There are three higher time frame levels that you should
be focusing on.
Liquidity Pools
When it comes to liquidity pools, a lot of traders make the mistake of falling victim to Liquidity Purges. They
misinterpret Liquidity Purges as Break Of Structure
•
So what a liquidity purge is you have a high, a purge above that high and then the market trades lower. So this
would be considered the purge. The purge is just the raid on liquidity, sweeping liquidity like we have here.
•
This move right here would be purging the liquidity. The problem though is a lot of traders misinterpret liquidity
purges as a break of market structure. So what that is is there's a high, low, high, high.
![[Pasted image 20230723150619.png]]
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The problem a lot of novice traders make is they see that high, high as a break in market structure. So MSB,
BLOS, whatever they call it, a break of market structure.
•
So what they then do is they start having limit orders here in a discounted market compared to this low to this
high.
•
This would be considered discount. They have their buys set there and they're expecting price to do something
like this; trade into the discount and then create another high, high.
![[Pasted image 20230723152209.png]]
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But what instead happens is something like this. Price completely disrespects their level and just comes with this
low. Which makes this move right here the purge and they fall victim to it.
•
They fall victim to this very impulsive move here because they thought it was a high, high, high and MSB.
•
But in reality it's just a purge and the market will reverse in the other direction.
![[Pasted image 20230723153428.png]]
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So something a little like this. You have a high here and a high, high. Price closes cleanly above these highs with
a clean candle close, and people would consider that as a market structure break.
•
So they start looking for buys and an order block. But that order block doesn't hold and just completely reverses
in their faces. So let's talk about the victims of the liquidity purge.
When you Fall victim to Liquidity Purges, it can occur in 2 ways: Breakout Or Retracement.
![[Pasted image 20230320054557.png]]
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We need to understand the victims of the liquidity purge because once we can put ourselves in their position and
understand that If they bought that breakout or if they try to buy the dip, their stop would be right here. You want
to be thinking like a market maker.
•
You want to be thinking where are the victim's stop losses and how can I target it.
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And this is the first step. It's understanding liquidity purges.
Victim 1: Buying the Breakout
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Understand that when the price is trading above a recent high, that is the most extreme premium price.
•
Finding a Position on the breakout (intra-day).
•
If you are buying on the breakout or finding a position during a breakout on the Lower Time Frames understand
that you are buying premium prices.
•
As interbank Traders, our initial goal is to buy low, sell high, buy cheap and sell expensive
![[Pasted image 20230723165426.png]]
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So victim one is your typical retail trader that uses retail patterns like bull flags or head and shoulder breaks or
whatever.
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What they do is they just buy the breakout, and when you're buying the breakout you're buying the most
expensive prices.
![[Pasted image 20230723155519.png]]
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(05:04): If we have a trading range, something like this, this would be your range high and this would be your
range low and this would be equilibrium; In this range above equilibrium is the premium prices. and below
equilibrium is discounted prices.
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But once price starts reaching above into premium, doesn't stop and it goes for the high here. that's what we
consider to be very extreme prices, because that's where retail traders start buying, buying, buying, buying at a
premium price because they're chasing it now.
•
So be aware of when this is happening, especially if the higher time frame says we have to go down.
![[Pasted image 20230723155311.png]]
In a bearish trend you should see price trading above old highs as a potential resistance level.
•
So if the order block here doesn't hold, if the gap here doesn't hold, then you see the liquidity pool above it to be
the most extreme level in terms of resistance.
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So just like how a fair value gap can be a resistance level and A order block can be a resistance level, the most
extreme prices here can also be a resistance level. So we should also view it as one. ![[Pasted image
20230723155748.png]]
•
It's considered the most extreme resistance level when we trade above it..
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For people that are more informed and trade order blocks and trade fair value gaps; sometimes, if you don't check
the higher time frame and prices in a premium here and you're looking for fair value gaps or order blocks to buy
within this area....... they're not going to hold... this is because this is the most extreme premium.
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As soon as we break a high, it's the most extreme premium, and bullish levels don't blend well with premium
conditions.
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They'll be buying here and then sometimes they buy here. ![[Pasted image 20230728200542.png]]
This might be you. They buy here and then prices reverses on them. And then they don't want to accept they're wrong so
they start moving their stop losses down and down and down and down to this low here... and then they think, oh it's
never going to reach that point. So I'm just going to move it there....
