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Welcome traders to supply
demand. Or do you call them
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auto blocks sponsored candles.
I do not care guys. It is the
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same concept. We are going to
call them supply demand in our
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there is a fix community but I
will not judge you if you will
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write down order blocks or any
other names. Important for us
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is the concept behind this
name. Now let's get it started.
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We will start with the supply
zone. Now a supply zone is a
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thing which we would like to
determine within a downtrend so
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when price is moving to the
downside you will see price
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breaking structure to the
downside this is how it will be
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confirmed now what you will see
at the creation of a lower high
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so we got this one here this is
our lower high we got a lower
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low which will be broken by the
movement at the lower high. So
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what am I talking? Well
basically what you will always
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see after a break of structure
if you analyse who was
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responsible for that break of
structure you will see a candle
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which is moving to the upside
and afterwards we will see a
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strong candle to the downside
and this strong candle will
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break the previous low low. In
addition the market will create
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a gap. Now we'll say what gap
am I talking about? Well I talk
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so I mean the gap here. Let me
just mark the next candle so
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that it will make it more
clearly to you. Use it here red
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as well. So you see here the
next candle which is created
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here. So this is how the down
movement works. Price is moving
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to the downside. And you will
see that there is a gap between
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this wig over here. And this
wick over here. So I call this
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a gap. Another word for it is
market inefficiency. Market
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inefficiency sounds for me a
much better name. Gap is easier
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for us to understand because
price has created here at Gap.
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So these two weeks are not
meeting with each other. And
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what does that tell us? So this
is super important. This gap
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tells us that the sellers and
buyers didn't have a fair fair
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chance to come together so that
means that the price dropped
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way too strongly to the
downside that not everybody had
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the chance to jump on this
trade okay so the you need to
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understand the big institutions
okay they know exactly what
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they're doing over here and
they are trying always to get
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the maximum out of it and
whenever there is a gap like
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this or market inefficiency we
know exactly that they are
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highly interested in bringing
the price very soon to the
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upside in order to fill that
gap and in order to get a fair
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chance to get involved into
this trade okay now sounds a
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little bit complicated on the
first few but it's not because
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what we need to understand is
that this buy candle over here
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this bullish candle over here
was created from the same
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institution who brought the
price at the same time that
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strongly to the downside now
that means that this
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institution at this point over
here so when a market price is
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at this era over here
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put this price level so if when
the price is here this this
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institution is and positive
okay if you sum everything up
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institution will be positive
but they have at the same time
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a negative position which one
exactly the buying position I
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would say why does this
institution still have the
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buying position open well
actually they have this buying
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position still opened and at
the same time the bearish
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positions as well so they are
buying and selling at the same
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time the reason for that is
because they don't want to take
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losses. So they do not trade
like we are trading. The way on
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how we retail traders are
trading is the complete
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different approach. We need to
use stop losers. A big
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institutions big institutions
do not use stop loses because
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they can hold this whole
drawdown, okay? So they have
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massive draw down on that
position but for them that's
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not relevant because they're on
the same time they have big
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short positions right so they
are in profit but what they're
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about to do to do is actually
they broke structure to
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signalize the to the other
institutions hey guys this
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market is right now dropping
because I'm shorting it so I
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want to see the price dropping
to the downside they took the
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chance from the other
institutions to get involved
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into the short position why
because price dropped way too
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much to the downside this is
what the institutions can see
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when they're just looking at
the charts they see oh okay so
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00:06:06,508 --> 00:06:09,468
they would like to join this
trend as well because otherwise
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they could have bring the price
like that to the upside and
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this is not the idea of on how
the institutions are community
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communicating with each others
no they see okay that one
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institutions broke structure he
would like to bring the price
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to the downside he left this
gap for us so that we know okay
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price will come very soon to
the upside and we can get
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involved into the trade as well
the thing is right now this is
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why they do not close their
buying position because they
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know they will bring the price
to the upside so they will have
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the chance at this supply zone
so we will call them supply
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zone they will close exactly
over here so not sure where
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exactly not sure if it will be
exactly at the open price okay
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probably here or here or at the
middle or even at the top okay
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00:07:05,408 --> 00:07:08,828
so no matter what kind of level
over here they are going to
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00:07:08,828 --> 00:07:12,828
close it of course the higher
the close will be the better
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for them because probably
probably they will even bank
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profit out of this position
depending on way where they've
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been buying it because if you
look this movement on the lower
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time frame it will look
something like this okay it
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will be an uptrend okay to
signalize the retail traders
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that the market will
potentially go like this but in
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fact it it did it just
generated liquidity here below
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it which they have been
attacking with this strong sell
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to the downside okay and now we
don't know exactly if you look
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on this trend where they
exactly bought the price if
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they bought here or if they
bought here and here and here
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and then they will close it
here it's not clear because
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when a price will reverse right
now back here at some point
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they will close it and at that
point when they are going to
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close it they will be adding
additionally shorts plus our
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00:08:07,908 --> 00:08:10,788
institutions will join this
market as well and they will
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bring it up towards even lower
to the downside. So this is
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actually the theory behind the
supply and demand and this
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works right now for the demand
zone the same way like it works
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for the supply zone. So this is
the real meaning of this gap.
