ICT MATERIAL REFERENCE
Version 1.09 January 06, 2013
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TABLE OF CONTENTS
PSYCHOLOGY ICT TRADING PLAN TOP DOWN ANALYSIS (BIAS AND DIRECTION) DETAILED DET AILED TOP DOWN DO WN ANALYSIS ANALYSIS RULES R ULES UNDERSTANDING UNDERST ANDING COMMITMENT OF TRADERS (COT) MARKET PROFILES SUPPORT / RESISTANCE AREAS AREAS OF CONFLUENCE FIBONACCI OTE PATTERNS SESSION TRADING PRICE ACTION HIGH PROBABILITY PRICE PATTERNS TRADING SWINGS ICT TRADING CONCEPTS ICT TRADING METHODS INSIDERS TRADING METHODS PROFESSIONALS USE OF INDICATORS MISC VIDEO NOTES TRADE RULES RISK MANAGEMENT TRADING INSIDE THE RANGE PETER’S ICT VIDEO NOTES ICT TERMS AND ABBREVIATIONS TIONS
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TABLE OF CONTENTS
PSYCHOLOGY ICT TRADING PLAN TOP DOWN ANALYSIS (BIAS AND DIRECTION) DETAILED DET AILED TOP DOWN DO WN ANALYSIS ANALYSIS RULES R ULES UNDERSTANDING UNDERST ANDING COMMITMENT OF TRADERS (COT) MARKET PROFILES SUPPORT / RESISTANCE AREAS AREAS OF CONFLUENCE FIBONACCI OTE PATTERNS SESSION TRADING PRICE ACTION HIGH PROBABILITY PRICE PATTERNS TRADING SWINGS ICT TRADING CONCEPTS ICT TRADING METHODS INSIDERS TRADING METHODS PROFESSIONALS USE OF INDICATORS MISC VIDEO NOTES TRADE RULES RISK MANAGEMENT TRADING INSIDE THE RANGE PETER’S ICT VIDEO NOTES ICT TERMS AND ABBREVIATIONS TIONS
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PSYCHOLOGY Below is basi !sy"olo#y a $ra%er nee%s $o un%ers$an% be&ore be#innin# $o $ra%e' Ensure $"e &ollowin# one!$s are un%ers$oo% an% !lanne% ou$ be&ore $ra%in#( 1' )n%ers$an% $"e asse$ lass you are $ra%in# $ra%in# *i'e' %on+$ %on+$ &ollow 20 !airs !airs a$ one 2' T"in- in%e!en%en$ly in%e!en%en$ly an% use your own analysis analysis *$urn o&& $"e T. T. an% ru/or si$es 3' eelo! an% a%"ere $o $o your !ersonal !ersonal $ra%e !ro&ile an% o/!ressie $ra%e !lan ' )$ilie an% an% e4erise e4erise i/!eable i/!eable e5ui$y /ana#e/en$ /ana#e/en$ *11'78 *11'78 ris- !er $ra%e &or new, 28 &or e4!' 7' on+$ assu/e assu/e $o -now w"ere !rie will #o *i'e' no !re%i$ions, !re%i$ions, se$u! your $ra%es !er your analysis in an$ii!a$ion IF $"e /ar-e$ /oes in your %ire$ion 6' T"in- in $er/s $er/s o& !robabili$y !robabili$y an% no$ absolu$es, $"ere are are no absolu$es absolu$es in $ra%in# Trade like a Sniper Tra%ers w"o learn $o !i- an% "oose $"eir $ra%es li-e a Fore4 9sni!er: are $y!ially $"e ones w"o suee%' suee%' Tra%ers w"o &ail a$ a$ li-e /a"ine#uns by s"oo$in# a$ eery$"in# $"ey see *oer$ra%in# an%;or $en% $o run ou$ o& a//o */oney ery 5ui-ly' 1' Less Less is Mo More re ○
a$i >a$ien ene e ○ Mos$ be#innin# $ra%ers lose /oney in $"e /ar-e$s, an% /os$ be#innin# $ra%ers $ra%ers are also also any$"in# B)T !a$ien$' 3
○ For be#inner $ra%ers, &i#"$ $"e $en%eny $o /a-e yoursel& $ra%e beause you "ae $"e i%ea $"a$ $ra%in# will earn you /oney' ?nly s/ar$ $ra%in# wi$" a !lan an /a-e you /oney' ○
ICT TRADING PLAN Eery ni#"$ a$ Mi%ni#"$ *New or- I alula$e new %ay >io$ >oin$s &or $"e Cable *B>;) an% !os$ $"e/ on /y "ar$s' I $"en no$e -ey su!!or$ an% resis$ane leels &ro/ Mon$"ly "ar$s %own $o &ie /inu$e "ar$s' I %e$er/ine /y $ra%e bias &or $"e new session an% w"ile I %o loo- &or $ra%es in $"is %ire$ion, ID/ no$ /arrie% $o $"e no$ion $"e /ar-e$ /us$ ben% $o /y e4!e$e% %ire$ion''' I a/ &le4ible' T"e /ar-e$ is always ri#"$ an% I an ae!$ bein# wron# eery %ay as lon# as I an be willin# $o "an#e /y bias base% on urren$ !rie a$ion' I& we are $ra%in# in $"e >io$ leels aboe $"e Cen$ral >io$ leel''' I %e/an% a lo$ &or buys' I%eally I &ous on $ra%es $"a$ s"ow a s"or$ $er/ oerbou#"$ on%i$ion an% !rie in $"e area a$ or aboe R1 or R2 &or s"or$s' T"is is een /ore !ower&ul i& $"e !reious %ay+s "i#" is sli#"$ly below $"e R1 or R2 leel' In o$"er wor%s, I loo- &or &alse brea-ou$s aboe !reious %ay+s "i#"s a$ R1 an% or R2 leels' I use s$o!s an% li/i$s $o #e$ /e in a$ $"e leels an% use a 30 !i! s$o! or less ini$ially' As $"e $ra%e /a-es $"e s!rea% u! an% /oes in /y &aor, I loo- $o re%ue $"e ris- an% $i#"$en $"e s$o!' My e4i$s are !re%e$er/ine% an% an be a$ /ar-e$ i& $"in#s #e$ "airy' I use an%le &or/a$ions an% basi "ar$ !a$$erns $o %e$er/ine low ris- $ra%es an% $ar#e$s are $y!ially 2730 !i!s be&ore salin# ou$ so/e o& $"e !osi$ion' I #enerally $ry $o "ol% &or $"e aera#e %aily ran#e in !i!s be&ore e4i$in# &or $"e re/ainin# !or$ion' T"e reerse an be sai% &or buys' I li-e s"or$ $er/ oersol% on%i$ions an% !rie in $"e 1 an% or 2 leels un%er $"e Cen$ral >io$' I li-e buyin# !reious %ay+s low or a &alse brea- un%er $"is leel #ien $"e on%i$ions warran$ a boune' I li-e $ra%in# a$ $"e &i#ure, $"e /ar-e$s li-e roun% nu/bers an% o!$ions #e$
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$ri!!e% a$ $"ese !oin$s so $"ey are an easy $ra%e /ul$i!le $i/es !er /on$"' ou an $ra%e &or a liin# @us$ %oin# $"a$ as a /e$"o%, new $ra%ers o "ere is w"a$ I will be %oin# $"is wee-( I will s"or$ !reious %ay+s "i#"s an% buy !reious %ayDs lows' I& I #e$ s$o!!e% ou$ an% $"e /ar-e$ &in%s su!!or$ aboe $"e !reious %ay+s low, I will buy' I& $"e /ar-e$ &in%s resis$ane a$ $"e !reious %ay+s "i#" a&$er bein# !ene$ra$e% I will s"or$ i$' I $a-e $wo $ra%es !er %ay /a4, i& I win on $"e &irs$ I lose s"o! an% ban- $"e wins' I& I lose on $"e &irs$ I $ry $o a!$ure $"e $ra%e as %esribe% aboe''' i& i$ loses $oo, I lose s"o!' No e/o$ions, no /uss no &uss' I& a >io$ leel &in%s i$sel& a$ $"e Fi#ure, say Cable 1'71, I will loo- $o buy i$ a$ $"a$ !oin$ i& !rie "as $ra%e% %own $o i$ an% onersely &or !rie $ra%in# u! $o i$' I @us$ &oun% $"e Mee$>i!s'o/ si$e an% rea$e% an aoun$' I will %o /y bes$ $o "i#"li#"$ $ra%es wi$" $"is as i$ a!!aren$ly #ies real $i/e or lose $o i$ $ra-in#G
