All language subtitles for 5. S_D Flip Zones

okay so hopefully you should now be starting to get quite familiar with the

supply and demand concepts that we have looked at so far so let's do a quick you

know two-minute crash course on supply and demand right so typically with

demand we have kind of two ways that we look for it we either have a range

created demand where price is stuck within a range we then see that rapid

breakout to the upside and as price initiates

to the upside and we can clearly see that somewhere within that range demand

then step into the market or we have pivot created demand where we

essentially see a sharp sell before the buy as price and rapidly expands to the

upside in both cases creating um demand where of course you know we can overdraw

the zones from there um and we would look for price to either return to those

zones to then look for buyers to catch that next polish leg and so on with the

pivot created demand there however if you were to draw on you know with all of

those demand zones within the market they're pretty much going to be

everywhere because as we know price is constantly causing imbalances

between supply and demand um otherwise the market would never really move

anywhere right it would just stay in a range pretty much for

eternity so what was the main thing that we've looked at so far

to essentially validate uh where we're going to see those strong demand zones

well the main thing that we've looked at is those structural zones right so we

want to see where demand stepped in to cause a break of structure so in terms

of continuation let's say we're in a british market and

price is creating a series of higher highs higher lows and then higher highs

right so it caused a break of structure we're trying to then identify where did

that demand step in around here that led to the bullish move to cause that higher

high to cause that break of structure right so we'd look for a zone somewhere

within here and then that then validates that this area of demand whether it's

range created pivot created a single candle or fractal refinement whatever

we're just trying to use that break of structure to to increase the probability

that this is a strong zone so that when price returns it will hold and it will

give us a sustained leg for us to try and buy and ride that next bullish leg

to the upside right uh and then the same for a reversal so if price was making

lower lows and lower highs in a bearish market but then suddenly uh price makes

a higher high right so we get that breaker structure to the upside we take

out that lower high to form a higher high we then look for where did that

demand step into the market that then helps us validate this potentially is a

strong zone because it caused a break of structure takes a lot of money to do

that right so then when price returns to that area of demand we can then hope

that that zone will hold for us to capsize on that next bullish leg and

then very quickly we have the same for supply right so price would be in the

range it would initiate out that range to the downside that would then give us

our range created supply where we would then look for price to pull back and

potentially make another bearish leg or we would have the the buy before the

sale right pivot created supply and again we would hope that when price

returns to it it will continue but we don't just want to trade any old supply

zone that we see in the market we want to look for what ones that cause breaks

of structure so for a continuation that would be in a bearish market where

prices making lower lows and lower highs and a lower low so it obviously caused a

break of structure to to form that lower low so then we want to look at whether

that supply step in the market right to form that lower high and then that's

where we can look for price to then potentially continue that bearish leg

and then again over a reversal if we're in a bullish market with price creating

higher highs and higher lows and then price then formed a lower low right

causing that break of stretches the downside causing that first initial

change of character we would then try and anticipate where that supply stepped

in the market and then look to sell from this area here right because those areas

