All language subtitles for Lesson 5 - Low Resistance Liquidity Runs In Consolidations

Welcome to lesson five folks.

Short-term trading.

Just, teaching's going to be specifically
talking about low resistance.

Liquidity runs in consolidations.

Okay.

We have to preface it by a reminder
of every setup that we look to execute

on and stock and the track, if you
will, is based on time and price.

And the time element is going to be
related to the up-to-date ranges.

Last 60 days, 40 and 20.

And we're going to be focusing
on premium and discount PD erase.

So for short term trading, we work cell
in the range of the last three months.

So the up-to-date range of 60
days is our look back period.

And it's going to comprise every
element that we need to frame a

short-term trait or one shot, one kill.

As a reminder when we deal with time
and price, price moves from a premium

to a discount array or from a discount
array to a premium array in between

these two realms of premium and
discount price, war key off of a time

element related to the data range.

So we're blending both time and price and
element of the last 20, 40, and 60 days.

Two eight institutional reference
point in the round of the Ray matrix.

Okay.

For our study and case study
examples, we're going to be looking

at the cable or British pound USD.

And this is a daily.

And what we do is we define
a market, whether it's it's

trending or it's in consolidation.

And obviously anyone with the average
intelligence in terms of market analysis,

they can tell looking at the British
pound, we have been in a consolidation.

Market's not been in a trending
markets, been in consolidation.

So whenever we see a market it's
range-bound or it's cannot move

outside of the current trading
range that you were looking at.

At any given time on a daily chart, you're
looking at a frame of about three months

again, and you'll look back three months
or 60 trading days, which is the relative.

If the data range that we use for
maximum definition of look back.

So when we have this framework in
terms of blast 60 days, what we

do is we have to define the range
in terms of a high and a low.

Now, what we do is we define the.

In the form of its highest
and lowest candlestick body.

We're not concerned about the wicks
so much, but we're primarily looking

at the bodies of the candles.

So I have here the lowest and the highest
in terms of the candlesticks bodies.

And you can see those reference points
here with the errors, and that's

going to be our range that we're going
to be framing all of our analysis

concepts as it relates to one shot.

One.

Okay.

So what we'll have to do is that we have
to look at the market in this range and we

can use a tool that's on every platform.

It's the Fibonacci.

So we're gonna use our fit, told
to determine the 50% of the range.

And we're going to note
that range midpoint.

So I'm dragging the fib
from the highest body cam.

To the lowest body candle.

In other words, I'm not using
the lowest WIC low in the highest

WIC high I'm looking for the
highest body on the candles.

Either it's an open or close.

I don't care which one it is, but
whatever, highest form of high open

or close, that's the one I'm looking
for in the last 60 trading days.

And I'm looking for the
lowest open or close.

And in the last 60 trading
days, that gives me my defined

range in terms of consolidation.

Then I'm new to the 50% level.

And I draw a horizontal
line on my daily chart.

Next, we have to determine the 50%
levels of the upper and lower ranges,

anything above the 50% level, that's
going to be our area, which we look

for sell scenarios either by taking
profit on lungs or short position.

And anything in the lower
portion we're looking for longs

or covering short positions.

Now the upper portion of the range
from the highest body close or open

to the mid point that we've defined
by the total consolidation range.

We measure that with the fit as well.

And I gave you two examples of
where you could draw the anchor

points with your fit, but the.

And you note the 50% level on your fib
and you drop a horizontal line near

by noting this we've now noted the upper
range for the total consolidation range.

Next, we do the same thing by noting the
50% level or the lower range between the

mid point of the total consolidation.

To the lowest body close or open noting
it's 50% level as well on the fifth.

And I drop a horizontal line on that.

Now what we have here is by defining
our consolidation range in this

manner, it gives us a form of
premium and discount identification.

Anything above the mid point or main
50% level or in his case, the gray

that would be deemed as a premium
range and anything below it would

be deemed as a discount range.

Next, we identify the PD
arrays in each new range.