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TOP DOWN ANALYSIS (BIAS AND DIRECTION) 1' T"e Basi To! own Analysis( a' $u%y ) ollar In%e4 &or #eneral /ar-e$ %ire$ion b' Re&er $o $"e C?T re!or$ an% no$e $"e Co//erial Tra%erDs ne$ !osi$ion ' Consi%er $"e Co//erial Tra%ers as $"e H/ar$ MoneyH $"us $ry $o !osi$ion li-e $ra%es %' Re&er $o an% /oni$or %aily $"e 2, 7, 10, an% 30 year no$e line "ar$ oerlay e' ?n $"e Treasury No$e oerlay, loo- &or &ailure swin#s $o !roi%e lues $o $"e &u$ure %ire$ion o& $"e ) ollar &' I& $"e yiel%s are %ro!!in# an% one o& $"e $"ree yiel%s &ail $o /a-e a lower low, loo- &or ) ollar $o boune #' I& yiel%s are risin# an% one o& $"e $"ree yiel%s &ails $o /a-e a "i#"er "i#", loo- &or ) ollar $o sli%e lower "' A bullis" ) ollar $ransla$es $o lower &orei#n urrenies i' A bearis" ) ollar $ransla$es $o "i#"er &orei#n urrenies @' Loo- a$ $"e /on$"ly, wee-ly, an% %aily "ar$s o& $"e urreny !airs $ra%e%, no$in# -ey su!!or$ an% resis$ane leels -' e$er/ine $"e /ar-e$ &low on $"e %aily, "our, an% 1"our "ar$s ia swin# "i#"s an% lows l' Try $o $ra%e in line wi$" $"e lon# $er/ *$o! %own %ire$ional bias an% w"en $"e "our /ar-e$ &low is in syn' T"is will &il$er /any &alse si#nals an% assis$ us in "i#" !robabili$y $ra%e se$u!s /' <"en $"ere is no lear %e&inable %ire$ion, re/ain &la$ an% si%eline% un$il $"ere is a lear bias 3' Mar-e$ Bias a' Bias is %e$er/ine% by swin#s, use &ra$als $o "el! 5ui-ly an% isually i%en$i&y swin# areas on $"e %aily, "r, 1"r b' A /us$ $ra%e below $"a$ low &ra$al $o $"e %ownsi%e &or /ar-e$ &low $o be onsi%ere% s"or$ %' I& !rie %oes no$ $ra%e below $"e low &ra$al &or/e%, $"en !rie a$ion is lon# e' ?nly onsi%er &ra$als $o $"e i//e%ia$e le&$ o& $"e !rie a$ion, !rior &ra$als are no lon#er ali% ' =i#"er Ti/e Fra/e Analysis #
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=i#"er Ti/e Fra/e $o Lower i' Mon$"ly C"ar$ I%en$i&y -ey R leels an% %ire$ion ii'
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T"e >oun% $y!ially &or/s a bo$$o/ in early Mar" an% $"en /oes "i#"er in$o $"e en% o& A!ril' 2' Early May $o /i%May is usually a bearis" $i/e' 3' A bo$$o/ $y!ially &or/s a#ain in /i%May we see a /oe "i#"er in$o early Au#us$' ' >rie usually !ea- early in Au#us$ an% %eline in$o /i%e!$e/ber' 7' >rie !ea-s in early Noe/ber an% $"e !rie sli%es in$o /i%$ola$e Noe/ber' 6' >ries bo$$o/ in la$e Noe/ber an% rally in$o $"e en% o& $"e year' DETAILED TOP DOWN ANALYSIS RULES 1. Long Term Analysis Use US! " #eneral marke$ dire%$ion a. )K is a /easure o& $"e alue o& $"e )'' %ollar rela$ie $o /a@ori$y o& i$s /os$ si#ni&ian$ $ra%in# !ar$ners' Bas-e$ in%e4 o& 6 urrenies *$"e euro, Ja!anese yen, Cana%ian %ollar, Bri$is" !oun%, we%is" -rona an% wiss &ran' &. Ris- ?&& Eniron/en$ I& ) In%e4 is !oise% $o #o "i#"er *la- o& ris- $olerane, &orei#n urrenies /ay see sellin# !ressure' E4a/!le( B>;) woul% /oe lower %. Ris- ?n Eniron/en$ I& ) In%e4 is !oise% $o #o lower *ris$olerane, &orei#n urrenies /ay see buyin# !ressure' E4a/!le( B>;) woul% /oe "i#"er '. COT (Commi$men$ o) Traders* a. Consi%er $"e Co//erial Tra%ers as $"e 9/ar$ Money:' E4a/ine a$ual !osi$ions o& $ra%ers an% $"e ne$ "an#e &ro/ !rior re!or$ *o//erials &. Loo- &or e4$re/e ne$ !osi$ions in $"e %a$a, warn o& /a@or $ren% "an#e %. Co//erial sen$i/en$ is on$rary $o o//erial a$ii$y *i'e' "e%#in# i. <"en sen$i/en$ is bearis" w"ile o//erial "e%#es "ol% lar#e ne$ lon#s, e4!e$ a rally $o un&ol% or $ren% "an#e lon# ii. <"en sen$i/en$ is bullis" w"ile o//erial "e%#es "ol% lar#e ne$ s"or$, e4!e$ siable %eline $o un&ol% in $"e /ar-e$ iii. <"en aboe is no$ in e&&e$, $ra%e $"e $ren% wi$" Lar#e 1'
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$ra%ers o//erials are "e%#ers on o$"er si%e o& !osi$ions, lar#e $ra%ers will "ae lar#es$ ne$ on a$ e4$re/e leels, loo- &or e4$re/es be$ween lar#e an% o//erial !osi$ions &or lue o& /ar-e$ "an#e Bond ,ield Analysis " T-No$e Analysis a. eb$ In$eres$ Ra$es i. Inreasin# in$eres$ ra$es, inrease% &orei#n urreny alue, %erease% loal urreny' ii. ereasin# in$eres$ ra$es, %erease% &orei#n urreny alue, inrease% loal urreny' &. Bon% iel% ier#ene Moni$or yiel%s o& 2, 7, 10, an% 30 year no$es' I%en$i&y %ier#ene o& one or /ore o& $"e yiel%s as a "ar$ oerlay'
As yiel%s /oe "i#"er *or lower a$ so/e !oin$, 1 will &or/ a &ailure si#n as one yiel% &ails $o !os$ "i#"er "i#"s or lower lows on $"e line "ar$, $"is is si#nal on&ir/a$ion $"a$ )K !oise% $o "an#e %ire$ion /arke$ Flo - Fra%$als a. win# =i#"s - I%eal se$u! is "ain# $wo lower "i#" an%les on ea" si%e o& $"e Fra$al =i#" an%le' Mos$ reen$ win# =i#" is $"e >io$ >oin$ an% /us$ be brea"e% $o $"e u!si%e be&ore Mar-e$ Flow $urns u!' &. win# Lows I%eal se$u! is "ain# $wo "i#"er low an%les on ea" si%e o& $"e Fra$al Low an%le' Mos$ reen$ win# Low is $"e >io$ >oin$ an% /us$ be brea"e% $o $"e %ownsi%e be&ore %.
