All language subtitles for Lesson 8 - Market Maker Trap- Double Top _ Bottom Phantoms

Teaching number eight of eight in
December, 2016, ICT mentorships

content we're dealing with
specifically double tops and bottoms.

Okay.

Before we get into it, um, I
want to talk about measured moves

and clean highs and clean line.

And we look at this price action in here.

We have a drop down in price with
relatively equal highs in here.

Okay.

In the marketplace, there is a
pretty reoccurring phenomenon.

It takes.

About measured moves

and

you can see

this price swing here projected up.

It gives us pretty close
to that level up there.

And when I was going through.

Coming up as a trader, I took a
lot of the things I learned from

institutional trading and retail
trading and blended the two together.

And I knew that there'd be runs
on stops above the highs and

runs on stops below the lows.

And I noticed that there was measured
move ideas throughout all of prices.

And I also noticed that by blending some
of the things like price delivery and

double tops, like we see here, these
two highs here in close proximity to

one, another price has already shown
a willingness to want to go lower.

And inside this consolidation,
let's take a look at the liquidity

pools and ranges above and below.

Well, above here we have.

This range here.

Okay.

And what I'm noting here is this
candles opening 77 42, and this candles.

Coming in at 77, even big figure.

So there's our range in here.

Now what I've delineated on the chart is
the open at which price was enough candle,

beginning and another up candle here.

And then everything below this candle
here is all sell side delivery.

So there is a gap or liquidity void.

In this range here, down here,
we have a fair value gap.

Great.

In here, these candles
here, this candle here.

And we have the body of the candle
of this down candle, which is the

bullshitter block, which is right before
this big move up to last down candle.

We're going to focus primarily
on the open on that candle.

okay.

So we have mapped out both
sides of the market's liquid.

And we can now build ideas about what we
would reasonably expect to see price deal.

Now, the retail universe is
going to see this as tabletop.

So therefore there's resistance.

Let's get short and put a protective
buy, stop above these highs.

And they're gonna be looking for
the market to trade down into this

low, because support resistance
says this is where support.

So therefore probably should reach
all the way down to that level.

Institutionally, what we would
be thinking is price definitely

has by stops above here.

So traders that are already short
back here, we want them to drop

their protected by stops down here.

So we're going to wait for price
to drop lower closing this fair

value gap and potentially hit
this order block level then.

A price dropped down to that level.

We could reasonably expect price to
go back up and clear out these buys

stops or the market could come up
straight into this void, close it

in, and then trade lower to close
this fair value gap or hit this.

Pull a shorter block to close the trade.

Here are the two scenarios.

As it is, the market starts to break down.

So we know they're going to be looking
for this side of the liquidity first.

So that means they're going to
drop in to this area here and this

fair value gap or shorter block.

And then we'll expect to see the equal
highs or double top to be blown out

and to reach up into this area here.

But at this point here, we
also noticed that we have.

In here.

And we also have the liquidity void
up here in a fair value you got below.

So we're looking for the
market to trade down,

hits the ball.

Shorter block

shows, willingness to want to rally

double top is now gone.

There's buy stops are gone.

We're looking for the
void closing up here.

So now we're going to take our level put
rate on that candles opening right there.

Comprise trades up, hits it to the PIP.

High comes in at 77 42.

To open on this candle comes in at 77
42 double double-talk by stop liquidity.

Run up into a liquidity void
to a bare shorter block, which

is the last two of candles.

He goes right to the liquidity
void being closed in by stops,

ran out above a double top.

Then the market makes you run
the liquidity below that low, and

then you go, let's take another
example on double tops and bottoms.

And here we have a double top.

Price has traded down into a bullet
shorter block, which is the last

down candle rate for the up move.

This would be a nice
buying opportunity here.

So what would you be reaching for?

What liquidity?

Well, retail is going to
see this as resistance.

So in the mind of the retail universe,
they see this as resistance here is

price hit this here and it traded lower.

Bye stops are above that.

Now short traders have they're
protected by stop above this

equal high or double top.