![[Pasted image 20230728200821.png]]
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In reality they've fallen victim to the purge.
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If they're not willing to take a stop out after prices reverses on them like this and they drag their stop loss to
another low, they're going to get punished for that as well. So if that's you, now you're aware to say, okay if I get
stopped out, then just take the stop out. Move on.
![[Pasted image 20230728201007.png]]
Victim 2: the person that buys the retracement.
1. Finding a position on the retracement for a higher low.
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Although buying retracements is what you want to do, it must align with the Parent Order Flow.
•
If you're trading against the Parent Order Flow, whatever level you use to buy on the retracement is not going to
hold.
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(09:01): So they understand okay I shouldn't chase price when it creates that higher high. I should wait for it to
pull back within the range into discount market and then buy for higher low.
![[Pasted image 20230728213729.png]]
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But we understand that if this high becomes the parent order flow, (09:32): because this is a higher timeframe
resistance level, opposing levels such as this order block or this fair value gap here or this low are going to be
seeked. ... Remember the previous video I just made where we had a daily equity level hits it and then trades in
the other direction? It's because this level acts as the parent order flow and then anything against the parent
order flow starts breaking. (10:08): So this order block breaks, this order block breaks, this fair value gap
breaks and then these lows here is your draw on liquidity; when people fall victim to liquidity purges, their stops
become the draw on liquidity. ![[Pasted image 20230728213229.png]]
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Although buying retracement is what you want to do, it must align with parent order flow.
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So instead of buying this retracement here at this order block for a higher low,(10:35): expecting a higher high,
what you should have done is sold this retracement for a lower low.
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You see, this one plays out because it's trading with the parent order flow, which is a run highs, that's a purge of
liquidity and then that's your short setup there.
Inducement Liquidity: The 2 Victim's Stops. | When people fall victim to liquidity purges, their stops become the
draw on liquidity
•
(11:01): So now that we understand the two victims, their stops would be the draw on liquidity. So this move
right here is a purge. We have an old low here, people will be selling at a discount (FOMOing). selling, selling,
selling, selling; but to the interbank trader we say that's extremely cheap because prices traded below an old low
(11:33): Now that would act as parent order flow.
![[Pasted image 20230320061033.png]]
Where are the people that sold this move going to place a stop loss?
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We start looking to the left, here or even here. ![[Pasted image 20230805024615.png]]
Or it could be someone who's more aware; they understand that I should sell a retracement instead of chasing on
the breakout here.
•
(12:01): So what they do is they look for, range high, range low, and this is pre-market, so they sell, oh that's an
order block right there, so they sell there. But like I said, if you're trading against the parent order flow, your
level is just going to break.
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The person that sells there from the Order Block and a Fair Value Gap, that's a very high probability pattern, but
if it's against the parent order flow it's supposed to break. ![[Pasted image 20230805024930.png]]
•
(12:31): The person that sells that order block however, where are they going to place their stop? They're going
to place it here. So that's why we view this entire leg as the inducement liquidity. So the purge happens here, this
induces shorts in the market. How does it induce shorts in the market? People selling on a breakout, one. People
selling on a lower high, two. Where is their stop loss going to collectively pool?(13:03): Right here. So that entire
move just generated a ton of liquidity above this high, hence the name inducement. Hopefully that makes sense.
![[Pasted image 20230805025511.png]]
•
(13:32): Same thing here. This is the liquidity purge. How does this move induce liquidity? People buying at a
breakout, here. One. Or people buying at a dip,two. So one and two, where are they going to place their stop?
Where's the most logical area? Their stop is going to pull here. Especially the people that thought this is a double
bottom as well. So always look to the left and you can see sometimes it's forming even more liquidity.
![[Pasted image 20230805025957.png]]
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And sometimes liquidity purges can happen on a very big scale.
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Here it breaks clean highs, (14:01): so where are they going to place their stops?.....inside the range... or even
here.
•
If you checked out Bloomberg, the very worldwide news channel at the time, Everyone and their mom was
saying that's the low for the S&P market, and they might have bought the S&P 500 right there, (14:31): to hold
for 5-10 years because they see it as an investment, so they feel like their stop loss is safe and that It's never
going to see that area again.