of supply caused the break of structure and the same for demand so that's kind

of the the first out of two ways right that we've really looked to try and

validate where those strong zones are in the market right all those things being

equal we're trying to identify those areas of supply and demand that led to a

break of structure so as you guys probably know from the the

title of this video and from what we've already mentioned

in some of the earlier theory videos the second main way we look at is what is

called a flip zone so let's just slowly go through this now so

this first example here of the supply and obviously the demand this is pretty

much just what we've gone through so this is our standard sort of structural

zone scenario that we look at so in the first case with supply

what do we have we have price uh moving to the upside right in a bullish

market with a higher high pulls back to form a higher low and then makes a

higher high but then what happens price falls down to make a lower low so we get

that change of character right we get that breaker stretches the downside the

change of character is just the first time we see that lower low right after a

bullish market and then essentially that creates an area of supply where we wait

for price to pull back in and then anywhere within that supply zone we can

look to get short with our stops somewhere above the high to try and

capitalize on that next bearish leg so this red box um obviously represents the

supply zone now i've just drawn it on the most unrefined way so just taking

the entire range taking the entire right the by just drawing the supply and on

that range right the entire buy before the cell that leads to that change of

character so that's the most unrefined way but of course we could look we're

trying to identify to the pivot right or potentially even a single candle or

potentially even you know refine it to a fractal wick or or so on and so forth

right um it's a you know it doesn't matter so

much now i just want you to understand why i've drawn the box that way but this

is just kind of that standard structural zone

entry model that we've been looking at right

where does that supply lead to that break of structure and whether it's a

continuation or in this case you know that that first initial change of

character then we can look to sell from the supply that led to that break

of structure and then the exact same thing for demand right um we're just

looking for where did demand step in to cause that break of structure to the

upside and in this case i've just drawn it on the entire range right the last

cell before the buy and then we look to buy it anywhere within that range but of

course we can then uh refine that zone if i can get my

mouse to grab it for me i'll have to play around with that right it's either

down to the pivot one candle fractal refinement so on and so forth right we

know the more refined we get the more we can increase our risk toward right

because we can enter in lower but potentially we may get missed right so

that's essentially just our standard entry model that we've looked at so far

now the next thing that we can start to introduce um is obviously flip zones to

increase um the probability or

just another way right of validating what may potentially be a strong zone so

in this case in its most simplest form all we are looking at is where supply

and demand are interacting where they essentially meet they have a bit of a

battle and then one of them essentially

overpowers the other one and takes control so we're not just you know

before we've only been looking at you know what causes the break of structure

but now we're looking at where does supply end up taking out demand and

where does demand end up taking out supply

so again just to make that clear before we've purely just been looking at

what causes breaks of structure right we've just been looking at what leads to

breaks in market structure but now we're looking at what leads to

uh taking out demand you know where is the supply that took out demand and

where is the demand that took out supply okay so let's look at this first case

so in this case all right prices make it higher high higher lows higher high

right so obviously for price to make that higher high what did it do it

caused a breakage structure of this height so somewhere within this leg

demand stepped in to cause that higher high

so that's what's denoted by this red box we have some demand

so at this point right in the market obviously we can't see anything else

just have to imagine that's not there but as price is pulling back into our

demand zone all those things considered what would

we expect well we would expect the continuation of that bullish order flow

rate we would expect this demand zone here to continue price upwards to make a

higher high right it needs to break this high here get a break of structure and

make a higher high because that is what this demand zone's job is it's simple

job is for price to create a higher high to fulfill those buy orders and then

overpower supply to make a higher high but we will often see in the market

his price will come in it will fill those buy orders it will then attempt to

make a higher high right so we'll have a reaction

but it will fail to make a higher high so it will fail to break this uh high

here and then what will happen is price will then come down

it will take out where that reaction formed the start of their actions that

is what fr stands for a failed reaction all right so as soon as price goes below

that dotted line right as soon as that happens the reaction has now failed

which means demand has failed to do its job right so the minute we are below

that dotted line literally the very micro pip that price

moves below uh where that initial reaction started

where demand kicked in to try to make the higher high if it doesn't take out

this high here and it fails to do its job and price starts to come back down

the minute we break below that reaction means we get a failed reaction right so

that means that demand is now failing and then price down moves down lower we

actually then take out the low so this is where we get the change of character

which is essentially what we're looking over here so now what do we have we have

demand failing right and we also have a market structural low being taken

so what that means is a lot of supply has stepped in somewhere to take out

demand and to take out the structural low right so you can see here all we

looked at was the structural logo whereas over here we have more

confidence because we not only do we have structure being taken out but we

actually have that demand being taken out okay

so then when price moves down and we have the failed reaction and we have the

change of character we have that structural load going somewhere up here

supply stepped in so where do we draw that supply zone just delete this in a

minute right basically anywhere within that buy right where the reaction

started that buy before the cell that is our supply zone okay so the

reason why i've drawn it with a what looks like a bit of a weird box you guys

might not have seen that at this stage it's just something that i use

this tool here because essentially this box just represents supply but it's

a nice tool to use because it has a line in the equilibrium right that 50 level

the eq and what do we know we haven't talked about entries in a lot of depth

but we can enter anywhere within the zone but one of the things that we can

do is we can always look to enter on the eq just to increase our risk toward okay

