All language subtitles for 6. fairvalue EN

Welcome back folks.

This is ITT with a sixth installment of
the eight teachings of September, 2016.

ICT mentorship.

We're gonna be specifically
dealing with fair valuation in this

teaching and fair evaluation comes
in the form of two perspectives.

Fair value in regards to equal distance
of a high or low or what we would

call equilibrium or fair value for the
perspective on valuation as regards to.

Market makers, and I'm going to cut mind.

Both of them.

They give you the perspective that you
have to have when you look at price.

This is actually a chart that
we mapped out in advance.

Talking about a lot of these
very specific things here in

the week to have this tutorials
production, September 24th, 2016.

Um, we called Australian dollar.

Based on the things that
I'm going to cover here.

And I was aiming for 76, 65 as a weekly.

And you can clearly see here
the market did in fact hit that.

What led to these ideas behind
me giving these options side

objectives from an area down here?

Well, first you have to understand
there's a lot of overlap from what

we just covered in the previous two
sessions, that being equilibrium to

discount and equilibrium to premium.

Um, obviously if you're a buyer,
if you want to be buying, you want

to be looking at a discount market.

That means trading in a lower third.

Of the current trading range that the
markets, uh, presently or currently

created and its most recent impulse
leg or impulse price line, the cells

are best taken in the most current
trading range or impulse price swing,

upper third portion of that range.

Okay.

That's a premium market.

We're selling at a premium.

When the market returns back to
an area of fair value, that is a

fair value for the market maker to
either sell or buy in this case.

We're going to go over again, both
concepts in regards to equilibrium

and the fair valuation for
market-maker participation in price.

Action.

Swing here just making this high here to
market broke down and it quickly ran away.

And this is what we call a liquidity
void, where the market makes a sudden

movement lower and large ranges.

Very little Wix, very quick moment.

That is avoid.

That means the price spent very little
time trading at these price levels.

And it was in a hurry to get down
to this area here where it started

trading more efficiently, back and
forth on both sides of the candle.

And ultimately having a retracement this
range in here, as soon as we see pockets

of price action, where there's sudden
movement lower, just like we saw a quick

sudden movement lower here, this up candle
at the bottom of that, that's where we

start watching and measuring fair value.

And the down candle here.

Very next candle is up candle.

So we start looking at the range
between this up candle in this up

candle between those two up candles.

There's what's referred
to as a fair value gap.

Okay.

Fair value gap.

The reason why this is important is
because there was no up candle or up

movement between the break of that
low and the high of this candle.

It was all just straight down movement.

So nothing filled in this area.

Once price broke this low, left it open.

Basically it's like a gap.

The same thing occurs here.

When this up candle is broken here on
this candle, once it started breaking

lower, there's a gap between this candle
is low in this candle, body or WIC.

Okay.

So I defined it by the body
and I like to use those.

The range in which it causes this Boyd.

Okay.

When price is below that this
is going to be fair value.

Okay.

The market's going to want to
come back to that because there

was very little trading in here.

Just like we said, there was a gap
because there was no movement up in

this area here between this up candles
low and this up candles high, this area

in price action only saw downloads.

Didn't have any up candle
movement, only down movement.

All this down here is down candle
price action, only big ranges.

So this is a liquidity void.

The fact that it creates
it in big ranges and speed.

That's what defines it now because
price moves so quickly in these areas.

Fair value.

Is established because there's going
to be a willingness to want to see

price trade back up into these levels.

And here in closing all this,
in other words, there's going

to be up movement later on.

It won't happen immediately.

Always.

Sometimes it takes a little bit of
time sometimes depending upon the

timeframe you're looking at it, it
may take a great deal of time, but

when price starts to move higher, we
know that they will try to trade into

this range here and fill that in.

And.

That is where market makers view
fair value now, equilibrium or fair

value in regards to equal distant,
uh, range between high and low

of a defined high and low range.

That being, if we have this low here and
this high here, if we define that, yeah.

Okay.

We have equilibrium right here, or
50% of that range from this high,

this high to this low here's equilibrium.

Okay.

Look at the bodies that it came.

We'll stay above that, but we have a lot
of work around that equilibrium price.

That in that in itself is significant
because it's showing you to the market

brand through a short-term high.

Once it ran through it, it came back down
right back to the middle of the range

or fair value, which is equilibrium.

At this moment.

Price could stay in this consolidation
for a period of time of any length.

We don't know how long
price is going to stay in a

consolidation, but at equilibrium.

You need to refer to where the
most recent price swing took place.