Now I'm going to save us a lot
of time and just apply everything

from a monthly, a weekly and daily.

Okay, so now you can see it, all
of the, if the data ranges and from

a form of a premium and discount
have been applied to the chart.

Now, I want you to look at this from
him before we go to the next slide.

So pause the video here and really
study what's been identified.

So every premium and
discount array provide.

And the overall PD array matrix.

So what we're looking for is
a element of time and price to

blend a setup for a buy or sell.

We understand that the highest
probability trades for shorts is

by looking for any PD array in the
premium range of this consolidation.

So anything above the
mid point of the 50%.

I don't want a grade level here.

That's going to be ideal self scenarios.

If it is coupled with a PD array
for a premium market, we are

blending both time and price.

We would look for that move
to be correlated to a later.

Discount PDA Ray, when price moves that
down to either the 50% level of the total

consolidation or any level below the
midpoint or 50% level, the consolidation,

an example would be the fair value gap
and bearish or block in the premium level

around the February time period of 2007.

And pairing that with a weekly
bullish order block lien threshold

in a discount in March of 2017.

Now, when we look at their quadrants
like this, where it's been broken up

into a premium and discount, we can
also further define those quadrants.

Into their own respective or unique,
premium and discount trading range.

And what do I mean by that?

Well, let's take a good closer look.

As you can see here, the lower quadrant
can be divided into equal halves as well.

And that in itself can be viewed
from a premium and discount for me.

When we see these elements here,
anything that forms as a discount PD

rate and a discount range from this
view or perspective, this is going to

be high probability, short covering
objectives, or it's going to be high

probability, new long positions, and any
first profit would be best taken along.

Once it enters the pre.

Range of this, uh, PD Ray matrix.

Again, moving up the same thing
can, can be applied to the new

quadrants that's shown here.

Ideal longs are entered at the
discount level or a net discount

range and taking first person.

Would have to be best applied by
taking your first long exit in the

premium range of this PD array matrix.

Now, what you're looking
at is a daily chart.

So in the form of a four hour or one
hour, you'll see that there's going to

be premium PD res in those lower four
hour and one hour timeframes that you

could pair up first objectives for.

I'm giving you the elements to look
at through the scope of a daily chart.

And, um, finally we can apply
it to this area as well.

Each path is further divided into
new halves, but we're looking at

it in the form of an algorithmic
way of defining premium India.

So when markets are creating
discounts like this, again, this

discount range is shown here.

They're high probability longs, and
again, a four hour or one hour premium

PD at REA as defined here, you can't
see them daily, but you would drop

down into a lower timeframe, four
hour, one hour to take first profit

on your lungs that you used to get
entries on by buying in the discount.

Yeah.

Now we're above the mid point of
the total consolidation range.

So now, even though we're above it
and technically any overall premium

market, we can still take longs, but
it has to be defined in the scope.

As we're showing here, we have
the overall consolidation.

We divided it.

Half then we divide those
halves into halves as well.

So we have quadrants.

Then those quadrants are divided in
half as well as we're showing here,

incremental increases moving further
up the overall consolidation range

by buying in the discount range.

And again, taking first profit
in a lower four-hour one.

Yeah.

Premium range coupled with a
PD array that's premium based.

In other words, if we were buying,
for instance, the bullish order block

means threshold here in a discount.

Now, overall we're in a premium market,
but this is still a possible long

entry because we're in a lower portion
of that total larger premium range.

So we still have room to reach for high.

Premium PD arrays.

And obviously we have rains that
reach for much higher objectives.

So looking at it like this,
framing it, what would otherwise

be deemed as overbought?

We don't view it like that.

This is why indicators do not work
from a algorithmic perspective.

Looking at price ranges like this.

It gives us a greater definition on how
we can frame entries and classify them as.

Oversold or undervalued entries
for longs or overvalued or

overbought entries for shorts.

In this case, we could take a
example of the daily bullish

or block means threshold.