•
And they actually might buy some more at the breakout there, because that's how a retail trader trades.
•
Understand that although this might look like a big airtime. Some people are really playing for the bigger picture.
They're playing for 5-10 years ahead of the game. And not just day trading. ![[Pasted image
20230805030206.png]]
What Liquidity Pools Should You Focus On?: Extreme Prices (PMH/L | PWH/L | PDH/L | PSH/L)
(17:01): When it comes to the higher time frames. Please just focus on the month's highs, month's lows,
week's highs and week's lows. We're going to talk about previous days highs and lows on an
intraday basis
•
Previous Month's Highs and lows
•
Previous Week's Highs and lows
•
Previous Day's Highs and lows (Intra-week, Later discussed)
•
Previous Session's Highs and lows (intra-day, later discussed)
![[Pasted image 20230320061126.png]]
Previous month highs and previous month lows
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(16:03): You can see here that the Low of September offered a really big reaction afterwards; this is because
these Previous month highs and previous month lows liquidity pools are higher time frame liquidity pools.
•
High of November here. High of February.
(16:34): Previous week's highs and previous week's lows.
•
They (PWH & PWL) can also can be used a very similar way to PMH & PML.
•
They (PWH & PWL) are supportive resistance levels.
![[Pasted image 20230320061355.png]]
What Liquidity Pools should Focus On?: Internal Range Liquidity Pools (PWH/L | PDH/L)
•
You can also use liquidity pools when focusing on internal range liquidity.
When there are existing Liquidity Pools within an existing Dealing Range #dealingrange , this is when you focus
on:
•
Previous Week's Highs and lows
•
Previous Day's Highs and lows
![[Pasted image 20230320061420.png]]
•
(15:02): So what liquidity pools to focus on? We're talking about extreme prices here.
•
And extreme prices are when price breaks out of a trading range.
•
And the first liquidity pulls that we want to focus on are Previous month highs and previous month lows.
(15:32): And a little tip for you guys. When it comes to liquidity pools on the daily chart, you want to make sure
that the liquidity pools that you're using have space and time between them.
•
So what do I mean? If you look at this purge right here. You want to make sure that this area right here, we have
space and time.
•
This tells us that there's been time for liquidity to accumulate above this high. ![[Pasted image
20230805114655.png]]
So internal range liquidity is when price has a trading range like this, (17:31): and we're seeking a discount market for
instance. This is when price seeks internal range liquidity, rather than external range liquidity.
![[Pasted image 20230805143203.png]]
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So what I mean by this is we have a trading range here. We can use liquidity pools inside the trading range. So if
this is low and high. (18:02): If we have a swing low inside that trading range. That would act as a liquidity pool.
So price would seek that to trade higher.
![[Pasted image 20230805143824.png]]
Now what you want to do with internal range liquidity pools Is blend them with something.
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So what I like to blend them with Is 1.) an order block or 2.) a fair value gap.
•
So we can see here if we did that very thing. We have a previous week's low, and we look to the left to see where
could price trade into also; (18:32): we have a down candle here (Order Block), we'll use the mean
threshold(50%) of that candle. SO that's an Order Block + internal range liquidity In the form of previous
week's low.
![[Pasted image 20230805144646.png]]
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Same thing here. We have this entire leg here; this entire move down. Inside of that range we have clean highs,
so that clean high can act as a liquidity pool (19:03): Inside a premium market.
•
So this entire area from this high to this low is premium.
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We can use liquidity pulls inside of that range. As a resistance level.
![[Pasted image 20230805145152.png]]
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Same thing here. We have this high to this low, (19:33): and inside the premium, we have a swing high there.
You can blend an old high with the fair value gap.
•
You can see how price takes our liquidity pool and taps Into the fair value gap.
You can use Liquidity pools as a Probability Enhancer, i.e OB or FVG + Liquidity Pool.
![[Pasted image 20230805155945.png]]
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Same thing here. We have a (20:02): trading range; price can take out a short term high, Into a premium market
and then have a sell off.
![[Pasted image 20230805160743.png]]
When it comes to internal range liquidity, focus on previous weeks highs, previous weeks lows and previous days highs, previous days lows.
•
(20:31): These ones don't really have as much space and time.