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Mar-e$ Flow $urns %own'
?nly $"e /os$ reen$ win# =i#" ; Low are u$ilie% &or %e$er/inin# Mar-e$ Flow wi$" ol% win#s %isre#ar%e% d. T"ere is s$ron# a#ree/en$ o& Mar-e$ Flow i& aily, =our, an% 1 =our $i/e&ra/es are in line' Fous on =our Mar-e$ Flow &or onsis$eny' e. Fra$als by %e&ini$ion an be i%en$i&ie% &ro/ $"e "i#"er $i/e &ra/e on %own $o ea" lower $i/e &ra/e' ou s"oul% be able $o &in% an ?TE a$ ea" $i/e &ra/e %own $o $"e lower ones' *July 12 >ro Tra%ers Club 32(00 F2$2res Con$ra%$s a. Loo- a$ &u$ure on$ra$ losin# an% w"e$"er $"e lea% /on$" lose% "i#"er $"an 2n% /on$" *i'e' $"is /on$"+s on$ra$ lose% "i#"er $"an ne4$ /on$"+s on$ra$ &. Ba-war%a$ion w"en 2n% /on$" loses lower $"an lea% /on$", in%ia$es $"a$ !re/iu/ is no lea% /on$" an% $"ere&ore $"ere is s$ron# %e/an% &or $"e on$ra$ %. I& a "u#e %i&&erene in lose !ries, an in%ia$e a "an#e in !rie /oe/en$$"e &ur$"er $"e !rie %i&&erene in $"e &u$ures on$ra$ $"e /ore !rie will li-ely "an#e $owar%s $"e &u$ure !rie Open 4n$eres$ (O4* a. T"is is $"e $o$al nu/ber o& lon#s an% s"or$s /oin# in$o $"e &u$ure+s ins$ru/en$ &. I& inrease in ?I, in%ia$e o//erials inreasin# ne$ s"or$s, w"en ?I %ereases, o//erials re%uin# ne$ s"or$s *i'e' !rie will #o u! %. ?I use&ul in $"e &ollowin# ase( wan$ $o see /ar-e$ $ra%e in %ire$ion, #o in$o onsoli%a$ion, $"en see ?I %ro! or rise aroun% 178 su%%enly %urin# onsoli%a$ion i. I& /ar-e$ $ra%es u!, onsoli%a$es, an% ?I %ro!, !robabili$y /ar-e$ will /oe u! %.
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I& /ar-e$ $ra%es %own, onsoli%a$es, an% ?I inreases, !robabili$y /ar-e$ will /oe %own *as o//erials are a%%in# $o "e%#e Canno$ use ?I /oe by i$sel& ii.
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5E, 6O4NTS7 Tra%e in line wi$" $"e lon# $er/ *To! own %ire$ional bias an% w"en $"e "our Mar-e$ Flow is in syn' <"en $"ere is no lear %e&inable %ire$ion, we re/ain &la$ an% si%eline% un$il $"ere is a lear bias'
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UNDERSTANDING COMMITMENT OF TRADERS (COT) 1. 8y $e COT :epor$; I$ is %i&&iul$ $o 5uan$i&y olu/e $ra%e% a$ ea" !rie leel sine $"e urreny /ar-e$ is %een$ralie% an% $"ere is no sin#le e4"an#e $"a$ $ra-s all $ra%in# a$ii$ies' In !lae o& olu/ebase% $ra%in#, /any $ra%ers loo- $o $"e Co//o%i$y Fu$ures Tra%in# Co//issionDs *CFTC Co//i$/en$s o& Tra%ers *C?T re!or$ &or /ore in&or/a$ion on !osi$ionin# an% olu/e' I& use% wisely, $"e C?T %a$a an be a !re$$y s$ron# #au#e o& !rie a$ion' T"e aea$ "ere is $"a$ e4a/inin# $"e %a$a an be $ri-y, an% $"e %a$a release is %elaye% as $"e nu/bers are !ublis"e% eery Fri%ay &or $"e !reious Tues%ayDs on$ra$s, so $"e in&or/a$ion o/es ou$ $"ree business %ays a&$er $"e a$ual $ransa$ions $a-e !lae' :eading $e COT :epor$ =ere is a 5ui- lis$ o& so/e o& $"e i$e/s a!!earin# in $"e re!or$ an% w"a$ $"ey /ean( ● Commercial esribes an en$i$y inole% in $"e !ro%u$ion, !roessin#, or /er"an%isin# o& a o//o%i$y, usin# &u$ures on$ra$s !ri/arily &or "e%#in# ● Long Report Inlu%es all o& $"e in&or/a$ion on $"e Hs"or$ re!or$H, alon# wi$" $"e onen$ra$ion o& !osi$ions "el% by $"e lar#es$ $ra%ers ● Open Interest T"e $o$al nu/ber o& &u$ures or o!$ions on$ra$s no$ ye$ o&&se$ by a $ransa$ion, by %eliery or e4erise ● Noncommercial (Speculators) Tra%ers, su" as in%ii%ual $ra%ers, "e%#e &un%s an% lar#e ins$i$u$ions, w"o use &u$ures /ar-e$ &or s!eula$ie !ur!oses an% /ee$ $"e re!or$able re5uire/en$s se$ &or$" by $"e CFTC ● Nonreportable Positions Lon# an% s"or$ o!enin$eres$ !osi$ions $"a$ %onD$ /ee$ re!or$able re5uire/en$s se$ &or$" by $"e CFTC ● Number of Traders T"e $o$al nu/ber o& $ra%ers w"o are re5uire% $o re!or$ !osi$ions $o $"e CFTC ● Reportable Positions T"e &u$ures an% o!$ion !osi$ions $"a$ are "el% aboe s!ei&i re!or$in# leels se$ by CFTC re#ula$ions ● Short Report "ows o!en in$eres$ se!ara$ely by re!or$able an% nonre!or$able !osi$ions '.