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So it it is called also fear
value gap. No sure about it I
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just call it here in this case
for me this is an imbalance
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okay this is an imbalance so
the balance the balance between
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prices is not given it is an
inefficiency in price and it's
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in gap at the same time so you
have right now a ton of words
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for that that will explain you
this kind of concept and the
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price will more than likely go
after a broke structure it's
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super important that we broke
structure because this is like
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I explained to you already this
is how they communicate okay
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price will definitely go lower
and our target will be then at
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least this zone over here and
probably we will go in lower
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breaking structure again and we
will repeat this game again and
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again so the idea is when a
price will come here that you
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can go here put your stop loose
a little bit above okay always
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put it a little bit above it
you can also put your entry a
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little bit below okay because
price sometimes will not
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completely touch it okay it
will depend on how the
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institutions will act because
sometimes they have so much
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pressure within the market that
they will just bring it from
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here all the way to the downset
so they have already too much
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liquidity within the market
that they are not interested in
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bringing a price that much and
then you put your target
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exactly over here that's
basically it that's one option
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okay to put it like this that's
your first option second option
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is to put it exactly at the
middle of it okay with putting
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it on the middle this is just a
mathematical thing you will
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more than likely expect the
price to tap into this zone
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over here or into this zone
over there right and this is
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our approach will be okay you
could put your price here or
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here or risk half of your risk
here and half of your risk here
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and you will get in if you sum
it up you will have a better
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risk reward okay sometimes it's
just better to just put it like
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this because if you will see
okay price more than likely
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will tap higher into that zone
then put it like this if you
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have the feeling for it okay no
price will not tap that much to
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it because price is so strong
in a downtrend I do not expect
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00:11:01,748 --> 00:11:04,568
that price will go much to the
upside then you will put it
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over here but for us it's this
is not always important because
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we will get very great risk
rewards also if we will put it
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over here I will depend on the
time frame that you will use it
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because you can refine these
zones on the lower time frame
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so let me just explain to you
over here so demands on the
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same thing I always recommend
you to put really take profit
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at the next structural point
because this is here then your
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new bearish range from a
structural point so you expect
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the price to come up higher and
the supply zone will then
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actually confirm your trade and
put it here because from that
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zone price could potentially
now break it and it will from
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your reverse completely to the
upside so you will miss out on
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many trades if you will not
close it exactly at the
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structural point what you can
also do is to put it a little
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bit below because there is
again liquidity located and the
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price could then reverse okay
that's also another important
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00:12:07,648 --> 00:12:12,428
thing Additionally right now
let's go into the theory of the
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refinement so like I explained
to you already price here more
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than likely will look like it
is downtrend so price comes
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from the downside right and
then when it comes here it will
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move something like this to the
downside and then at some point
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it will go oh sorry it has
different options on how the
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the liquidity here is liquid
generated more in the
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00:12:44,168 --> 00:12:47,968
liquidities point liquidity
section because it could be a
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range and then price will short
it down okay and then this
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candle will be created and then
from here it will move like
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this to the upside and your
refinement in this case will be
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to not use this whole candle
okay because if you will look
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on this move here, you will see
price is moving like this.
