🧩 Episode 2 - Elements to A trade Setup Notes By Luyolo Ntlanganiso 1 WK Each week I want you to think about which direction the weekly candle is likely to go,this is before that new trading week begins. •Is the Weekly Candle likely to trade higher or lower •You Are Not Trying to Predict The Close of The Weekly Candle,But its Direction Factors That Influence The Weekly Candle Seasonal Tendencies Interest Rates(The Stock Market Does not like it when the FED raises Interest Rates) Earnings Season(Volatility is High) Price Action On the Weekly And Daily Chart 💡 Where is the price likely to get drawn to? Think of Price As Being A Paper Clip,and You have This Magnetic Impulse that Seasonality And Certain Price Levels will cause price to gravitate towards them. Episode 2 - Elements to A trade Setup 1 Price is Drawn To : 1. Swing Highs/Swing Lows 2. Imbalances Daily On the Daily,we are looking for swing highs and swing lows The Draw on Liquidity is found on this time frame This is where we find what makes the market go higher and lower You need to have an Assumption on where the Weekly Candle is likely to go,Then Zoom on to the Daily Xhart to see where we are in the grand scheme of things 💡 Majority of our time doing analysis is on this time frame Take note of the strength weekly candle’s close on a liquidity pool,then scale down to the daily chart to look at it fractaly then predict the next weekly candle’s direction If we break a weekly high and close with momentum on both the weekly and daily,then we go on the daily and highlight the highs price is likely to get pulled to,as we have the assumption price will be bullish Example -Weekly View The Previous Weekly Candle Closed with Momentum,after filling a weekly imbalance in the past two weeks,Our Weekly Bias is Bearish https://www.tradingview.com/x/TFtc60Eg https://www.tradingview.com/x/TFtc60Eg Daily View Episode 2 - Elements to A trade Setup 2 Now we have a weekly assumption,we want to look for the daily sell-side liquidity pools price that is likely to pursue as prices trade lower TradingView Chart https://www.tradingview.com/x/HipoRILd Start of the week TradingView Chart https://www.tradingview.com/x/EIap3VpK End of the Week on a daily view TradingView Chart https://www.tradingview.com/x/e8B2NrQ6 The Weekly Candle Trades lower as expected Example 2 Weekly https://www.tradingview.com/x/vXosZI97 https://www.tradingview.com/x/vXosZI97 Price Swept Weekly Sellside Liquidity And Closed With Bullish Momentum—our weekly assumption is higher prices Daily Episode 2 - Elements to A trade Setup 3 https://www.tradingview.com/x/NuVZxaKX https://www.tradingview.com/x/NuVZxaKX On the daily we have our buyside liquidity pools which we expect price to gravitate to TradingView Chart https://www.tradingview.com/x/G2zwhFWf We Trade Higher as Expected Example 3 I did the same test run on GOLD(XAUUSD), to see if we can predict direction of the weekly candle/weekly bias Weekly https://www.tradingview.com/x/tFBP8DH1 https://www.tradingview.com/x/tFBP8DH1 The Weekly Candle Closes With low Momentum after Sweeping Buy Stops Daily TradingView Chart https://www.tradingview.com/x/dZBMDYjk The Friday Candle Closes with Bearish MomentumWe expect price to target sell stops next week or atleast the daily orderblock shaded in brown.Our Weekly Bias is Bearish. Episode 2 - Elements to A trade Setup 4 TradingView Chart https://www.tradingview.com/x/XQ4DbOz3 Price Trades Into the Daily Orderblock as expexted Weekly TradingView Chart https://www.tradingview.com/x/fV3reJjJ Even though the close was Bullish,The Weekly candle traded lower as expected. Videos to Watch For Reference To Weekly Bias https://youtu.be/cdJFpDXKv5E Only from 1:12 to where he starts talking about sessions highs and lows on the Lower Time Frames Hourly Chart This is our framework for the weekly range or candle Episode 2 - Elements to A trade Setup 5 We refer to this time frame after deciding our weekly bias (Weekly Candle Direction) and draw on liquidity(Liquidity Pools to be targeted for the week) This is where look for inducement to take trades in line with the weekly bias 💡 Inducement is the engineering of liquidity by market makers by fool ing retail traders using fake outs before the initial market move of the day. Step By Step Guide of Inducement on a Bearish Day Step 1 Market fakes out Traders in order to trap them Step 2 Trapped Traders will then place their stops Above the Market Place (Short Term High) This is the building of liquidity. Step 3 IPDA then seeks the Induced Liquidity to bring the market higher. TradingView Chart https://www.tradingview.com/x/PVyQji6e Example of the “Sucka play” inducement on a typical bearish day 💡 Before a significant Bullish move always expect some measure of a run on sell stops. Before a significant Bear move always expect some measure of a run on Buy Stops. 15 Minute Time Frame We use the M15 to zoom into the hourly range Episode 2 - Elements to A trade Setup 6 Areas where the price has been cleanly delivered, such as double tops and double bottoms are good pools of liquidity.This is because traders tend to place their stop losses behind them as they believe these areas are good support or resistance areas. 🦠Remember the myth to sell at double tops with your stop behind the equal highs The IPDA loves to seek out the induced liquidity above or below these areas. Once the run on stop occurs on the M15 you want to drop down to the lower time frames and look for something specific, “The Set Up” The Lower Time Frames(M1,M2,M3,M5) TradingView Chart https://www.tradingview.com/x/elzUUQEb Bearish Example of the Sell Model Once we have Confirmed our Weekly bias,our Draw on liquidity,had our Run on liquidity on the 1H/M15 induced stops,we scale down to these time frames to get our set up. Episode 2 - Elements to A trade Setup 7 The 1,2,3 Minute time frames are the best time frames for looking for imbalances on index charts. This is because the high-frequency algorithms are not operating on anything higher than 3 Minutes. The Sequence is as follows—Run on Stops,Break of Market Structure,Entry on FVG. After the break of market structure you wait for the retracement candle that will create the imbalance or fair value gap,and then you take your entry on tbe fair vakue gap with your stop loss behind the candle above or below the imbalance. For any program or skill that you are trying to learn, there will be a period of growth, a time of trial and error where you have to fix those internal issues prohibiting you from perfoming at your level best. 📽 Example Targeting You want to set up your liquidity matrix in order to defy your trading range After doing so you want to target the 50% level This Set Up Presents its self Between 15:30(8:30 NY Time)— this is that sweet spot when the futures contracts open and 18:00 (11 pm NY Time) Episode 2 - Elements to A trade Setup 8 Remember 1. LQDTY RUN 2. Break of Market Structure 3. Entry on FVG 4. Target 50% of the Range —with Reference to a LQDTY Pool 💡 If you can learn this,practice it and have good money management . You can make tons of money for yourself. Until Next Time —Happy Trading Episode 2 - Elements to A trade Setup 9