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Spreading Measures $"e e4$en$ $o w"i" a nono//erial $ra%er "ol%s e5ual lon# an% s"or$ &u$ures !osi$ions
Ta-in# a loo- a$ $"e sa/!le re!or$, we see $"a$ o!en in$eres$ on Tues%ay June O, 2007, was 1P3,O0O on$ra$s, an inrease o& 3,213 on$ra$s &ro/ $"e !reious wee-' Nono//erial $ra%ers or s!eula$ors were lon# 22,P3P on$ra$s an% s"or$ 0,O10 on$ra$s /a-in# $"e/ ne$ s"or$' Co//erial $ra%ers, on $"e o$"er "an%, were ne$ lon#, wi$" 1P,P36 /ore lon# on$ra$s $"an s"or$ on$ra$s *127,2 107,30Q' T"e "an#e in o!en in$eres$ was !ri/arily ause% by an inrease in o//erial !osi$ions as nono//erials or s!eula$ors re%ue% $"eir ne$s"or$ !osi$ions' <.
Tree 6rimary 6remises a. Fli!s in /ar-e$ !osi$ionin# /ay be aura$e $ren%in# in%ia$ors' &. E4$re/e !osi$ionin# in $"e urreny &u$ures /ar-e$ "as "is$orially been aura$e in i%en$i&yin# i/!or$an$ /ar-e$ reersals' %. C"an#es in o!en in$eres$ an be use% $o %e$er/ine s$ren#$" o& $ren%'
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COT " Commi$men$ o) Traders a' Co//erials Mos$ in&or/e% #rou! an% !roi%e oun$er$ra%e
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!osi$ion &or $"e /a@ori$y o& o!en in$eres$ in $"e /ar-e$' T"ese are $"e 9/ar$ Money:' i' $an%ar% Co//erial Au/ula$ion >"ase(
Co//erials are $"e lar#es$ s"or$ sellers in $"e /ar-e$!lae beause $"ey are "e%#in# $"eir business nee%s' iii' Co//erials on$rol $"e lon# $er/ $ren% base% on 12 /on$" or year e4$re/es' 1' Co/in# &ro/ 12 /on or yr e4$re/e ne$ s"or$, weDre in sell !ro#ra/' 2' Co/in# &ro/ 12/on or yr e4$re/e ne$ lon#, weDre in buy !ro#ra/' ii'
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Lar#e !eula$ors Lar#e &ir/ $ra%ers, &un%s, an% "i#" leel !ria$e s!eula$ors w"o &or $"e /os$ !ar$ $ren% $ra%e' enerally on $"e ri#"$ si%e o& $"e /ar-e$ /all !eula$ors Ma@ori$y o& $ra%ers' T"ey are $"e 9u/b Money:' Consis$en$ly wron# on $"e si%e o& $"e /ar-e$'
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Open 4n$eres$ in COT a$a
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?!en in$eres$ $en%s $o inrease w"en new /oney is !oure% in$o $"e /ar-e$, /eanin# $"a$ s!eula$ors are be$$in# /ore a##ressiely on $"e urren$ /ar-e$ %ire$ion' T"us, an inrease in $o$al o!en in$eres$ is #enerally su!!or$ie o& $"e urren$ $ren%, an% $en%s $o !oin$ $o a on$inua$ion o& $"e $ren%, unless sen$i/en$ "an#es base% on an in&lu4 o& new in&or/a$ion' Conersely, oerall o!en in$eres$ $en%s $o %erease w"en s!eula$ors are !ullin# /oney ou$ o& $"e /ar-e$, s"owin# a "an#e in sen$i/en$, es!eially i& o!en in$eres$ "as been risin# be&ore' In a s$ea%y u!$ren% or %own$ren%, o!en in$eres$ s"oul% *i%eally inrease' T"is i/!lies $"a$ lon#s are in on$rol %urin# an u!$ren%, or s"or$s are %o/ina$in# in a %own$ren%' ereasin# o!en in$eres$ seres as a !o$en$ial warnin# si#n $"a$ $"e urren$ !rie $ren% /ay be la-in# real !ower, as no si#ni&ian$ a/oun$ o& /oney "as en$ere% $"e /ar-e$' T"ere&ore, as a #eneral rule o& $"u/b, risin# o!en in$eres$ s"oul% !oin$ $o a on$inua$ion o& $"e urren$ !rie /oe, w"e$"er in an u!$ren% or %own$ren%' elinin# or &la$ o!en in$eres$ si#nals $"a$ $"e $ren% is wanin# an% is !robably near i$s en%' <"en o!en in$eres$ rises or %ro!s 5ui-ly, li-ely !rie /oes in $"e o!!osi$e %ire$ion' Conen$ional >rie Rela$ions"i!( i. ?!en In$eres$ )!, !rie u! is bullis" ii. ?!en In$eres$ )!, !rie %own is bearis" iii. ?!en In$eres$ own, !rie u! is bearis" 1"
?!en In$eres$ own, !rie %own is bearis"
1#
iv.
MARKET PROFILES 1' Consolida$ion :ange 6ro)ile a' Consoli%a$ion Ran#e >ro&ile )n%ers$an% w"ere you are in $"e /oe $"a$ /ay alrea%y e4is$' I& in bearis" /ar-e$ eniron/en$, %urin# a onsoli%a$ion ran#e you an i%en$i&y &alse brea-ou$s $o $ra%e a#ains$ or o!!or$uni$ies $o en$er s"or$ wi$" an ?TE' b' Es$ablis" >osi$ion urin# Consoli%a$ion >erio%s o& onsoli%a$ion are $y!ially $"e o!!or$uni$y $o es$ablis" your !osi$ion in an$ii!a$ion o& w"ere $"e $ren% will #o' Loo- &or $i/es an%les;bars are s/all $o en$er $ra%es'
Tra%e En$ry on ?!!osin# Can%le ou wan$ $o en$er $ra%es w"en $"e bar;an%le #oes a#ains$ $"e /ar-e$ !ro&ile %ire$ion' I& !ro&ile is lon#, en$er $ra%es on a %own an%le' %' ICT >re&erene ICT !re&ers no$ $o &ollow $ra%es in$o new $erri$ory as i$ usually $ries $o o/e ba- %own $o $"e ran#e' Base $ra%in# on -nown leels' Breako2$ - Valid = False 6ro)ile Trending 6ro)ile :e>ersal 6ro)ile T"e !ro&ile will &or/ a sell %ay %urin# a bullis" Asian, Lon%on an% !ossibly N session bu$ &ail $o "ol% i$s rally an% reerse lower' I$ will &or/ a buy %ay %urin# a bearis" Asian, Lon%on an% !ossibly N session bu$ will &ail $o "ol% i$s lower !rie sli%e an% reerse "i#"er' Ty!ially N?, LC an% la$e N session will !os$ $"e reersal' a' Sing on i' win# %own $o a -ey wee-ly an%;or %aily su!!or$ an% brea-$"rou#" be&ore $urnin# u! an% reersin#' ii' Reersal /ay brea- in$o new session "i#"s be&ore i$ se$$les in$o a $ra%in# ran#e &or a new $ra%in# %ay' '
2' 3'
'
1$
b'
!'