so don't worry massively about this at the

minute right i've spoken a little bit about it a little bit of depth before

but you know the main point for now i want you guys to just concentrate on is

that we can enter anywhere within the zone okay so don't worry too much about

how this box is drawn and we'll talk about this in a little more detail but

essentially it's just using um this fib tool here i'll just show you where it's

drawn actually now let's see which one it is that i use i believe it

would be one of the favorite ones so it's not in here

okay so it's a parallel channel is the one that i'm using in this one on the

left hand side so in the trend lines if you say parallel channel and i'll just

show you the settings on that so how the way you draw this is you would click at

the base of the candle wherever you wanted to draw it right and then you

would hold it across if you hold shift it will draw a straight line right we

want to have it nice and accurate nice straight line and then you click again

and then if you move it up to basically the height of the range that you want to

draw it and then boom there you have your supply zone but the reason why it's

useful is just because it gives that nice equilibrium level if you want to

enter in the middle of the zone and if i just show you the settings

for that essentially that's how i've got it if you want to copy uh that template

but for now i said all i want you to focus on is

that this essentially just is another way of drawing a supply zone okay

so yeah and that's it this is basically the highest probability way that we have

of looking for supply and demand and essentially

it's just a flip plus a chalk that's the most simple way i can describe it okay

and all that means is that we have demand and then it flips to supply

because supply is now in control and it also causes that change of character so

that's why it's called a flip and a chalk so here all we have is a chock

because we've just been looking at market structure being taken out right

and then we look for what caused that change of character what caused that

break of the the higher the low and then we look for price to come back into it

right but here we do have the exact same thing

we have the chalk but before the chalk what happens well we see that battle

between supply and demand and that's what key the key thing that you need to

see here is you need to see this reaction occur because you need to see

the battle occurring if the battle doesn't occur then we're not as

interested right what we want to see is this happen because what it means is

that demand tried to hold and it tried to make the higher high but the fact

that that reaction then failed and came down you have to think about what does

that mean in reality but what it means is that this supplier must be really

strong because this demand was significant right because if price

like here right it just goes up and it just melts straight down yes it did take

out a strong low right because that low should hold and it should make a higher

high but if price is coming straight down

maybe actually there wasn't that much that there wasn't that much demand in

this overall area so when supply comes down here maybe this means that this red

supply zone actually isn't that strong and then sometimes what can happen is

price can come back in you can get short and it can keep going up

so remember the whole point of this whole game we're playing is we're just

trying to validate supply and demand zones to try and see

which ones are strong and which ones are going to hold right so part of that is

finding our supply zone and going what did this supply zone achieve

did this supply zone achieve any anything significant

so in this case with the standard entry we've been looking at in structural

zones instead of just drawing on any old supply zone right where price initiated

out of a range or a pivot what we look for is what are the ones that cause

breaks of structure right because that is something significant in the market

so we hope then that when price returns it was a lot of supply that had to step

in to take out that low therefore this supply zone should hold and we should

see that next leg down this is the same concept instead of just

taking out a structural low it also had a battle with demand where actually this

demand you know there was a lot of buy orders in here and it did try to do it

short it tried to take out this high and make a higher high so then when supply

steps in and overpowers it and it flips to supply that's in control

that's just another sort of tick in the box to try and tell us that actually it

did take a lot of supply in the market to you know eradicate all of these buy

orders to overpower demand here and cause that break of market structure

okay so that's what you're always trying to ask yourself is what did this supply

zone achieve is it strong yes it is because it took out a strong level of

demand you can see that demand tried to hold and it took out a structural low so

that's like two ticks two ticks in the box right compared to over here where it

was just kind of one tick in the box right if that makes sense

so yeah let me try keep it super simple

again so we have price making higher highs and high lows price pulls back

into demand it tries to do its job it tries to make a higher high it fails to

take out this high so it fails to make a higher high then as soon as price comes

down at this point here as soon as we move below that dotted line below where

the reaction initiated from that means the reaction has now failed it's failed

to do its job but then when price goes even further and it takes out the actual

structural low and we get that change of character

we now have both of those you know those criteria ticked off the

box right so then we can then mark out that by to cell range we can take the

whole range like this we can just like any old supply zone right we can refine

it to the last pivot we could refine it to a single candle

right within that pullback or we could even you know do the fractal refinement

so on and so forth right the same rules always apply but for the sake of the