•
When it comes to previous weeks highs and lows. Or previous days highs and lows. you can see the space and
time is not as significant. It's a very short term hunt. ![[Pasted image 20230805161119.png]]
Liquidity Pool Confirmation: There are 2 ways we can confirm a move as a liquidity purge
(21:02): When a liquidity purge happens. How do we confirm that it is actually a liquidity purge? And there's two
ways to confirm.
•
One will be an aggressive approach. And the other will be a conservative approach.
•
It depends on what style of trading you like. What type of trader are you? Are you an aggressive trader? Or are
you a conservative trader? An aggressive trader might have more trades, yes but, the win rate of those trades
might be significantly less when compared to someone who's more risk-adverse and conservative.
![[Pasted image 20230320061435.png]]
1. Aggressive Approach: After the Purge, take the immediate FVG or Order Bock. Don't wait for MSB|BMS|BOS
•
Aggressive is going from the purge, straight to an order block, or purge, straight to a Fair Value Gap without
waiting for a break in market structure in the intended direction.
![[Pasted image 20230805162900.png]]
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So an aggressive confirmation is, as soon as price takes out a low like this, you can start looking for an order
block without the break in market structure.
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(22:01): So here we have low, to order block. There was no break in market structure here. (Actually it's short
term high), but the point is Aggressive is going from the purge and straight to an order block, or purge. Straight
to a Fair Value Gap.
•
Like this one here, purge, straight to the order block.
![[Pasted image 20230805162900.png]]
•
(22:31): In this bearish example, we have a purge here and we went straight into a Fair Value Gap here, with an
order block. \
•
Here we have a purge above the highs, If we see a gap print we can take the Fair Value Gap as an entry. A
conservative person would wait for that low to break, but an aggressive trader would immediately take that FVG
after the purge If they see a purge.
![[Pasted image 20230805163159.png]]
2. Conservative approach
•
A conservative approach is where they have the purge To a market structure break. So they're waiting for highs.
Here. And then they're waiting for that structure to break. ![[Pasted image 20230805212750.png]]
Sometimes, as it pertains to a purge to market structure break. You might have to adjust the time frames. So you might have to shift down the time frame for
more definition. And again this is when you have to be flexible.
•
So here was this low right here for instance. (24:01): but we don't see a high we can consider as a market
structure break here; there's no highs here we can consider. So this is when we shift down a time frame into the
4h for more definition.
![[Pasted image 20230805213345.png]]
•
And that's what I did here, I shifted down, and then you can see since we went down a time frame we can see
more swing highs and more swing lows. So when price did take out that low, (24:31): we can see okay that's a
clean market structure break. And then you'll be waiting for an entire retracement.
![[Pasted image 20230320061754.png]]
•
Here's an example of a conservative, (26:01): they're waiting for the low to break, and then the rounded retest. ![
[Pasted image 20230805225005.png]]
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But the aggressive trader. Would say okay that's the purge of liquidity. I'm looking for an engulfing candle to
happen. Which is a bearish order block. You can see this is the last up candle here. They could sell into that and
not wait for the market structure break. (26:31) ![[Pasted image 20230805225100.png]]
![[Pasted image 20230320061815.png]]
Okay so real quick I'm going to compare the aggressive to conservative here. So conservative you're waiting for that
market structure break. And then you're waiting for that full on retracement, but the aggressive trader doesn't have to
wait for that full on retracement; (25:01): as soon as the liquidity purge happens here, they can use a order block to enter
on. Which you can see here. Think of it like as an instant retest; so there's a rounded retest, and then there's an instant
retest for a pop high.
So this one's aggressive and this one's conservative, waiting for the market structure break.
![[Pasted image 20230805224018.png]]
Order Blocks ( #OB )
The reason I discussed liquidity pools first is because liquidity pools often form market reversals. Market
reversals are highs and lows the market does not want to revisit, therefore forming a long term high or low.
![[Pasted image 20230320062014.png]]
•
(27:01): So if we take a look at this, Liquidity Pools often form a long term high or low, it takes a while for this
to get revisited. Here just look at the dates there. Okay so liquidity pools often form long term highs and long
term lows. Same thing here. Same thing here. ![[Pasted image 20230805231550.png]]
•
(27:31): Check how it goes from bullish to bearish. Okay so bullish to bearish. Bearish to bullish. It's a reversal.