Sing Up i' win# u! $o a -ey wee-ly an%;or %aily resis$ane an% brea-$"rou#" be&ore re$rain# %own' ii' Reersal /ay brea- in$o new session lows be&ore i$ se$$les in$o a $ra%in# ran#e &or a new $ra%in# %ay'
Sear% = es$roy Tren%in# i%eways Mar-e$( Ban-s will loo- $o lear ou$ s$o!s $o #ain a%%i$ional li5ui%i$y' a' A ran#e &or/s a&$er swin# low an% swin# "i#"' u!!or$ an% Resis$ane areas are &or/e% in $"e ran#e' Mar-e$ will loo- $o $a-e ou$ $"e lon#s by %i!!in# below $"e es$ablis"e% su!!or$ leel o& $"e ran#e'
1%
b'
Ne4$ $"e /ar-e$ will loo- $o $a-e ou$ $"e s"or$s by s"oo$in# ba- u! aboe $"e resis$ane leels'
'
ealers will $"en $ar#e$ $"e s$o!s aroun% $"e swin# !oin$s an% s"oo$ aboe !reious "i#"s $o $ri##er $"e s$o!s o& $"e s"or$s'
%'
Tra%ers $"in-in# $"a$ $"e !reious /oe &inally si#nals a buy brea-ou$ will $"en be &oole% as $"e %ealers will loo- $o $a-e ou$ $"e s$o!s aroun% $"e !reious swin# low !oin$'
2&
21
SUPPORT / RESISTANCE AREAS
1.
2.
<.
+.
.
S2ppor$ (emand*( T"is is an area w"ere buyers are li-ely #oin# $o oerw"el/ sellers ausin# $"e /ar-e$ $o #o u!' <"en a /ar-e$ &alls %own $o a !rior low, i$ is /ore si#ni&ian$ $"an w"en a /ar-e$ &alls %own $o a !rior "i#"' :esis$an%e (S2pply*7 T"is is an area w"ere sellers are li-ely #oin# $o oerw"el/ buyers, ausin# $"e /ar-e$ $o #o %own' <"en a /ar-e$ $ra%es u! $o a !rior "i#", i$ is /ore si#ni&ian$ $"an w"en a /ar-e$ $ra%es u! a !rior low' u!!or$ an beo/e resis$ane an% resis$ane an beo/e su!!or$ i& !ries brea- $"rou#" $"ese areas'
Con&luene o& R areas is a -ey one!$ $o $"e $ra%e en$ry' T"e lis$in#s below are onsi%ere% -ey R areas $o onsi%er &or on&luene' T"ere is no ri#"$ or wron# on&luene se$u!, $"e /ore on&luene you "ae $"e "i#"er $"e !robabili$y $"e $ra%e ou$o/e' T"e easies$ way $o &in% ey leels $o an$ii!a$e rea$ions in $"e &u$ure is $o be#in wi$" $"e lon# $er/ "ar$s an% wor- your way %own $o $"e lowes$ $i/e&ra/e you in$en% $o $ra%e &ro/' Na$2ral S=: Le>els a. =i#" ; Lows base% o&&( 12 /on$"s rollin# Suar$erly Mon$"ly
i.
/on$ly Car$s No$e $"e "i#"s $"e /ar-e$ $urne% a$ an% $"e lows $"e /ar-e$ $urne% a$' T"ese leels are $"e obious leels $"a$ any 5ui- #lane woul% reeal' o no$ s$rain your eyes an% was$e $i/e won%erin# i& a s!ei&i leel is a ey leel''' i$ is beause i$ is obious' T"ese /ar-e$ $urnin# !oin$s are obious''' %o no$ oer $"in- $"e/'
ii.
8eekly Car$s T"e lon# $er/ Mon$"ly ey R leels will a!!ear on $"ese "ar$s as well as new ey Leels $"e Mon$"ly $i/e&ra/e was no$ so a!!aren$ $o see'
iii.
aily Car$s T"is is w"ere $"e ban-s wor- &ro/' All $"e lon#er $er/ Mon$"ly an%
23
4n$raday Time 6eriods *"our, 1"our, an% 17/in T"ese will s"ow e4ellen$ rea$ion leels $o an$ii!a$e $ra%es $o se$ u! on &ar in $"e &u$ure an% $"is is $"e -ey $o !ro!er $ra%e sele$ion an% %eelo!in# !a$iene' No$e $"e ey R leels on your in%ii%ual in$ra%ay "ar$s you li-e $o use' ession =i#"s an% Lows *Asia /os$ i/!or$an$ i. Asian Session se$s $"e !ara/e$ers &or $"e &ollowin# Lon%on session 1. Be#ins( O!/ ET or 12a/ MT '. En%s( a/ ET or Pa/ MT <. Allow u! $o 1 "our be&ore an% a&$er $"ese $i/es ii. London Session se$s $"e !ara/e$ers &or $"e &ollowin# New or- session 1. Be#ins( 3a/ ET or Qa/ MT '. En%s( 12!/ ET or 7!/ MT <. Allow u! $o 1 "our be&ore an% a&$er $"ese $i/es iii. Ne ,ork Session se$s $"e !ara/e$ers &or $"e &ollowin# new $ra%in# session+s $ra%in# 1. Be#ins( Qa/ ET or 1!/ MT '. En%s( 7!/ ET or 10!/ MT <. Allow u! $o 1 "our be&ore an% a&$er $"ese $i/es 4n$raday Fra%$al */oney &low an% ITL or IT= )se $"e 17 /inu$e as a #o $o "ar$ &or /oni$orin# s"or$ $er/ swin#s &or iv.
&.
c.
2
.
3.
lower ris- en$ries an% &ine $unin# s$o! !lae/en$ on o!en !osi$ions' d. Trend Line Analysis *"annels, obious $ren%s 4mplied S=: Le>els a. Fi& Le>els i. Re$rae/en$ ii. E4$ensions &. 6i>o$ 6oin$s i. Mon$"ly >io$s ii. io$s iii. aily >io$s O$er S=: Le>els a. >reious ay Close;?!en &. Ins$i$u$ional >rie Leels *I>L Ins$i$u$ional Tra%ers /ay %e$er/ine $i/in# o& $ra%es aroun% 100 !i! !rie leels *0'20, 0'70, 0'Q0, e$' %. Tra%in# $o a !rior low or "i#" d. aily AR "i#";low
5E, 6O4NTS7 T"e /ore $i/es a su!!or$ an% resis$ane area is 9"i$:, $"e /ore si#ni&ian$ i$ is' ?nly $"e /os$ reen$ win# =i#" ; Low are u$ilie% &or %e$er/inin# Mar-e$ Flow wi$" ol% win#s %isre#ar%e%'
2!
AREAS OF CONFLUENCE 1.