In other words, if we're at equilibrium
here or at fair value of the market

can go either way at this price level,
the easiest way to determine where it's

most probable direction is, is where did
market structure break most recently?

Did it break a swing high or did
it break a swing low most recently?

Well, there's nice swing low in here of
any significance, but there is a swing

high up here that it broke through here.

So when we made this low
price ran through it.

Clearing, not these highs.

Regalness up candle price coming
back down into equilibrium.

Do we define the range from here to here
as you're looking at price, you always

want to get a feel for where you're at in
regards to the most current trading range.

Also notice that we are in
the lower portion of the range

defined by this high and this low.

So we're in a real low area where
it would be deemed over sold.

So we have a range concept blending with
the fact that we're moving back into

the middle of a smaller consolidated
trading range with a market structure

break of recent high in here broke to
high, and it came back to equilibrium.

So the highest probability in
terms of direction is going to

be going short or going long.

Well, obviously it's going to be going
long, but the mechanics behind it was.

That the fact that we broke this
swing high, we had this void in here.

Okay.

We had weakness in the dollar, which
we're not going to talk so much about

correlation between dollar based, uh,
analysis of the world, and specifically

dealing with price action along here.

But what led to this bullish
movement and Aussie dollar this

week was the fact that we moved back
into a fair value or equilibrium.

So that way.

It's fair value for the market
makers to build in long positions

or build a net long book.

That means they're building
accumulating long position.

The down candle rate before this
move up through a short-term high,

that is a bullish older block.

So price comes down into that headset
at the same time, it's hitting it

equilibrium and it's deemed fair value.

It's fair value because the market
traded back down into an area where

it would still be bought again
and where it should be expected

to see buying pressure come in.

We don't want to buy it up here because
we've already broke a swing high.

What are we doing up there?

We would be, we would be buying it.

That's not what you want to do.

So you're going to blend
a couple of things.

When you're looking for high probability
setups to get fair valuation, you're

going to be looking at the current range
from high to low in this area right here.

We're in the lower end of that range.

So we have a lot more upside to
building a premium, like we just

discussed in the previous tutorial.

Okay.

Market will go to a premium.

Okay.

The market's buying at a discount.

Okay.

And it's an equilibrium.

Is it fair valuation because we're
in the low end of the range from this

high to this low, and we have all of
this open price action rate in here.

So the market's going to want to
come up here and close that in.

It doesn't have to come all the
way back up to this candle's low,

which is a bearish order block.

This up can the right for the day.

All this isn't needed to
give us a directional bias.

We have a swing high in here
where we know what's going to

be resting about that by stops.

So we know that there is a strong
likelihood that because we're in

the low end of the total range,
which is this low to this high.

So this is the parent price.

In this high, to this low,
we create a short-term load.

It was higher.

We broke through a swing.

Came back down into equal distance of
the high to the low E as equilibrium.

We are now at fair valuation, for what?

For longs to market makers can build
a net long book at this price level.

Now, if they're going to do that, they're
going to a book for fair value above the

marketplace, where they can do what sell
their positions at a fair value for them.

Up here.

If traders are buying this chasing
price, are they buying at a fair value?

No.

To buying a premium, remember that
we just discussed in regards to equal

equilibrium to premium the range from this
high to this low we're above 50% level.

And here we're in that upper
portion of the optimal trade entry

or 62 to 79 cents Tracy and level,
I'll show you what that looks.

The low to the high

79% chasing level, 70.5
62% trace in level two.

The market goes right
up into 79% retracement.

So we're in premium here.

We're uh, we're below equilibrium here.

So we're at a discount down
here relative to the rent.

Down here.

We're at discount.

Okay.

In terms of looking at the, the low to
high, this is where the premiums built in.

If we reverse it

and look at the range and opposite
terms, defining it from low to high.

We're below the 7, 9, 7 placement level.

So we're really at a deep discount,
really, really deep discount because

we're below equilibrium relative to
the range high and the low, or even

below the 79 cent treatment level.

So in terms of really being suppressed
in terms of the total range high to

low, we are at a deep discount in the
middle of a current small little trading

range from this high to this low.

So we're at equal distance price
management of high, middle, low,

and end to total end or lower
one third of the range of the

parent price swing that we see.

Right in here.

Okay.

Even if you didn't see this high
to low as the parent price swing,

this price swing high to low still
gives you the same context, just

in a slope on a smaller scale.

So you have high to low we're in a lower
one-third here, and we're deep discount.

Here's equal distance or
equilibrium we're below it.

So we're a.

