All language subtitles for 8 - FalseBreakouts EN

Okay folks.

Welcome back.

This is the eighth and final teaching for
the second month of the ICT mentorship.

This is month October.

We're dealing specifically
with market-maker travel.

Of false breakouts.

And we're talking about specifically,
uh, in this teaching, uh, one side

of the marketplace, just for the sake
of saving time, everything that we

show you will be just re uh, reverse.

Everything has been shown.

So a false breakout
above price consolidate.

Uh, this condition generally
manifests in primary bearish markets.

In other words, if the market's in
a downtrend, or if we're presently

trading lower or expected to trade
lower, a false breakout above the

consolidations is reasonably expected.

And generally what you see manifest
itself at some measure of equilibrium and

price, the market will move into a trading
range, neophyte traders or breakout

traders will bracket the trading room.

In price with orders.

That means they're going to have buy stops
to break out when the buy above the old

highs or self stops below the old lows to
sell short a break below the old loads.

In other words, they're trying to
capture a trend and they're going to

put a buy order above the marketplace
and a sell order below the marketplace

because they absolutely have no idea
what's going on more breakout traders.

They just want to bracket the marketplace.

Long-term trend followers.

Uh, they don't mind taking a lot of
losses, uh, with the hopes of eventually

catching a large trade, but market
makers will typically send price above

the range to neutralize by stops.

So we're gonna focus primarily
on one side of the marketplace.

And again, assuming that the market
is primarily bearish, that's what

the market makers emo is going to be.

Okay.

Their playbook is to run the
buy stops above the marketplace.

Now false breakout below price
consolidations is obviously the opposite.

Uh, this condition generally manifest
itself, primarily in bullish markets and

at some measure of equilibrium and price,
the market will move into a trading.

Neophyte traders and or breakout traders.

So again, we'll bracket the
trading range in price with orders.

Again, looking to focus on buying on a
breakout or selling short on the breakout.

They are not privy or a student
enough to know what direction

they just simply want to react to
whatever the market gives them.

In terms of breaking out, above or
below what the market makers will

typically send price below the
range to neutralize the sell stops.

So graphically, what I'll show
you here is a breakout trader or a

neophyte trader's perspective on a
market that goes into a trading range

above the old high or recent high.

They will have buy stops for long breakout
traders and anyone that would be short.

Obviously a thereby stock will be resting
above that high and below the lows.

There'll be cell stops for longterm.

And cell stops for short breakout traders.

In other words, they want to capture
a move that would hopefully continue

going for a long period of time lower.

Uh, they would like to get short on
weakness and obviously bulls would like

to be, uh, when they're breakout traders,
they want to be buying on strength.

They think by breaking out, above
and old high, they there by stop

would trip them into a long position.

And their belief is that they're going
to hopefully capture a longterm trend up.

Now from a market makers perspective,
um, we look below the marketplace when

we have lows in the form of cell stops.

Now I'm going to focus primarily on a.

Buying environment.

Okay.

Focusing on, uh, you and a
market is underlyingly bullish.

Uh, everything that I show you
here would just be reversed

for when the market's bearish.

Okay.

Just to save, save time.

When the market breaks below the
consolidation, those cell stops

are used to pair long orders.

Now who's buying those cell stops.

It's smart money, but
what types of orders?

The rest of them?

If we know below the
marketplace itself stops.

What's the resting above
the highs by stops.

So naturally as the market moves
away from those cell stops being

ran out below the consolidation.

They're going to expand price.

Think of APTA.

Now they're going to expand the price
up to the liquidity above the old high.

So there's buy stops are going
to use to pair long selling.

In other words, we're going to scale out
their long positions or take some props.

Eventually the market will go
into another area of consolidation

or another trading range.

The market drops below that
trading range to take out the

sell stops below consolidation.

Now.

As soon as this happens, your thought
process should internally be going

on inside your mind with, okay.

They've already shown a willingness
to take the sell stuff below 108 55.

Now they rally price above
the 1 0 9 big figure.

We've retraced a little bit.

Okay.

So if they are taking the market below
this short-term consolidation, they're

probably going to run to price higher.

So where would those objectives.

What's resting above
that old high, my stops.

So if they're taking the market below
a consolidation in our understanding or

expectations is the market is bullish.

They're taking the market below the
consolidations, the run sell stops out.

The only reason why they're going to want
to do that is to absorb those sell stops,

to be counterparties for their loans.

When they are long when smart money's
long, how do they look to exit their

positions and book a profit or hedge?

They have to get out in a place
where there's willing participants.

Buyers are always above the highs,
either in the form of a buying breakout

or buy stops on short positions.

That's where the liquidity is.

Remember that market paradigm shift it's,
uh, been spoke about in this mentorship?

Well, we're talking about it here
again, just using in terms where

you can see how it's applicable in
price, price runs above that old high.

And now we have two areas at
which the market makers have both.

Long positions.

So now they're pricing in a bi-model.

So as the market moves higher,
okay, they're going to liquidate

some of their positions to hedge.

And they're also going to
liquidate positions that those

traders are at the bank level, or
actually speculating for profit.