Okay. Reversed from bullish to bearish. From bearish to bullish.
![[Pasted image 20230805231726.png]]
long term highs and lows
Once we know a long term high or long term low is in, we can expect institutional order flow on that long term perspective to hold. This
makes choosing order blocks very easy. (28:01)
•
So here we have the first long term low in. Now we can start saying okay this order block is going to hold. This
order block is going to hold. This order block is going to hold. And these order blocks are going to hold. Okay.
And we'll talk about these order blocks in a bit. Okay. But take a look at institutional order flow.
•
(28:33): Resistance levels start to break. Order blocks, bearish order blocks start to break. Bearish order blocks
start to break. Bearish order blocks start to break. Okay so now this gives us perspective. Once the long term low
is in. We can expect these opposing order blocks to break. And these opposing highs to be hunted.
![[Pasted image 20230805232258.png]]
![[Pasted image 20230320062035.png]]
Bullish Institutional Order Flow On the Daily Chart
•
On the daily chart. Once we have that long term low in. we start looking for bullish institutional order flow.
![[Pasted image 20230320062135.png]]
On the daily chart, every down candle will be used for New buying opportunities
•
This is what Bullish Institutional Order Flow is.
After that down candle forms, we expect #displacement. Displacement on the Daily Chart leads to multiple days of Bullish Candles.
•
So we can see. 1, 2, 3. Bullish candles here. Displacement. Bullish candles here, (30:01): Displacement here,
Displacement here.
•
So whenever we have down candles, what precedes that Is Displacement, Displacement.... And we can expect
this to happen once the long term low is in. And this is all simply Institutional order flow on the daily chart.
•
If you look to the left, Resistance levels a going to break, they're all going to break.
![[Pasted image 20230806225217.png]]
Bullish Order block Probabilities
•
The closer we get to the Draw On Liquidity, the less likely an Order Block is to hold.
•
This is because the price is not being formed in discount anymore, but rather a premium.
•
Wait for the markets to trade back into a Discount, then the Order Blocks will resume to hold.
•
So here (31:01): you can see that, If price comes and tests the order block, they're going to hold, because if we
look to the left, price is in the discount and we've just taken out the order flow. And we're extremely in the
discount here. Even if we got the range high here to the range low here this would be discount.
![[Pasted image 20230806230447.png]]
•
But the more we start trading higher and higher and higher. To potential resistance level (31:32):, price starts to
be in a premium market. And if we blend. Key levels, or an order block, In a premium market., they're not going
to be expected to hold.
![[Pasted image 20230806231402.png]]
•
If we look here, this is where the high forms; this order block here, since it's in the premium (look to the left
here.), When price comes to test it. It doesn't hold. (32:02): What about this one? When price comes to test it
does it hold? No because we're still in the premium. But once we get down to fair market value, which is
equilibrium, levels can start to hold again If it's bullish, that's why you see this fair value gap here hold.
![[Pasted image 20230806231037.png]]
•
Okay now we're back in bullish conditions, so what we can do now is once the market has traded back to a
discounted market here, (32:31): the order blocks can resume to hold again. So here we've traded into a discount
now. Then if an order block prints. A bullish order block prints. They're going to hold as usual. Okay. Now with
bullish institutional order flow. What happens afterwards is down candles produce displacement in price. ![
[Pasted image 20230806231811.png]]
Bearish Institutional Order Flow On the Daily Chart
1st Chart Example
![[Pasted image 20230320062711.png]]
On the daily chart, every Up candle will be used for New selling opportunities
•
This is what Bearish Institutional Order Flow is.
After that Up candle forms, we can expect #displacement. Displacement on the Daily Chart leads to multiple days of Bearish Candles.
•
Now why is this very key for us day traders? well this is key because (33:31): while we're not looking for
opportunities to enter on the daily chart, we are looking for opportunities, so once we have an opportunity where
multiple days are going to be bearish.
That means whenever we go intraday on an Intermediate Term Perspective, or a Short Term Perspective, all we have to do is (apply
#PowerOf3 #PO3 accordingly):
•
wait for price to trade above that high and then we're looking for our sell entry, and then we're going to wait
for the daily candle to close, and we're going to wait for that range expansion (34:01): for our profits. But
this is the easiest part once we understand what's going on in the long term perspective.