So fair valuation for the market
makers to build a book long would be

so many overlapping factors there.

They could be building long positions or
accumulating long positions here looking

for what liquidity above marketplace.

That means where above these highs
that initially it just sold off of,

then you have to buy stuff to vote here.

So the market runs through that
takes, those stops, runs through

this short-term high here.

And then what is it?

Goes into consolidation.

Now, if it's a turtle soup and it
wants to go lower after blowing out

by stops, it should go lower quickly.

It doesn't do that.

It's staying in a sideways consolidation.

And in fact, during this week
actually gave life sessions,

explaining how this market was
point pointing to higher prices.

It went back into consolidation,
which means it's going back into.

It's building equilibrium.

Okay.

So equilibrium is building again
in that small little range.

So you define the high
and the low right there.

And look how much price axis
spends around the middle point

at equilibrium price point.

Okay.

So it's hanging around fair value.

Okay.

One spike move lower.

Doesn't see price go lower.

Any in any significant it
doesn't break the rain.

And it expands to the upside.

Once it expands the upside, it
starts filling in all of this.

Again, this is another area of fair value.

The market's fair for those long
positions for the market maker

that had already Akili along.

So one it's good.

This is a good area in this shaded
area and extend this out in time.

We're here.

All of this is a good place for them
to sell the longs that they started.

The helium down here.

Look how much time they whipped
back and forth in that range.

All these wicks.

Okay.

They're selling, they're selling
the sound, all the positions.

They have accumulate here,
accumulated here and down here on

the initial rundown into the support.

Once this range has closed in
the next area of concern is

above this short-term high.

To avoid filled in right here.

It's filled in.

So this is no longer an
area of interest now.

No more.

Now we still look for higher prices.

Why would we still look for higher prices?

Because they went long here.

Okay.

So if they're going to look to sell
their position where they look to

sell their positions at discount
prices or premium premium, but the

premium price that speculators would
trade at by buying and chasing.

It's a premium to price chasers.

People that feed off the desire
of being at a price to move

it's already been moving higher.

It's fair value to the market maker to
liquidate their positions at this small

little pocket between this Lowe's is
up candles low, and this candle's high.

So we can now create a new
specific area of fair value.

For the market maker to liquidate
their long positions in here, right

in here to draw that out in time.

That's what you see here.

Price coming right into the bottom
of that candle hits it perfectly

to the pit bodies of the candle are
still deep inside the shaded area.

For fair, fair evaluation.

What makes it fair is because
they bought it at a deep discount.

And they're liquidating at a
premium it's fair for them.

The acuity here, and it's
fair for them to liquidate.

See market makers have to
deal in terms of valuation for

their lungs and their shorts.

And they have to do that same
valuation for their exits on

both sides of the marketplace.

So when we see inefficiency in price,
like we see here with these candles only

going down, no up movement, only going
down here, no up moving in it until later.

All of this area, they're scaling out
their positions that they accumulate down

here, here, here, when price moves in
defined trading ranges, there's going to

be equilibrium, equilibrium isn't itself.

Fair value.

That means the market makers are
holding it in a consolidation.

When that consolidation gives way.

The strongest move out of that
consolidation on alarm or a hard timeframe

chart will give you a great deal of
prognostication for directional bias.

So what I mean by that is if
we look at price, I want me to

take a look at it like this.

We can look at price like.

From this high, down to this low.

To have a range defined there.

Okay.

The market's in this range here,
consolidates, it goes right back to

equilibrium, hangs around equilibrium
dips down below the equilibrium.

So even if we're monitoring this
range from this high to this low we're

below the equilibrium price point.

So are we at a premium right here or
are we at a discount where the discount

traders on a retail level, they're
going to see this as a selling point.

They're going to love it.

Because they're going to see this
high, to this low coming up to

62% retracement level McNamara.

I said in the last two
sessions is not enough.

Let's look simply looking at Fibonacci.

You can get tripped up and fed Nazi.

If you don't understand what
price is actually telling you.

So getting short here is not what
you want to do, even though he'd

seen price and movement going lower.

It's only coming down to an area
of fair value for the market

makers to accumulate loans.

In the area of discount.

So you're having an
overlap of three things.

You're looking at total range from
this high, to this low, or this

high to this low we're in the lower
portion or one third of the range.

So we're in high probability for
a discount market to be in effect.

You're also below the equal,
uh, price point for equilibrium

between the low to this high.

So it's consolidating your that,
but it, now it went below it.

So we are in an area where the
market makers can buy, especially

if you combine that with areas
of institutional order flow.