example i'm just going to keep it to the whole range right just to show you that

you can get short anywhere within that range right it's all valid anywhere

within that range but the more refined you are right morris reward but more

increased probability of missing the trade okay

and that is how we look to get short so that's essentially your flip and your

truck looking for that battle between buyers and sellers looking for the

breaker structure and then that's our area of supply that we can then look to

get short from and then the exact same thing with demand right

in this case it's a change of character surprises making lower lows lower high

and a lower low so for price to cause that lower low to break that structure

there right we look for the supply that caused price to make that lower low so

then what is the blind expectation when price comes back to the supply zone well

we would expect price to pull back into it and then for supply to do its job it

should make a lower low right it should cause this load to be taken out it

should cause a break of structure and it should cause a lower low if supply is to

do its job but in this case it tries to do its job but then somewhere within

here demand steps in to then cause the reaction to fail right as soon as we're

above that dotted line where the reaction initiated from right this

circle here as soon as we're above it now you know that the reaction failed

and then price continues to go up so now we also have structure failing right the

bearish structure is failing so we now have bullish structure we also have a

failed reaction so what that means is we now have a strong area of demand because

not only did it overpower supply but it also caused structure to fail and we got

that higher high so exact same thing again right as we looked up here but the

opposite so then we can mark out this whole cell before the buy range as our

area of demand or of course we can refine it you know to a pivot to a

single candle or a fractal refinement um yeah so on and so forth and that's it

really so before right like i said again we're

just gonna keep going over this and just hammering it in right until we really

just drill this into our subconscious but all we looked at before this lesson

so far was essentially you know your standard break of structure right in

this case obviously it's reversal but it works the same for a continuation we're

just looking for where does supply cause a lower low right

it caused a break of structure we look for price to come back in and then we

look to sell because we hope that it was strong enough because it caused that

brake structure same as demand right it took out a lower high to form a higher

high so that's one way of validating a strong level here we have the exact same

it does cause that change of character but it also takes out demand

now how do we know you know

what again the thing that's really important about this

and it can be quite subtle in the live market is you need to see the reaction

for it to be a flip because if price just does this right it comes up yes it

creates demand to make a higher high but if price just comes straight down right

just in pretty much a straight line like multiple candles that just come down and

you don't see any reaction then that is not a flip

because there is no you know you need to see that battle you need to see that

reaction and the reason why you want to see that reaction is what i was saying

earlier is because you want to know that actually this demand was somewhat

significant that there was strong buying pressure in here that price did try to

make a higher high but then the supply stepped in to smash through okay and

that is the subtle but key difference right so your flip plus your chalk this

really is kind of your a plus setup in terms of

your execution entry in terms of wanting to see not only the reaction failing

right so seeing the supply to demand flip in this case but also that it leads

to that change of character that leads to a break of structure at the same time

right because that is essentially your structural zone and your flip zone

combined together so then when price comes back within here that is a very

high probability zone okay now the final one we're going to

look at is a bit more aggressive all right so this is your a plus setup

this is the best this is a bit more aggressive because we only have the flip

so you can see here this is only a flip this is only a shock right but this is

obviously both of them okay pretty simple stuff

um so what's the subtle difference here because sometimes this can be a little

bit tricky to see in the live market the difference between them but it's very

it's very very similar so we have price creating a higher high pulls back to

form a higher low then we make a higher high so obviously to cause that breaker

structure to the upside to form that higher high right we must most likely

have a demand zone that caused a higher high so then when price comes back in

it if demand is going to do its job what

should it do it should form a higher high it should take out this high but if

price goes up higher you see the reaction happen remember seeing the

reaction is so key you need to see price trying to make that higher high so that

it validates that there is an area of demand here so as price goes up higher

and then as soon as it comes down and as soon as it's below that dotted line

right below where the initial reaction essentially originated from where that

reaction initiated from as soon as price comes below it as long as price never

took out that high right so it didn't do its job the minute we are below that

dotted line you now know that the reaction has

failed okay so what that means is just like before

this whole area this buy before the cell once we go below that failed reaction

this whole area denoted by the box is your area of supply that took out demand

okay so what you can see in the difference

here is price doesn't cause a change of character yet right so it's still

technically within the demand zone right if i draw the the zone across it's still