So this is how they actually take their,
their trades and put them on and how they

scale them off, where they're placing
their entries and where they're placing

their limit orders to get out with it.

But what's over here.

What rests above that?

Remember I showed you in the first month
of this mentorship in September specific

things to look for clean highs and clean
loads, whether it's an area ready to right

here, that clean highs above from where
we're showing right now, after that 1 0 9,

15 level has been hit, there really isn't
much in way of liquidity, voids, or pools.

That would be a much of interest except
for those stops right above those Eagles.

As you can see price expands.

Think now in the interbank price
delivery algorithm, it's going to expand

up and it's going to seek liquidity.

That's what we see here.

Then what happens?

Price and variably.

We'll go, we'll go back
into a consolidation.

Now what's the underlying
condition of the marketplace.

It's bullish.

Why?

Because they keep taking price below
and then rejecting that absorbing

the sell stops and expanding prices.

Is there any reason to suspect
that price could go higher?

Look at the price action you see here.

Do you see anything that jumps off at you?

If it doesn't, we'll come to it as we
move forward in this example, but we have

a consolidation and here are reasonable
expectation would be to see price seek the

sell stops below the consolidation price.

Does in fact, go below the consolidation.

What's above this old house.

Liquidity now, do we always look
at the old high or would we look

for, do we consider the Wix?

We can, but primarily all the volume
is seen in what the wicks are, the

bodies, the bodies of the candles.

So the body of the candle is,
has the most volume, so that

liquidity is going to rest above it.

So if they took the stops out below the 1
0 8 95, They're going to look to run price

higher in the form of 100, 9 40 or higher.

But initially we had that short-term
consolidation, the buy stops

resting above that they could
scale off a position right there.

And the next objective would be 1 0 9 40

as you can see 1 0 9 40 is swept moving
just above the bodies of the Canon.

Note the way that the orders are
stacking higher each time when they

buy they're buying a little bit
higher each time and they're working

their orders in and still offering
opportunities to scale off and profit.

So the hedges can work this month.

The speculators at the bank
level can work this model.

And they're also providing liquidity
for those individuals that want

cell stops to be activated.

If the market goes down to those
positions and those individuals, they

won't buy stops above the old highs.

They're happy because their liquidity
is being provided as well to think.

Remember that market efficiency paradigm,
you have to think like a market.

Now we have a larger trading range.

Now I've kept that area of which
old buying was done at 1 0 9 90 F

I'm sorry, why don't 8 95, but now
we've moved into a larger range.

Nothing's changed here.

The model is still bullish.

So we see market action trade below that
consolidation trades down into 1 0 8 85.

So with that movement down into that
level, where is the liquidity at?

Above the old, huh?

At 1 0 9 45 or so that's
what you have up here.

So what is it specifically by stops?

So we have willing buyers that
are waiting up there for price.

Once it gets there, they're buying smart.

Money's buying at 1 0 8 90
or 1 0 8 85 in that area.

And they know that there's going
to be willing participants to be

buying it from them when they want
to sell it for a profit at 1 0 9 45.

2 1, 2, 9 50.

So one to 9 45 to one to nine 50 is hit.

So the buy stops are
used a pair long exits.

So now we look at, we have here, we
have a wonderful example of how using

consolidations with the expectation
of viewing the market with that

market efficiency paradigm to spoke
about where we think like a liquidity

provider, we can still speculate.

We can see.

Hedge, we can still make a
profit using the same model.

It answers all of the problems as it
relates to trading, but specifically

it offers the answer to liquidity.

Providing buy stops are activated,
and th they're actually, uh, um, given

the ability to, to be, uh, effective
and sell stops at the same time.

So what the market makers
do, we can develop by them.

We can say all those
Rascals, they did this to me.

They did that to me.

Okay.

But what they're doing is their job.

They're providing liquidity, the
absence, or lack of understanding.

Yeah.

Traders, have they attribute that
as the, those guys, they, they

did it to me and they usually
misappropriate that to their brokers.

But what it is, it is the market
maker is providing liquidity.

And if you understand how the
market seeks liquidity, that's the

number one driver in price action.

The market will always seek liquidity.

And where is the most
recent area of liquidity?

That's been untapped with
the least of resistance.

And that will give you the
directional bias when you're a trader.

But when you see markets go on
consolidation and you have an underlying

directional premise, or you arrive at one
based on studying the market like this,

you can quickly ascertain trade setups and
some, uh, signals will jump off the chart

at you by way of looking at it like this.

Again, we have to look at price with
that market efficiency paradigm.

We do not look at it as give me a binder.

Okay.

Think like the market maker, if you
had complete control of price, where

would you drive price at to allow
other traders to get in and at least

facilitate their trades and least
whether they're right or wrong.

That's not the, the, the problem here.

Where's the buyers and
where's the sellers at.

And if we look at the market in
this scope, in this perspective,

we'll know that we'll always have
buyers above old highs, and we'll

always have sellers below old lows.

So if we know that that's where
liquidity rests, all we have to do

is discern whether or not does the
market want to seek the buyers or

does it want to seek the sellers?