/arke$ S$r2%$2re As /ar-e$s %eline an% /a-e lower lows, ea" new swin# lower in !rie is an"ore% or %ire$ly rea$in# $o ano$"er swin# "i#"er or lower' Eery swin# in !rie "as an e5ual oun$er swin# i$ is un&ol%in# &ro/ an% a$$e/!$in# $o &ul&ill' a' Any "or$ Ter/ Lon# *TL $"a$ "as a "i#"er TL on bo$" si%es o& i$ is onsi%ere% an In$er/e%ia$e Ter/ Low *ITL' Any ITL $"a$ "as a "i#"er ITL on bo$" si%es o& i$ is onsi%ere% a Lon# Ter/ Low *LTL' b' Any "or$ Ter/ =i#" *T= $"a$ "as a lower T= on bo$" si%es o& i$ is onsi%ere% an In$er/e%ia$e Ter/ =i#" *IT=' Any IT= $"a$ "as a lower IT= on bo$" si%es o& i$ is onsi%ere% a Lon# Ter/ =i#" *LT=' ' Tra%e !ri/arily on $"e si%e o& $"e $ren%' Lon# on bullis" an% s"or$ on bearis"'
2.
Sing 6oin$s Mar-e$ %elines an% /a-es lower lows on ea" new swin# lower in !rie, $"e !rie is 9an"ore%: or %ire$ly rea$in# $o ano$"er swin# lower a' Ea" swin# in !rie "as e5ual oun$er swin# b' >A nee%s $o /oe a$ leas$ 0 !i!s $o be onsi%ere% a swin# *on ) a$ leas$ ' Mar-e$ $ra%es &ro/ s"or$ $er/ lows *TL $o s"or$ $er/ "i#"s *T= ba- $o new TL' A$ TL an% T=, >A will %eelo! /ar-e$ s$ru$ures i' In$er/e%ia$e $er/ low *ITL( TL $"a$ "as "i#"er TL on ei$"er si%e 2"
In$er/e%ia$e $er/ "i#" *IT=( T= $"a$ "as lower T= on bo$" si%es iii' Lon# $er/ low *ITL( ITL $"a$ "as "i#"er ITL on ei$"er si%e i' Lon# $er/ "i#" *IT=( IT= $"a$ "as lower IT= on bo$" si%es %' win#s( loo- a$ swin#s an% un%ers$an% eery /oe is an"ore% $o !reious low or "i#" an% >A beo/es lear i$ is !io$in# on a 708 basis o& $"e !reious lows an% "i#"s i' I& swin# /oes 70 !i!s, a&$er onsoli%a$ion i& i$ on$inues "i#"er an% brea"es $"e swin# "i#", an$ii!a$e ano$"er 70 !i!s /oe a%%e% $o $"e low %urin# onsoli%a$ion ii' I& >A &ails $o $ra%e aboe $"e !reious swin# "i#", an$ii!a$e a %eline o& 70 !i!s &ro/ $"e "i#" /a%e on /os$ reen$ rally;onsoli%a$ion Session ?ig@Lo $"e "i#";low o& $"e 3 %i&&eren$ sessions' Asia is /os$ i/!or$an$ an% $"e "i#";low usually se$s $"e %ay+s R &or Lon%on an% )' a. ession Ti/e Asia O!/ ET P!/ ET *12 MT Lon%on 3 a/ 12 !/ ET *P1O MT N Qa/ 7!/ ET *1220 MT &. <"en %rawin# $"e "i#";low o& Asia, use $"e "ar% bo%ies an% no$ $"e wi-s' ?nly use wi-s i& a an%le is a s$ron# "a//er' :ange Epansion @ Con$ra%$ion aily ran#es $y!ially swin# &ro/ lar#e ran#e %ays $o s/all ran#e %ays an% ie ersa' 4ns$i$2$ional 6ri%e Le>el (46L* >rie leels w"ere o//erials usually en$er $"e /ar-e$' T"ey are 00, '20, '70, 'Q0 loa$e% be$ween eery 100 !i! /ar-in# *e'#' 1'0100, 1'0120, 1'0170, 1'01Q0 ii'
3'
5.
5.
a.
T"e Fi#ure Ter/ use% by $ra%ers $o re&er $o a 100 !oin$;!i! 2#
.
#'
leel or een a /i% !oin$ $o $"e Fi#ure' E4a/!le, 1'7770, 1'770, an% 1'7370' &. Basi Bi# Fi#ure Mo%el i. >rie an $ra%e $o an% boune;re$rae &ro/ a bi# &i#ure leel' ii. Loo- &or on&luene o& su!!or$in# leels, ?TE, e$' Always $a-e $"e Fi#ure in li#"$ o& w"ere we s$an% in $"e oerall /ar-e$ &low, s$ru$ure, an% $ren%' %. An$ii!a$e wee!s An$ii!a$e !rie swee!in# "i#"er an% lower $"an $"e Fi#ure $o $a-e ou$ s$o!s aboe an% below $"e leel' Trading $o 6rior Lo or ?ig7 d. ?n Lon#, w"en /ar-e$ &alls %own $o !rior low, $"is /oe is /ore si#ni&ian$ $"an w"en /ar-e$ &alls %own $o !rior "i#" e. ?n "or$, w"en /ar-e$ $ra%es u! $o !rior "i#", $"is /oe is /ore si#ni&ian$ $"an w"en /ar-e$ $ra%es u! $o !rior low ). Fibs raw &ibs usin# $"e swin#s, swee$ s!o$ is $"e 62OP8 leel wi$" O28 bein# /os$ o!$i/al g. Ran#e Cyle Calula$ions i. Mar-e$ yles in lar#e an% s/all ran#es, as %aily s$ar$s $o lose near !rior lose i$ is a s/all ran#e ii. For swin# "i#" ran#es, oun$ %ay;bars be$ween !reious swin# "i#"s an% /ul$i!ly by 1'2Q, $"en oun$ &orwar% $"a$ ' "oul% in%ia$e w"ere a new "i#" will un&ol% iii. For swin# lows, oun$ %ays be$ween !rior lows an% /ul$i!ly by 1'2Q 6i>o$ 6oin$s Ty!ially, w"en !rie is $ra%in# aboe en$ral !io$, i$Ds $i/e $o sell' <"en $ra%in# below, i$Ds $i/e $o buy' I& !rie "as no$ #one below en$ral !io$ &or $"e %ay, i$ /ay a$ as su!!or$' I$ /ay a$ as resis$ane i& !rie "as no$ #one aboe en$ral !io$ &or $"e %ay' aily 6i>o$s
2$
$'
)se !io$s as a $ool $o &in% an$ii!a$e% leels $o $ra%e on in $"e &u$ure' rawn by "an% or in%ia$or &ro/ 12a/ ET' Cen$ral !io$ a$s as an an"or &or >A' >A a$s li-e a rubber ban% i$ /oes away &ro/ en$ral !io$ an% $"en !ulls ba- $owar%s i$' =oweer, li-e a rubber ban%, one $ren% $a-es o&& i$ will sna! an% &ly' sed best in range trading periods! a. Buy Uone Area below en$ral !io$ &. ell Uone Area aboe en$ral !io$ %. ou an buy in a sell one i& you are $ra%in# be$ween !io$s o!!ose% $o $ren% $ra%in# OTE " Op$imal Trade En$ry - ee! Fib Re$rae/en$ T"e V62 an% VOP re$rae/en$ leels beause $"ey are al/os$ a$ $"e &ull 1008 re$rae/en$' ?TE woul% be rou#"ly $"e 708 leel be$ween $"e 62 an% OP leels'