within here right so you there could be still some

demand orders lower in the zone that now could be filled and it could go up now

right there could be this is the risk of this setup there could be some nice buy

orders left within here right that wasn't initially tapped into from that

first initial reaction and this is the risk because you could be looking to get

short but price price could go up higher from here okay because what we don't

have the change of character we don't have uh that entire supply zone failing

right like we did over here before price comes

back in for you to short so this is why this is riskier because you only have

the flip you only have the failed reaction you don't have the change of

character to truly truly give you that extra confirmation that price has taken

out the entire supply zone and then we come back in and we go okay

so hopefully it's a bit kind of you know you can see why this is riskier because

you're you're trying to get short and there's the potential that price

could fill some orders within here and it could go up higher okay so obviously

again this will come with testing what makes most sense to you and just

time in the market for whether you are happy to take just flips or if you want

to see a flip and a change of character right you want to see that broken

structure as well so you know the obvious advice i can give you guys

is as especially as you're starting out only focus on the flip with the change

of character so stay away from just flips at the start because they are much

lower probability they are a lot more aggressive right because you're getting

in where price could just go higher it could fill up some orders within here

and go so you may take more losses now as you get more experienced and you're

good at picking higher time frame areas of value and you're good at putting all

of the confluence together then you can get a bit more aggressive and

potentially look at flips on their own if you want to because sometimes what

will happen is just this exact sample here where we'll get the failed reaction

price will come back in you may go okay i don't want to get short from here i

want to wait for the change of character first and then price can just go right

and then it doesn't always come back up to this level and you may have to look

for entries further down which obviously isn't always ideal so you may not get an