We could be buying there and in once
price trades up into the premium range,

we could look for a four hour or one hour
premium PDA rate, the couple and exit.

And moving further up
the consolidation range.

We have a new discount and premium PDRs
matrix, and we could define this as well.

And then what we're doing is we're
coupling the range as defined by

premium and discount with actual or.

In the form of fair value gaps, bears,
order blocks, weekly rejection blocks,

all those things to the left of our chart.

We're looking back that 20, 40, and 60
trading days for the up-to-date range.

So we're blending both time and price
in the form of premium and discount.

So we're blending the
elements of time and price.

We're looking at the market and
the scope of overbought oversold,

but not in the context of.

We're looking at it, algorithmically
in the scope of quadrants that are

broken down into premium and discount.

And by itself it doesn't mean anything,
but when price trades down to a PD

array, whether it be a discount or a
premium, if we trade into that element,

whether it be a bullshitter block, a
breaker, any of those things from the

PD array matrix that we've taught you.

If you're looking for a long.

The highest probable entries for
longs again, are entering in the

discount range and coupling it
with a premium range PD array.

It doesn't matter that we're in a
premium range of the role consolidation

because pride can move back and forth
and oscillate from the highest portion

and many times make us slightly higher,
high and return back inside of the.

And it can go to the lowest low move
outside the range a little bit and come

right back in the middle range as well.

So we're anticipating the oscillation
effect of price while it's in

consolidation, but in that consolidation,
there's smaller consolidations.

So we're able to look at price in the
view of overbought, never sold without

the element of indicators or relying on
mathematically derived number crunching.

What we're looking for is range
defined in the overall context of

the consolidation as we've had here,
we're in eight, the upper half of the

portion of the larger consolidation.

And by itself that would many times filter
out by signals from anyone else that

would look for over about we were sold.

But for us, we can frame this
with the oversold condition,

even in the element of a premium.

It's a discount market in a
overall premium market that

still has room to go up.

That's basically, in other words,
a layman's way of approaching

a definition, but whatever we
do in terms of entry or exit.

We're looking for elements to
frame the discount PD at Ray's.

That means bull shorter blocks breakers.

A fair value gets below us in
price, uh, trading below an old

low to take ourselves stops.

We're using those ideas to frame long
positions and taking first profits

at a four-hour one-hour basis.

Once it enters the premium
PDA Ray matrix range.

And finally at the top of the load larger
consolidation, we can see that there is

still an opportunity where one could be
a buyer, but the opportunities fall off

precipitously in terms of probabilities.

And you can see now that the premium
array area in order for PDA Ray matrix.

Bear shorter blocks, old highs, um,
bears, breakers, bears, mitigation

blocks, uh, all those ideas.

They're going to be much more influential
in terms of price action, and you'll

see much more dynamic price action
from that side of the spectrum.

And you can see that in the form of
the weekly rejection block prices

traded from in March of 2017, we saw
also a move away from the fair value

gap and bear shorter block again.

And.

Largely hinged on the fact that we
were in an upper portion of the overall

consolidation and we made it up into
that last smallest portion of the

premium market or premium PDA matrix,
the shaded area that says premium that's

the highest portion or last little
segment of price in this consolidation.

So anytime price reaches up into
that, it's going to have a much more.

Impactful response and price
when it trades to a various PD.

Or a premium PD rang.

So we see that happening with
a weekly rejection block.

It also took out an old
high formed in February.

So there was many instances
there where you can see why

price had a strong rejection.

Also keying off of that last
midpoint that's dividing the premium

and discount levels noted here.

Uh, we had a really significant sell
off and it trades all the way back down

into a daily bullish order block means.

Then we had a a hundred PIP move
that we called for in our day

to day, uh, meetings in charts.

And you see the response, it
trades right back up to what

the daily bearish order block.

And it also overlaps with
the premium 50% level.

So there's a lot of things that you
need to be able to look at conceptually,

and you have to do it on your own time.