So if you're looking to buy, what
would you be looking for an area

to run out, but low the stops.

In other words, sell
stocks below and elbow.

We don't see so much
of that happening here.

It doesn't need to do that.

It's only returning down to this down
candle, which is a bullish or block a down

candle before the market moves higher.

That's where market support really relax.

Um, we're not really
realizing resides in okay.

Uh, up candles for the market drops
down that up candle is exactly where

resistance is an institutional basis.

So that's where selling occurs.

So when we see price action like this, we
can define things in terms of fair value

in relationship to how the market makers
are going to perceive price the way they

value price in terms of the current.

Range that it's trading in the same way.

The algo delivers price.

Where are we at in proximity
to the current total range?

We have a nice impulsive
price, swing high to low.

Here we are in the lower
portion of that range.

Here we have built-ins by stop.

The boat is high above this high
here, above this high here, and

we have value, uh, evaluation gap.

Okay.

If you're a value gap, market's
going to want to come back up there

because it's spent very little time.

In this area, it was all down movement.

All down movement.

No, no buying was actually
occurring in here.

No buy-in was occurring in here.

It was all on the south
side one-way flows.

So the market ran up into just
to close in where only selling

took place and no real buyers.

So now when price comes back up
to that level and they shoot it up

there like that, that's going to
make a run on stops above the swing.

And we're just gonna close in the range
between this up candle and this up

candle here, which is a fair value gap.

So when we're looking at price
action, it's a couple of things

you need to keep in consideration.

The total range of trading in the
equilibrium price point relative to the

most recent trading range, high and low.

And we defined several of them here.

We did this high to this low with this
high and this low and this high in this.

So we have multiple things lining up
with the fact that for fair value sake,

the market has a deep discount here and
it's most likely going to trade higher.

And we have reference points
that we can look for where

the market makers should aim.

But ultimately this is the fair value
get that they wanted to get back up into.

And the reason why the basis was me
calling 76 65 for the week was I want to

get just below where I ultimately think
it's going to go and the level at which.

If we look at the high,

the low comes in at 76, 75, and I want to
be about 10 pips or so before the actual

level I think is actually going to be hit.

I want to be getting out of
this a little bit before that.

And one more instance of the things
I talk about before it happens in

the charge and why those things
actually materialized in price.

To price returns back to
fair value, fair value.

In the perspective of the market maker,
not fair value in the scope of buying.

This is a premium.

Okay.

Remember that market efficiency paradigm.

I started you all with how you perceive
the marketplace is not how retail

is going to seek the proper price.

They're going to see this as the
market's going to probably keep

going up because it's been going up.

Well, this is an area of distribution.

You want to be thinking accumulation
down here, re accumulation distribution,

scaling out all through these areas in
here, because you don't know if it's

only gonna come up that little bit,
that, that range over here in the shaded

liquidity boy, you don't know if it's
going to fill in that and then go lower.

So when you buy things now in here at
deep discount, you have to scale some of

it out, but the beginning basis points.

Okay.

Valuation in terms of the market
makers, you have to look at the

total range, look at where the
market has moved away from quickly.

And those areas of liquidity, voids,
and liquidity, uh, uh, pools above all

highs here and here and here there's bad.

That is going to be fair value for the
market maker to distribute long positions.

If we were looking at a sell
position, we're a short position.

We will be looking for areas in
which we're the market in the past

has moved up a great deal speed.

And we would be looking for lows where
stops would be building up below it or

liquidity pools in the form of cell stops.

We would look for the lower end of
the most recent range for valuation.

So that way you would know by
looking at things with that market

efficiency paradigm, you're not
looking at things like retail.

You're looking at it in the
scope of, okay, I am the bank.

Um, I'm making a book here.

What's the most efficient price levels for
me to unload my lungs or unload my shirt.

Physicians.

We've already mentioned it so far in
the teaching, just for September, the

easiest way to understanding institutional
order flow from the beginning.

Starting point of it all is understanding
that markets move from buy stops and

sell stops and sell stops to bias.

And it moves from fair value
to discount, to discount, to

premium, to premium, to fair value.

It, it moves back and forth between
these three reference points.

Are we at a discount?

Are we at a premium or
are we at fair value?

All those things combined together,
they give you the clues as to what we're

seeing in terms of the market-makers,
uh, accident or the accumulate.

Are they manipulating cardio,
distributing all those factors.

We're going to be bringing
those closely knit ideas into a

more easily understood premise.

When we look at price, we'll be
able to see these things unfolding

in, in advance, and you'll be able
to see what should take place.