And the way you get that indication
is by studying when they go into

consolidation, what side of the market
they reaching for, and then where's

the market going after it happens.

And here you can clearly see every
time there's a consolidation.

The market seeks that
liquidity below the market.

And once it absorbs it, it
quickly runs the other direction.

Why is that happening?

Because the market makers are facilitating
their long positions and building a

bi-model in the price or in this asset.

So we can expect to see every time the
market goes below these consolidations,

these movements below it are always going
to be viewed in our eyes as a false break.

So the false breakout that would
trip up traders otherwise, or knock

them out of profitable positions, if
they would have been, uh, remaining

long, we can view the marketplace
with the market efficiency paradigm.

Seeing it as a provider of liquidity,
see it, and just in the same scope or,

or perspective as a market maker does.

And then we're suddenly in
line with the market maker.

We're not beating the market maker.

We're not trying to
outsmart the market maker.

All we're trying to do is get in
line with what their motive would be.

What's their Mo what ha how,
how are they going to book them?

For this particular day or
for this month or this week.

Okay.

How are they going to do that?

And by looking at the models that we're
showing here with looking at ranges and

when they break below the ranges and we
see willingness is to rally after that,

it gives you your first telltale clue.

Every time the market goes into
consolidation, expect every drop down

below and old area of consolidation.

Expect that to be a false
breakout and anticipate.

Accumulation of long positions and in
the market, once they can accumulate

their long positions, then they will
reprice the market higher running

for the buy stops above old highs.

But what else do you see here?

I mean, if you're looking at this, what
else, if you were to study this for

a moment and I'm going to ask you to
pause the video, study this for a few

minutes and see if there's anything
else that jumps off the chart at you.

And don't be discouraged if, once I
show you what it is, if it wasn't.

Yeah.

This first price swing from the
first initial false breakout below

the old loads and consolidation.

Once that rallied up and we gave
another area where we can buy again

at that 1 0 8 75 level, that, that red
area, if you will, I guess it's red.

Um, it's a measured move from
that same buy and it gives you

an approximation of where the
algorithm will reach for, to offer.

And we see it reach up into that 1 0
9 25 level from 1 0 8 75, which is the

measured move from the initial low that
it ran up and created that first red

box in the first impulse price swing.

Uh, the second leg in price
higher is equal to that first one.

Also the larger price swing.

From that first initial buy all up
to the enemy at term high or the

midpoint of the overall price swing.

Once we had that larger consolidation
and it went down and traded into

1 0 8 85, when that happened,
that same measured move from 1 0

8 50 up to 1 0 9 45 or thereabouts
that same measured move from the.

The stop run at 1 0 8 85, that gives us a
projected run up to that 1 0 9 80 level.

And you can see that was handsomely hit.

And ultimately that one a nine 90,
as we spoke in real time at the time

of this recording in the mentorship,
uh, which we spoke about that one a

nine 90 level being directly linked
to the bear shorter block on a daily.

And all these things coalesce.

They, they start to come together.

They dovetail beautifully, but
understanding each individual

component will help us bridge.

Vast chasm, if you will, of what goes
on past the right edge of your chart.

Uh, you see a lot of times where I'll talk
about things and I'll give you a scenario

of what I think is going to happen.

But specific levels that I
think is going to go and be hit.

The reason why I'm able to do that
is because I'm looking at the market,

just like I'm showing you here.

I'm looking at how the
market maker is booked.

How is the market maker,
manipulating price?

What side of the marketplace
are they working on?

Where are they punishing?

Those that are less informed.

Okay.

And if they're seeking one side
of the marketplace over and over

and over again, and they keep
expanding price away from it.

In this case, it's been,
the cell stops being ran.

Every time to sell stocks would
be ran below a consolidation.

It runs higher and it
goes to the buy stops.

It just that's the easiest way to
see if we're really in a bullish

market or bullish market profile.

It's not as easy as everyone says with
the textbooks where you draw a trend line,

it's sloping up and just every time it
touches a trim on you by now, you gotta

look at where the orders are going to
be residing, and it gets back to that

market efficiency paradigm by having that
model and focus when you look at price

and when you see market consolidations,
when it breaks below that, and you start

seeing the market trade higher, every
time the market goes in consolidation,

they're priming the marketplace.

To allow cell stops to below build
up below those consolidations.

And obviously what we shown
here was just for a buy-side.

If everything was reversed and we were
seeing consolidations in the market rally

up, taking the buy stops out and then
quickly running lower and then moving

into a new consolidation and in market
running higher running to buy stocks

and accelerating, going lower again,
everything would just reverse itself

in terms of everything we've explained.

So I hope this has been insightful
to you and look forward to our

third month in the mentorship.

So get your notebooks ready because
there's going to be a lot more

information, but by way of price
action, and we're going to be

focusing in on detailed concepts that
has been shown in the free mentor.

Uh, free members area on my website
and on the videos, but all the gaps

that I left in that free area of
teaching, I'm going to, I'm going

to fill that in as we go forward.

So with that guys, I wish you
good luck and good trading.