower. Towards the end of the day, we see the
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distribution cycle come in, where shareholders and the Smart
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Money camp, we're going to be looking to collapse their
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short positions. To get a short position, you have to buy it
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back, you have to look for an area to run below old lows.
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You look at the original consolidation 20 pips below that
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that's where we see the low that they form. It's exactly
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where smart money would be collapsing their short positions
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where they trade. And we see the ending cycle their
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distribution, smart money collapse in their short in the
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form of buying it back at an area where sellers below the
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market would be interested in selling. Overall if you
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understand this concept and there's lots more information
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that's coming in By way of my tutorials, you can look at the
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marketplace like this and see the original consolidation
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here in the green market reaches down below the
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consolidation into an area of liquidity, which is 10 pips
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below equal lows. Their sell stops are triggered where smart
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money will be buying. Once they sell stops or tripped,
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they're buying the low of the day the market rallies up, we
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have an expansion move or range expansion up into a move of
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running 20 pips above the old high in your distribution
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cycle goes into the marketplace, and has a complete daily
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range using the power three concepts that I've outlined
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here. So hopefully, you found this teaching insightful.
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There'll be more built on this with the future tutorials.
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And until next time, I wish you good luck and good trading.