entry that's okay you don't have to enter every move remember but just

sometimes you will miss the move right from the level that you may want to get

into if you wait for this extra confidence such as something that you

know you like again right you're gonna have to just get this with time and what

you are comfortable with so yeah that pretty much wraps it up in

terms of kind of the flip zones

this is obviously what we've been looking at so far just a very clear

structural zone we're just looking at where supply demand led to a breakage

structure to try and validate the zone this is the exact same thing

except we look for the battle between supply and demand first right that the

major key here is to see that reaction we want to see demand try to do its job

but then supply step in cause a reaction to fail and the change of character and

then we look to get short when price comes back into there same for demand

here we're only looking for the reaction to fail so that what that means in

reality right is the minute that price is below that dotted line below where

the reaction initiated right you can then draw your supply zone on right this

box here right and you can basically get ready to get to sell whether you put

your order or you wait for price to come in and you just sell it market

um but you're essentially getting short before we have the confirmation that

price has taken out the low so you're running the risk that price could fill

up some demand within here right lower in the zone and then it could be enough

to actually go that's why it is riskier okay so now what we're going to do is

we're just going to apply these flip zones

just to that uh price action model that you guys should be very very familiar

with now we'll quickly go over this and then um yeah then we'll hop onto the

charts in the next lesson and we'll do a full walkthrough just to see how the

theory actually applies uh in reality so what do we have here well let's just go

through this so we have the four hour chart with this thick line um clearly

bullish right so we are making a series of higher highs and higher lows so we

come up into this old supply zone right from previous price action price then

fills up that supply and it's enough to initiate a pullback so we get a swing

pullback and then price forms a higher low and it moves to the upside and we

get that break of structure right we get price forming a high high so what do we

look at before because price uh calls that high high and cause that

breaking structure that gives us that structural area of demand right so

that's just standard and that is what this is but the slight difference here

is that we understand that it's also a supply to demand flip which increases

the probability even more because not only did it cause a break of structure

what did it do it took out supply and the supply is valid because you can

see the reaction right it tried to do its job it tried to form a lower low but

what happened demand stepped in and caused price to fail because it didn't

let supply do its job remember a supply zone supply zone's job is to

try and form a lower low so if demand steps in before it can do that and

causes a higher high then we have both a break of structure and we have a failed

reaction we have supply flipping to demand demand is in control and that

increases the probability of the zone so this zone is a flip and a chuck right

so price continues its next swing leg it has a bit of a minor pullback and it

goes up higher and then we come into another four-hour zone right so this

could be a flip zone it you know it doesn't matter too much but price is in

here so now what do we expect well we expect there's a possibility that we

could now get a four-hour pullback right um into the discount of this zone and

potentially to come down and mitigate that extreme demand zone that extreme

flip zone so what can we do to

increase the probability that this pullback is starting and that we're not

going to get potentially short in a full signal because price could easily just

pull back right and it could keep going up higher well we can wait for a four

hour change of character to take out that four hour minor low right what is

that four hour change of character most likely right it's not guaranteed

but most likely going to be on a lower time frame say the m15 that four hour

minor low is most likely going to be a m15 swing low right so when price then

gives us that four hour change of character

that is most likely going to be an m15 break of swing structure to the downside

so we get a four-hour change of character which is most likely going to

be now the 15-minute right the blue line being in a bearish trend right and that

is when that gives us a lot of confirmation when this happens that

potentially now the m15 is bearish to initiate that four-hour pullback right

so that's not a full signal and that we don't go on to make higher highs

now what can else can we use to increase the probability uh

of this pullback occurring and for where we

could potentially look to short well we can look for m15 supply that comes into

the market so before we just looked at where did that supply cause that break

of the swing low right then we get that structural supply zone and that is where

we look to get short how can we increase that probability

even more well now we understand what flip zones are right so in this

four-hour leg up here where we had this four-hour minor pullback to then move to

continue the swing leg right up into that supply zone it's very likely that

that minor for our pullback if we were to jump down onto a 15-minute time frame

uh was a m15 demand zone right that caused an m15

higher high so when then price pulls back into that

demand zone we want to look for was there a reaction did demand try to do

its job did it try to form a higher high right as long as it doesn't take out

that high and it fails to make a higher high and then price comes down the

moment it breaks below that low there where the

reaction initiates from right so we go below the dotted line we get that failed

reaction we now know that it slightly supplies in control and this demand zone

is failing but if we also get the change of character at the same time now we

have a flip and a chalk right so that's now our a plus setup so then we can look

for price to come back into the supply zone that not only caused a structural

load to break but also closed uh cause significant demand to fail we now have

that chalk and that flip that demand to supply flip right and now this is a high

probability m15 zone to play the m15 bearish trend short

to play that four hour pullback right and that is you know how we can validate

those zones even more to play that and increase the probability that this will

go and that it's not a full signal and we're not going to get stopped out if

price was to continue higher okay so hopefully that makes sense then

obviously price then has a deeper four-hour pullback into the discount of

the leg down in towards our four-hour flip zone

because remember this demand did what it took out the supply zone right it had

the reaction and then demand stepped in to take out that reaction and cause that

break of structure so now we know this is extremely for our uh strong for our

zone so we could get long here but maybe you know we're not sure i mean we want

to wait for a little bit more confirmation that the four hour higher

low is in place so what can we wait for well before what we looked at

is purely just a market structure break so we wanted to see the m15 make that

first higher high right after a series of lower highs so we wanted to see that

change of character right which is then what we get over here

what else what also can we then increase our probability um

that you know that that four hour high low is in place and the m15 is switching

bullish where we would look for that demand zone to be created right and we

would look for the demand that led to that change of character that led to

that breaking structure that led to that higher high right and that would give us