2%
FIBONACCI Tra%ers use $"e "ibonacci Retracement leels as !o$en$ial s2ppor$ and resis$an%e areas' ine so /any $ra%ers wa$" $"ese sa/e leels an% !lae buy an% sell or%ers on $"e/ $o en$er $ra%es or !lae s$o!s, $"e su!!or$ an% resis$ane leels $en% $o beo/e a sel&&ul&illin# !ro!"ey' Tra%ers use $"e "ibonacci #$tension leels as pro)i$ $aking le>els' A#ain, sine so /any $ra%ers are wa$"in# $"ese leels $o !lae buy an% sell or%ers $o $a-e !ro&i$s, $"is $ool $en%s $o wor- /ore o&$en $"an no$ %ue $o sel& &ul&illin# e4!e$a$ions' T"e Fibonai $ool wor-s bes$ w"en $"e /ar-e$ is $ren%in#' T"e i%ea is $o #o lon# *or buy on a re$rae/en$ a$ a Fibonai su!!or$ leel w"en $"e /ar-e$ is $ren%in# u!, an% $o #o s"or$ *or sell on a re$rae/en$ a$ a Fibonai resis$ane leel w"en $"e /ar-e$ is $ren%in# %own' In or%er $o &in% $"ese re$rae/en$ leels, you "ae $o &in% $"e reen$ si#ni&ian$ win# =i#"s an% win#s Lows' T"en, &or %own$ren%s, li- on $"e win# =i#" an% %ra# $"e ursor $o $"e /os$ reen$ win# Low' For u!$ren%s, %o $"e o!!osi$e' Cli- on $"e win# Low an% %ra# $"e ursor $o $"e /os$ reen$ win# =i#"' 1'
2'
>reious T"ree ays Re&erene $"e !reious $"ree %ays w"en $ryin# $o %e$er/ine !oin$s $o %raw Fibs a$ $"e =i#"s;Lows' ession =i#"s Lows ou an use a ession =i#";Low w"en %rawin# Fibs' No$ @us$ only %aily "i#"s;lows' U6T:EN
3&
O8NT:EN
1'
Tar#e$in# )sin# Fib Re$rae/en$ a' )!si%e ?b@e$ie( >ull Fib &ro/ reen$ swin# "i#" $o $"e swin# low' Firs$ $a-e !ro&i$ woul% be aroun% $"e 100 leel an% $"en $"e 200 leel' b' ownsi%e ?b@e$ie( >ull Fib &ro/ reen$ swin# low $o $"e swin# "i#"' Firs$ $a-e !ro&i$ woul% be aroun% $"e 100 leel an% $"en $"e 200 leel' ' Always loo- $o $"e le&$ o& !rie $o i%en$i&y o$"er -ey !rie leels w"i" /ay oini%e wi$" $"e $ar#e$e% !rie ob@e$ie'
31
2'
Tar#e$in# )sin# Fib E4!ansion a' )!si%e ?b@e$ie( >ull &ro/ $"e buy !oin$ on $"e swin# low $owar%s $"e !reious swin# "i#"' T"is will s"ow $"e e4!ansion leels' b' ownsi%e ?b@e$ie( >ull &ro/ $"e sell !oin$ on $"e swin# "i#" $owar%s $"e !reious swin# low' T"is will s"ow $"e e4!ansion leels'
3'
>rolon#e% Tar#e$in# )se Fib Re$rae/en$ an% ins$ea% o& !ullin# &ro/ "i#" $o low an% $"e "i#" si$s on $"e 100 leel, raise $"e Fib $ool so $"a$ $"e "i#" si$s on $"e 70 leel' ouDll see $"e e4$ension leels /oe "i#"er &or a lon#er ran#e !rie ob@e$ie in a $ren%in# "i#"er /ar-e$'
32
OTE PATTERNS 1. S$andard OTE ' OTE 6a$$ern " Long( on+$ rea$ $o !rie /oe/en$s, an$ii!a$e' An$ii!a$e an% $ra%e in$o -ey su!!or$ leels' Buy as !rie #oes %own an% a!!roa"es $"e swin# low' I& bar Hwi-sH, you an /oe s$o!s or $a-e $ra%es o&& $o brea- een'
An$ii!a$e !rie $o #o %own $o su!!or$ leel an% boune u!' T"e $ou" o& $"e su!!or$ is 1' i' Boune u! $o a s"or$ $er/ "i#" a$ !oin$ 2' An$ii!a$e $ra%e $o #o ba- %own an% re$es$ su!!or$' ii' Loo- $o en$er lon# in $"e HHwee$ !o$HH *Be$ween 62 an% OP leels VO0'7 iii' Firs$ $a-e !ro&i$ !oin$ woul% be w"en $ra%e rea"es !oin$ 2 !rie or 20 !i!s' i4' >ro$e$ie s$o! loss is 10 !i!s /ini/u/ below !oin$ 1' OTE 6a$$ern " Sor$ ( on+$ "ase !rie a$ion' I& !rie #oes u!, %on+$ assu/e i$ will always /oe u!' An$ii!a$e an% $ra%e s"or$ in$o -ey resis$ane leels' ell as !rie #oes u! an% a!!roa"es $"e swin# "i#"' I& bar Hwi-sH, you an /oe s$o!s or $a-e $ra%es o&& $o brea- een' '
'
4'
I%en$i&y, an$ii!a$e !rie $o #o %own $o resis$ane leel an% 33
re$raes %own' T"e $ou" o& $"e resis$ane is 1' 4i' Re$rae %own $o a s"or$ $er/ low a$ !oin$ 2' An$ii!a$e $ra%e $o #o ba- u! an% re$es$ resis$ane' 4ii' Loo- $o en$er s"or$ in $"e Hwee$ !o$H *Be$ween 62 an% OP leels VO0'7 4iii' Firs$ $a-e !ro&i$ !oin$ woul% be w"en $ra%e rea"es !oin$ 2 !rie or 20 !i!s' 4i' >ro$e$ie s$o! loss is 10 !i!s /ini/u/ aboe !oin$ 1' '.
4CT :e)le%$ion 6a$$ern - Te An$i-OTE a. B2y Eample( ouDll "ae a si#ni&ian$ low an% you an$ii!a$e $"e /oe is $o "ase s$o!s below $"e leel' In or%er $o a!!ro4i/a$e $"e !rie leel $o en$er, %raw a Fib &ro/ low $o "i#" an% loo- $o #o lon# a$ $"e 100 leel' <"en loo-in# $o $"e le&$, i$ will a!!ear $o be an ?TE Re&le$ion'
b.
ou an !ull $"e Fib &ro/ $"e "i#" $o line u! $"e !reious low a$ $"e ?TE leel an% youDll see "ow $"e reen$ low a$ $"e 100 leel was s!o$ on' Sell Eample( ouDll "ae a si#ni&ian$ "i#" an% you an$ii!a$e $"e /oe is $o "ase s$o!s aboe $"e leel' In or%er $o a!!ro4i/a$e $"e !rie leel $o en$er, %raw a Fib &ro/ reen$ "i#" $o low an% loo- $o #o s"or$ a$ $"e 100 leel'
3
ou an !ull $"e Fib &ro/ $"e low $o line u! $"e !reious "i#" a$ $"e ?TE leel an% youDll see "ow $"e reen$ "i#" a$ $"e 100 leel was s!o$ on' <"en loo-in# $o $"e le&$, i$ will a!!ear $o be an ?TE Re&le$ion' <.