So if we understand that up candles produce displacement in price, every time displacement is happening, this is our bias; multiple days
of being a bearish seller.
•
But let's not forget Bearish Institutional Order Flow (34:32): is going to happen when a long term high is in.
So when we have a liquidity pool raid, it creates a long term high and a reversal, and then the move that comes
next. is bearish institutional order flow, so every up candle will produce selling opportunities, up candles here,
selling opportunities. ![[Pasted image 20230807072118.png]]
Bearish Order Block Probabilities
•
The closer we get to the Draw On Liquidity, the less likely an Order Block is to hold.
•
This is because the price is not being formed in Premium anymore, but rather a discount.
•
Wait for a Retracement, then the Order Blocks will resume to hold.
![[Pasted image 20230807073623.png]]
(35:03): The more we trade into discounted prices, the less likely bearish order blocks are going to hold
•
because discounted conditions don't blend well with resistance levels. Resistance levels blend well with premium
prices because discount is basically oversold and premium this is overbought, so just think of this like as an
indicator.
The closer we get to a draw on liquidity, the less likely that an order block is going to hold.
•
In this case, when it takes out a low that's extremely discounted. so we're going to have to wait for price to trade
back into a premium.
•
So price. what's the trading range here? Well here to here is one, and this is the premium.
•
So you might be wondering. okay where's the order block? well that's an order block there; this is the breaker
block . A #breaker is an order block that forms the purge.
•
So it's an order block breaker (breaker block) inside of a premium market, and since we're in a premium market,
it should act as resistance.
•
and then after. we've traded back into premium, check out Bearish Order Blocks again. Up candle here followed
by displacement to the downside. Up candle here, Displacement to the downside.
•
Okay. So that's how you use. Bearish Order Blocks on the daily chart.
![[Pasted image 20230807075302.png]]
Order Block Confirmation
There's two ways we can use an Order Block. One would be an aggressive approach. The other would be a conservative
approach. Similar to liquidity pools.
![[Pasted image 20230320062954.png]]
Order Block: Conservative Approach
•
With a conservative approach, you will wait for a Retracement.
•
Retracements occur at opposing Liquidity Pools, and if the retracement happens, it will retrace back into a
Discount/Premium. ![[Pasted image 20230320063046.png]]
So let's explain this. So here we're expecting an order block to form. Because this Is bullish institutional order flow right
here. (38:02):
•
With a long term low here, we're expecting all down candles to hold as support.
•
The conservative way of trading an order block is by waiting for price to take out an opposing liquidity pool,
because that will offer retracement (Liquidity Pools countering the Parent Order FLow will offer Retracements.
Think Rounded Retest instead of Instant Retest).
•
And then we're looking for a retracement back down, into the last down candle in a discounted price.
•
Okay. Here's another example. (38:32): Price trades back to fair market value, so order blocks will start to
resume again. So what we can do is. As soon as this order block prints, we're waiting for the retracement to
happen after an opposing liquidity pool gets taken out (Retracements occur at opposing liquidity pools), then we
can wait for price to trade back into discounted market here, then we can take action, capitalizing on the
displacement there.
![[Pasted image 20230807082544.png]]
•
This goes the same. So this is a breaker (Low, high, high. Low, low.) A Breaker's intent is to take out liquidity
pools. Okay. So let's not forget about that. ![[Pasted image 20230807082425.png]]
•
(39:32):You can see this low gets taken out.
•
Opposing liquidity pools will offer deep retracements. In this case, since we're expecting bearish institutional
order flow from this high. Where is the deep retracement going to occur into? We're going to have this high to
this low. Are we looking for this order block? No. Are we looking for this gap? Yes, we could use this gap. But
we might have to take a loss there, doesn't matter. What's the next level? Breaker. BAM.
![[Pasted image 20230807082838.png]]
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Now we can start resuming with bearish order blocks.
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But since we're focusing on the conservative approach here. We have a order block being printed here. So what
we're going to do is wait for a swing low to offer retracement; (40:31): so opposing liquidity pool here will offer
retracement into that order block. So that's the conservative approach. Waiting for a swing low to offer that
retracement into the loss up candle.
![[Pasted image 20230808013358.png]]
Order Block Aggressive Approach
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With an Aggressive Approach, you just wait for a candle Close.