And you know, there's going to be bikes
that's about this high, but nonetheless,

we're focusing on double tops and bottoms
for this teaching bull shorter block

here who could be a buyer here, price
are we reaching for and through this?

Now the question is, is
how much beyond that?

We have our double top, again,

your measure to high, down to
the low between the two peaks.

Okay.

So we have the high down to the low.

We can project that

up here and now, while we tell
things, this is where it's gonna to.

The algorithm is going to reach
this far up because it's going

to remember the range back here.

So we're looking for 74 45

market rallies trades through here,

right in here.

There's probably some kind of
a mental divergence and just.

Completeness sake.

And this month teaching let's
put a momentum indicator up

in here, some diversions right there at
a level of old resistance at a double

top retail is going to think this is a
cell, and they're going to look for price

to come back down to this support level.

That's what retail is thinking.

We're thinking it's going up to 74 45.

We used the double top is here by stops.

You're above that.

And we're going to take the measurement
that the algorithm is going to use and

project that above to get its objective.

The high comes in at 74 46 off by one PIP.

And there you go.

You have a market move, right
to a specific price level,

running to double top out.

And then the remove cause the
subsequent down, move, running

out to liquidity below these lows.

And now we're going to look at the double
bottom traders are going to see this as

support price, rallying way sell stops.

We'll build up the low here.

You used to high down into the
low there's a range, and we're

going to project that down

right there.

And what that'll do is that'll give
us our algorithm, objective or price.

We'll look to expand and
seek downside liquidity.

And there you go.

And subsequent price reaction.

Yes.

Right back up to the
double top reference point.

So it's exactly on both
price points here and here.

The tip off is when you're looking
for double bottoms and double

tops, the algorithm is going
to know those reference points.

Even if time has passed, it
knows how to find these reference

points by consolidation.

Then it takes those
projections and moves it above.

And below and expands
down and above that far.

And that's why you get these
bike reversals on both sides of

the marketplace and why you get
the reactions as a consequence.

So when you're looking at double tops
and bottoms, while they may take time

to events and get through and trade
through, We never trust double bottoms

and double top, because we understand
that the market makers and the interbank

algorithm will go through these old
highs and old lows seeking liquidity

below them in the form of cell stops
above them in the form of buy stops.

Extreme ends of the range is where
high probability trading is in the

middle of the range where there's low.

When we use double tops and double
bottoms, we're framing the extremes

of the current trading range.

Every time you look at your charts going
forward, you want to be highlighting

these double tops and bottom areas
because they're going to give you

specific laser guided precision levels
at which price will drive through above

for the buy stops and below for the cell
stops, you can see on an hourly chart.

Gives us a lot more framework
instead of using like a 15 minute

timeframe for intraday trading,
where usually it's a 10 and 20.

Run on stock.

Usually we expect a 20 PIP, 10 to 20 foot
range run above and on high or 10 to 20

PIP run below an old low for stock runs.

When we're using higher timeframe
charts, like the hourly chart,

you can't use a 10, 20 PIP grade.

You have to use other ideas and
the algorithm or reach for these

reference points based on the
double task and the double bottoms.

And you can see that
it ranges in this case.

It's a 48.

So it's moving that far based on
the movement inside of the double

bottom or inside the consolidation.

And then here, it's moving based on
this mood here, inside the consolidation

before the level top is right now,
notice the double top formed here.

And we had a reference point of
this level based on these double top

highs in the rains projection inside
of it, price traded all this time.

Until eventually they were
here, it worked it out.

So that's why I taught in September
what you should be focusing on.

Look for levels that are clean like this.

You may not have a trade today with
that information, but it will give

you insights at a later time when
we start to run through it, or once

we have run through that level, then
we can understand where it's going

to reach for and contrarian view.

If they've taken the buy stops
already, what's out of the

marketplace, they going to reach.

The cell stops.

You can see that happening
here, go through your charts.

And I'm sure you'll be amazed at how
many times you see this phenomenon

take place and it's on all timeframes.

So don't think just in a 15 minute,
five minute basis or hourly, look

across all the timeframes and you'll
see it's there until next time.

I wish you good luck and good trading.