And it's very encouraging to see your
study in these individual components.

Start to flesh out and have a greater
understanding about price action.

In closing fair value is not fair value in
the realm of retail it's in the realm of

fair value of liquidating or accumulating
from the market makers perspective.

Fair value in discount is fair
value for buys from market maker.

Buying fair value in premium is
fair value for market makers.

Either establishing new shorts or
exiting on scaling out long positions

discount, the low equilibrium
in the lower ends of the range.

That's a discount market.

That's an area at which the
market makers can buy or look

to cover their short positions.

Do not look at the marketplace
in this retail mindset that

we're all trained to do.

W we had the same, well, we drink.

It's the same regurgitated stuff,
but it's wrong to understand how

these markets are, are delivered
to us in the form of price action.

When this price is delivered
to us, it's not random.

It's very specific of where it wants
to go, why it wants to get there.

That's what we're, that's what
we're giving you in this mentorship.

It's very specific, detailed
perspectives that are generic.

They repeat themselves over and
over again, and because they repeat

themselves and because they're the same.

Phenomenon take place
almost on a daily basis.

There's nothing for you to fear.

If you mess it up and you don't
get the trade to pan out, right.

Or if you miss a move,
do not worry about it.

Wait for the market to give you
indications of where fair valuation is.

Then you'll be able to anticipate the
market makers next scale in or scale out.

It may be the liquidation
of a long position.

That's been on their way that may give
you a prognostication for a future.

It may be the, in the inception of
a new price leg while you're waiting

for this area to be retreated to
we'll build on this idea for now.

But I want you to think in terms
of where we at relative to the most

current range, are we in the lower end?

Are we near the low of that current range?

And are we working around an equal
distance equilibrium price point between

a recent high and low by defining
price in current trading ranges like

this, you'll be able to see where the
market makers will expand the price.

So when there's expansion, you
know, prior to that expansion,

there's been, what is consolidation?

So as you study more examples of
when markets are in consolidation,

you'll be able to tell.

Forecast the next movement
out of the consolidation.

We don't, we don't play the breakout game.

We anticipate the breakout.

We know that the indications
through price action will give

us clues as to what side of the
marketplace it's going to break out.

And when we get into commodities,
we'll have actually a great advantage

of that without using open insurance.

But for Forex, you don't need it so much.

You can still see it
in institutional work.

So I'm going to close this teaching
here with the promise that we're

going to come back at the end of
this series of eight sessions in your

notes that will accompany your months.

Summary you'll have great detail of
a specific like notes and things that

you need to be aware of as it relates
to fair valuation, uh, liquidity.

Points, uh, liquidity
gaps, all those things.

We'll be building more foundation on that.

And in month, two waxy Gillan to how the
find these things, not just giving you one

chart's perspective and, and basically,
uh, you know, trying to teach the whole

thing in one, one chart, it can't be done.

So you need examples of it.

You need to see it, uh,
called for in advance.

Like we did this week.

Not so much why.

Um, into this great detail, but I gave you
the areas of what price should reach for.

We talked about the area here.

We talked about this void here.

Um, and obviously we only would
need to talk about the highs because

we understand that that's where
the bus stops are going to reside.

So think in terms of fair value for
the market maker, if they're going

to go higher, where is it a fair
value for them to exit their loans?

Okay, it's fair.

It's a fair value for them to do so.

They do not want to liquidate
your lungs at a discount or

on retracements going lower.

You look for expansions on the upside.

When they expand my price expands,
they should be reaching into an

area of fair value for price to
be liquidating smart money loans.

That's the only reason
why our markets go up.

That's the only reason why price is
allowed to be delivered at higher prices

because the market makers, the banks
have books on their books that are

net long and it's in their interest.

As the price higher, it doesn't
matter how many of us buy the price

is going to be set by the bank.

And they're going to do things to
line their own pockets and not yours.

So it takes a perspective shift.

And it gets back to that
market efficiency paradigm.

I started you with in this mentorship
that you have to view things from the

smart money's perspective, not what retail
should be dealing or what retail is doing.

If you do that, you're gonna, you're
gonna miss the actual clarity that

comes through looking at price action,
studying it through a contrary and

perspective, saying, okay, this is what
the retail minds should be thinking now.

And by contrasting that with what
you see in the charts, prepare value,

liquidity gaps, liquidity, voids,
liquidity pools, all these things.

The market's going to seek that
liquidity and run against the

less informed crowd's opinion.

So at that, I'm going to close and
wish you good luck and good trading.