I can give you a plethora of examples
over and over and over again, but this is.

Teaching that I've given you enough
that if you break your charts

down and do your own study, yes.

This is the part that requires
your work just takes study time.

It takes you, uh, wanting to be in the
charts, looking for it because I'm not

going to be there when we separate.

You're glad to do these
things on your own.

You have to find these, these
opportunities on your own, but by

having this element, what we're doing
is we're looking for low resistance.

Liquidity runs from
one PDA Ray to another.

From a discount to a premium, but we're
coupling it with looking back over

the last three months, because one
shot, one kill uses in excels inside

the last three months of trading.

So when we look back the last 20, the
last 40 and Alexis, 60 trading days, it

gives us framework to say, okay, where
is the premium PDA Ray matrix leading

me to, in terms of what I can sell.

And what I can reach for, for
longs, the couple my exits with, or

where my discount PDA Ray matrix.

And where are those levels?

I can cover my short set and I'm going
to look back over the last 20, 40,

and 60 days to pair those things up.

I'm also now applying ranges in terms of.

PDA rate matrix, whether it be
a premium or discount market.

So it allows me to build context of what
I'm looking for as an entry and how I can

look for my first objective in targeting

now in an ideal world, the best
buys are going to be in the lower

portion or lower half of the overall
consolidation and in the lower quadrant.

In other words, the discount matrix.

And the highest probability trades
for selling short or taking long

exits are going to be in the premium
range, divided by the upper portion.

So in other words, that last quadrant
that's going to be your best self.

The highest probability cells are
highest probability, uh, exits for lungs.

That's going to be your best scenario.

That's where the algorithm that's going to
reach for, for selling or exiting online.

And any long position in here.

Again, you have to take
it with a grain of salt.

You have to know the overall ranger in,
because just because you see a train

to a down candle, you have to have, I
understand that it has a room to go up.

And in this case you can see what
the daily bullish or block means.

Threshold.

That 100 pep rally was a response
off of yes, a PDA rate discount.

Bull shoulder block, but it trades out
to a daily bearish or block, but it

trades up into that bear shorter block.

Once it gets into the premium range, that
also gives us a high probability target.

Now, yes, it's one shot, one kill
scenario, and we're trying to trade

the weekly range, but one shot, one
kill is not defined by getting in on

a Monday and getting out on a Friday.

One shot, one kill is a couple of days
of trading and short-term trading.

It can be as little as one day.

And as long as a week.

And finally, when we look at the
range in the middle, uh, this

can be the areas of where you're
going to get chopped up the most.

Um, because if you're looking at
a range incorrectly, uh, if you've

already defined the range and you're
looking at PDR, Ray of premium and

discount that have already been traded
to Lawrence, if you look at a down

candle in a discount market, normally.

That may be a bullet shorter block,
but if it's already been traded to the

likelihood of it being a bullshitter
block with high probability falls off,

because it's already been used, we want
to use a new PD array in a discount

or premium market that has not been
traded to because the algorithm knows

the price has been there once before.

So it's going to seek new liquidity
and expand to allow the banks to take

participation in a move higher or.

So looking at the range like this, as
we defined it, if you're trading in

the middle of the range like this, and
you're not strong in your directional

bias or where the market may reach
for next and onwards, understanding

where open float is, where's the
buy stops and the sell stops.

If you're not really strong with that, if
you're trading in this range here, you're

going to get chopped up a lot over time.

You'll learn how to better approach
these specific premium discount ranges.

When you look at the outer rim, when
we were just showing the previous

slide, the higher you can get up
in the overall consolidation in

a premium market, the better your
short positions are going to be.

And the easier it's going to be
to reach for a profitable discount

PDR array, the lower you are in the
total consolidation, the better your

discount long entries are going to be.

And it's easier for you to get
to a profitable premium PDRs.

Blending the two time and price
working in a range environment.

Like this gives you context and you
can find very easy, low resistance

liquidity runs between one PD
array to another and understanding

the element of time and price.