a strong demand zone now also do we know right that can

increase the probability of that being a strong zone well we look for one that

also took out supply so how do we know that it took out a

significant supply zone but we need to see that reaction first right we need to

see that battle and that is really key so when price pulls back up into the

supply zone right this m15 should be a strong supply zone because it caused the

break of this low right to form that lower low so now we have a structural

supply zone right here price comes into that supply zone it

tries to do its job it tries to make a lower low but it fails to take out that

low right it fails to do its job and then demand steps in to not only cause

the reaction to fail because remember the minute we are above the reaction

right we don't need the change of character we just need to go break above

where that reaction initiated from as soon as we're above it above that dotted

line we now know it's very likely that that supply is going to fail

it's not confirmed until we break above the zone but we know once the reaction

goes it's very likely that it will fail right and then if we also get a change

of character then we know this is a very strong demand zone because it took out

strong supply and it took out structure it caused that break of structure to the

upside so now we have a flip and a chalk with the zone and that is a very high

probability zone so what we can do is wait for the m15 to pull back to get an

m15 high low and we could just buy straight away there on the m15 zone and

that is more than valid but maybe we want to wait for a little bit more even

more confirmation or even more refinement so we can drop down to a

lower time frame to confirm that this zone is going to hold and we are going

to get an m15 high low in this area so let's say we jump down to one time frame

right exact exact same thing i'm not going to be as pedantic this time i'm

just going to explain this one quickly right we obviously have supply making

lower lows and lower highs it must have created supply to take out that low so

the price pulls back up into the supply if that bearish trend is continue what

should happen it should form a lower low price then fails to do so demand steps

in and it takes out the reaction right so we get the failed reaction but we

also get the change of character so not only has price taken that's a

strong supply but it has also taken up structure to form a higher high so now

we have done is validated a very strong m1 demand zone for us to then buy right

from this area which has confirmed the m15 high low and that m15 high low did

what it confirmed potentially we have the four hour high low so then when we

buy in this area we have an extremely strong high probability swing trade

right with lower time frame precision to now target this weak four-hour high

because it failed to do its job right now let's say that price does actually

go on to make that higher high you have to think about that whole cycle has now

restarted because what has happened from this area of supply here well it's tried

to do its job right it initiated that pullback but its job isn't just to start

a pullback supply wants to try and create a lower low right but for it to

do that that supply zone needs to lead to a break of structure that is slow

here right this supply zone up here needs to try and take out this low but

all that's happened is it's pulled back right and then price has gone on and

it's taken out that reaction right to cause not only a break of structure but

also a failed reaction of this supply zone here so then what would happen when

we would later on is somewhere around here we would try and identify

where that four hour zone was right that led to that break of structure that led

to that zone being taken out and then we can do the exact same process over and

over again right dropping down through the time frames looking for that flip

zone right takes out supply here reacts change of character demand flip all

right draw on the demand price comes in and we get long target the high so on

and yeah so forth so that wraps up the theory um

hopefully it starts to make a little bit sense you can watch this as many times

as you need to um you know recreate these diagrams as well something i'd

always highly recommend that goes for all of the ones that we've looked at so

far on the course you know i've obviously provided um

you know the screenshots of these annotations below each video but i would

really recommend doing the exercise of making your own ones drawing them out

because just the process of doing it will really kind of help to yeah just to

put it deep in your subconscious and help you identify where there may be any

subtle gaps in your knowledge thus far but anyway i'll leave that there in the

next video we're going to hop on the charts and obviously take a look at how

this plays in reality because of course we're not always going to get these nice

perfect utopian examples but price moves really slowly um and we don't get any

full signals right of course it's going to be a little bit trickier in the live

market but yeah let's take our time on the markets

and we'll give it a go and see if we can identify those but

what i will actually say just before hitting this is if you guys feel a bit

confident is have a quick uh go on the charts now whatever currency pay you've

been using thus far with all of the exercises to draw on your zones

obviously you should now have your structural zones drawn on just go over

and have a play and see if you can identify

where these flips are happening so look at old supply zones and look at

where demand took them out and see how they react does it make those demand

zones hold even stronger um yeah and obviously look at where you know demand

takes out supply sorry where supply takes a demand um yeah and so on and so

forth because then when i go back through them when you're a dollar um

yeah it will just uh you know make the exercise even more useful if you do it

before i go through and then you can see how

yeah my thought processes as we go through it together but yeah i'll leave

that there have a go with it and see how you get on

all right