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The candle closes occur every 24 hours, and they don't require a deep discount. ![[Pasted image
20230320063105.png]]
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(41:03): so an example is this. Since we know that this is bullish institutional order flow because of the long term
low here. This one will be conservative, waiting for that deep retracement but an aggressive approach doesn't
have to.
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The aggressive approach just waits for the candle close for the quick instant retest before the displacement.
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(41:31): Here again, this down candle here gets closed above. instant retest takes out a high. This one as well.
This up candle here closed below. Aggressive entry displacement into where? fair value gap. Then we know
that's going to send prices bullish again.
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Conservative here is waiting for price to offer retracement into this order block here. But this one is an aggressive
one; you're just waiting for the close. You can see the close happens, then it quickly taps into this high here for
displacement.
(42:32): Some bearish examples of an aggressive approach.
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You have the long term high here, so parent order flow is bearish here; we can look for institutional order flow to
be bearish, which is this.
![[Pasted image 20230810001603.png]]
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Now with bearish institutional order flow we're going to focus on order blocks and imbalances, so imbalanced
there, order blocks here we can see that these up candles gets closed here. That's your aggressive approach.
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There's no need to wait for retracement. ![[Pasted image 20230810001734.png]]
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As soon as the candle for instance here closes below the order block, you can see how this just quickly taps into
this low here, then has a displacement.
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Same thing here. Up candle gets closed below, up candle gets closed below here, quickly retest that level, and
displacement.
![[Pasted image 20230810001935.png]]
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Down candle close above. quickly test that order block for displacement.
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So you can see that this approach does not require an opposing liquidity pool for deep retracement like this. ![
[Pasted image 20230810002136.png]] Here's a clean one. Liquidity pool, up candle gets closed below, retest,
displacement.
![[Pasted image 20230810002339.png]]
Fair Value Gaps ( #FVG )
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(44:32): There's also a reason why i discussed fair value gaps last.
Fair Value Gaps will be used as a Probability Enhancer; they will help identify High Probability Order Blocks
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so what that means is if you see an order block and a fair value gap, that order block turns into a high probability
order block.
![[Pasted image 20230320064618.png]]
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Picture that in with parent order flow and institutional sponsorship. (45:04): if you see an order block with a fair
value gap, that is a key level.
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So here the long term high forms. This last big beefy candle here, that's your order block. Pair that with fair value
gap an that order block becomes an plus order block. So you can see the fair value gap enhances the order block
to make a high probability order block ![[Pasted image 20230810002900.png]]
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and since we're focusing on bearish institutional order flow here we're focusing on up candles to create new
selling opportunities. As you can see here, up candles forms an order block here; since this order block has a fair
value gap with it that's a high probability order block. (46:04): you can look for sellers there, selling opportunities
will occur at these levels. 1, 2, 3, 4. that's 4 days of being a bearish seller. Price takes out a recent low, offers a
retracement into this order block.. look what's inside that order block, we have a fair value gap here, that's a high
probability order block.
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(46:32): same thing here, this is the more aggressive order block. you can see up candle with a volume
imbalance. a volume imbalance is essentially a fair value gap. but you can just see it instead. so pair this order
block with that gap as a high probability order block. and you can see that we did have a nice selling day before
taking out this low (47:02): up candle with a fair value gap, high probability order block. this is the same.
But FVGs can also be used as a key level by itself
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You don't need to focus on the order blocks; you can just say i'm only going to focus on the fair value gaps and
that's it.
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You don't even need to know all about Order Blocks to be consistently profitable; (47:31): fair value gaps are
really enough.
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If you can identify Fair Value Gaps as key levels, then you can already be profitable; you don't need to
understand order blocks in depth.
![[Pasted image 20230320064714.png]]
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Price takes out a high here, and the key long term high prints, now we know that bearish institutional order flow
is going to take place, so resistance level is going to hold.
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Here is the first resistance level that price hits, in the form of a fair value gap, and since we know that up candle
form new selling days, and we'll have displacement to the downside thanks to institutional sponsorship, every
single one of these days here you'll have a bearish bias.
![[Pasted image 20230810005603.png]]
same here with bearish institutional sponsorship and a bearish key level once we hit that your bias becomes
bearish now; targeting short term draw on liquidity. ![[Pasted image 20230810010212.png]]