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And then moving up higher and
then this thing over here will
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be your refinement candle
instead of using this whole
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thing. So hopefully that makes
right now sense. Let me just
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00:13:22,948 --> 00:13:27,428
repeat it once again for you.
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00:13:33,768 --> 00:13:40,328
Out. We got demand zone. Price
has like explained to you
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00:13:40,328 --> 00:13:45,328
multiply options on how it can
look like more than likely it
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will be a short candle probably
it will be here again something
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00:13:50,008 --> 00:13:56,008
like a bullish structure and
then price will move lower and
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00:13:56,008 --> 00:14:00,088
this movement to the downside
this whole range will be this
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00:14:00,088 --> 00:14:04,128
zone here and it will look like
this okay this movement can
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00:14:04,128 --> 00:14:06,848
look like this
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00:14:08,748 --> 00:14:13,848
can look like this and then the
strong push up will will work
189
00:14:13,848 --> 00:14:17,968
out and we would have been
mapping then on the on the one
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00:14:17,968 --> 00:14:20,568
hour time frame for example or
on the four hour time frame we
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00:14:20,568 --> 00:14:26,368
will map out this whole thing
to be to be the demand zone but
192
00:14:26,368 --> 00:14:30,368
we can refine it to the last
movement to the downside okay
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00:14:30,368 --> 00:14:35,488
so you should always understand
that the theory about a supply
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00:14:35,488 --> 00:14:41,008
and a demand is so on a demand
zone last down movement candle
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00:14:41,008 --> 00:14:45,208
before the strong up movement
occurs on and on the supplies
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00:14:45,208 --> 00:14:48,808
on the last up move candle
before the supply before the
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00:14:48,808 --> 00:14:52,088
strong movement to the downset
will occur okay that's the
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00:14:52,088 --> 00:14:55,128
exact rules of it and what you
would like to see is that the
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00:14:55,128 --> 00:14:58,048
price will definitely break
some structure because if it
200
00:14:58,048 --> 00:15:01,808
will not break structure then
it will just push the price
201
00:15:01,808 --> 00:15:06,888
till that structural arrange
okay and if it will put only
202
00:15:06,888 --> 00:15:11,028
till the arrange then you can
still expect the opposite
203
00:15:11,028 --> 00:15:14,908
direction to occur and and the
most of the times it will do it
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00:15:14,908 --> 00:15:17,908
like that because this is how
they trigger the people by
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00:15:17,908 --> 00:15:23,068
breaking minor structure
previously before the real
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00:15:23,068 --> 00:15:26,748
movement will occur. Okay
hopefully that makes sense for
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00:15:26,748 --> 00:15:29,628
you so this is just a theory
right now behind the supply
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00:15:29,628 --> 00:15:34,388
demand and look at this guys
this is how you can then refine
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00:15:34,388 --> 00:15:39,368
it because then you will put
your demand here you put your
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00:15:39,368 --> 00:15:44,608
demand in here and it will make
your demands on automatically
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00:15:44,608 --> 00:15:48,568
much much better so your risk
reward will be increased in
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00:15:48,568 --> 00:15:52,968
insane so it is an insane
increase in risk reward in
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00:15:52,968 --> 00:15:56,888
comparison it's right now to
the other ones okay so normally
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00:15:56,888 --> 00:16:00,968
you would have been using right
now this whole range over here
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00:16:00,968 --> 00:16:06,688
okay so three that's a 7. 6 and
you don't need to use that
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00:16:06,688 --> 00:16:10,728
mathematical thing so you look
you look for logical things
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00:16:10,728 --> 00:16:13,208
right because you know okay in
the lower time frames you have
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00:16:13,208 --> 00:16:18,568
it anyways right you have any
ways your confirmation fight.
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00:16:18,568 --> 00:16:22,728
So let's see in the next video
guys.
20558
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