?idden OTE ou an %raw Fibs &ro/ o$"er i/!or$an$ areas o& on&luene li-e reen$ "i#"s;lows or session "i#"s lows $o &in% an ?TE'
3!
EI?N TRADING 1.
Asian Session - T"e Asian Ran#e %e$er/ines $"e %ire$ional bias or li-ely %ire$ion &or $"e /a@ori$y o& $"e Lon%on N sessions' <"ere $"e /oney is !osi$ione% in Asian %i$a$es $"e !ro&i$ release on $"e $ra%in# %ay' Ty!ially $ra%es oun$er $"e N session %ire$ion in a orre$ie boune'
a.
&.
Asian ill Uone i. 6(00!/ 10(00!/ ET is $y!ial Asian ill Uone &or $ra%es' ill Uone is $"e $i/e o& %ay w"ere youD% i%eally loo- &or a $ra%e' ii. Asian ession is be$$er &or !osi$ion $ra%in# in lon# $er/ !osi$ions' <"i!las" "or$ Ca$a!ul$ Buy i. un%ay ?!en a! =i#"er &ro/ Fri%ayDs Close ii. . For bullis" eniron/en$s you an buy $"e MT >osi$ie or Bullis" ier#ene insi%e an% or a$ $"e Fri%ay losin# ran#e u!on #a! &illin#' >. Ta-e !ro&i$s a$ 20 !i!s an% se$ re/ainin# !or$ion $o brea-een an% loo- &or Lon%on on$inua$ion in$o N session'
3"
%.
<"i!las" Buy Ca$a!ul$ "or$ i. un%ay ?!en a! Lower &ro/ Fri%ayDs Close ii. osi$ie or Bullis" ier#ene' iii. Buy near un%ay ?!enin# an% loo- &or e4i$ a$ $"e Fri%ay Closin# Ran#e' i>. For bearis" eniron/en$s you an s"or$ $"e MT Ne#a$ie or Bearis" ier#ene insi%e an% or a$ $"e Fri%ay losin# ran#e u!on #a! &illin#' >. Ta-e !ro&i$s a$ 20 !i!s an% se$ re/ainin# !or$ion $o brea-een an% loo- &or Lon%on on$inua$ion in$o N session'
d.
Lay Asian ession ession %oesn+$ $y!ially a$$e/!$ $o breain$o new "i#"s ; lows' Asian ession Buy Ty!ially $ra%es oun$er $"e N session %ire$ion in a orre$ie boune' i. Asian ession rarely sees &ollow $"rou#" on new lows' ii. ?n "i#"er $i/e&ra/es li-e . Ta-e !ro&i$s a$ ?TE leels &or N win# an% leae !or$ion &or on$inua$ion in$o Lon%on'
e.
3#
).
'.
Asian ession ell Ty!ially $ra%es oun$er $"e N session %ire$ion in a orre$ie boune' i. Asian ession rarely sees &ollow $"rou#" on new "i#"s' ii. ?n "i#"er $i/e&ra/es li-e . Ta-e !ro&i$s a$ ?TE leels &or N win# an% leae !or$ion &or on$inua$ion in$o Lon%on'
London Open a. London Open 5ill one See$ Spo$ " 37<0am - 7<0am #/T &. Long Oppor$2ni$y - :aid S$ops $en Soo$ )or S2ppor$ i. oal is $o %ial in on $"e Low o& $"e %ay $o #o lon# &ro/' 1. Firs$ ob@e$ie a&$er Lon%on ?!en is $o rai% Asian =i#" s$o!s' '. A&$er s$o!s are $a-en ou$, !rie /oes lower $es$in# -ey su!!or$ leels ?TE' <. Fro/ Lon%on ?!en $o Close or 1Q(00 MT, $"e aily Ran#e is !u$ in an% you s"oul% no$ use $i#"$ $railin# s$o!s'
3$
ii.
%.
In Bullis" on%i$ions you /ay leae a !or$ion o& $"e $ra%e on beyon% 1Q(00 MT &or s"or$ $er/ oerni#"$ $ra%es $"a$ an !ay well wi$" only 10208 o& ori#inal !osi$ion'
Sor$ Oppor$2ni$y - :aid S$ops $en Soo$ )or :esis$an%e i. oal is $o %ial in on $"e =i#" o& $"e %ay $o s"or$ &ro/' 1. Firs$ ob@e$ie a&$er Lon%on ?!en is $o rai% Asian Low s$o!s' '. A&$er s$o!s are $a-en ou$, an%les /oe "i#"er $o $es$ -ey resis$ane leels ?TE' <. Fro/ Lon%on ?!en $o Close or 1Q(00 MT, $"e aily Ran#e is !u$ in an% you s"oul% no$ use $i#"$ $railin# s$o!s' ii. In Bearis" on%i$ions you /ay leae a !or$ion o& $"e $ra%e on beyon% 1Q(00 MT &or s"or$ $er/ oerni#"$ $ra%es $"a$ an !ay well wi$" only 10208 o& ori#inal !osi$ion'
3%
d.
London Open i. urin# a "i#"er TF onsoli%a$ion, we wai$ &or $"e %aily ran#e $o on$ra$' Moni$or $"e "ourly "ar$s &or onsoli%a$ion near -ey ;R leels' T"e i%eal se$u! woul% lea% $o ran#e e4!ansion w"i" /eans $"a$ $"e !reious %ay is usually a s"or$ ran#e %ay' )se $"e "i#";low o& !reious %ay $o /easure ?TE' ii. T"e se$u! usually ours after a %aily &ra$al &or/s a$ a -ey leel' Loo- &or on&luene o& u!!or$ Resis$ane, wee-ly !io$s an% !ro@e$ion $ar#e$s' Nu/ber $"e bars o& $"e =ea% "oul%ers !a$$ern &ro/ 1 $o 7, 3 bein# $"e "ea%' In a !er&e$ worl% %ays 3 are s"or$ ran#e %ays an% I woul% use Bar as $"e #reen li#"$ $o an$ii!a$e ran#e e4!ansion on %ays 7 6' iii. T"e se$u! ours /ore &re5uen$ly %urin# a "i#"er TF ran#e e4!ansion' In $"is eniron/en$ sen$i/en$ is a /a@or a$alys$ &or &re5uen$ L? se$u!s' I use a 30 >erio% rie is relen$lessly reaching &or a -ey leel' Loo- &or on&luene o& u!!or$ Resis$ane, wee-ly !io$s an% !ro@e$ion $ar#e$s' I& !rie re$raes %urin# L?, $o re$es$ a R leel, $"e run is usually s"or$ lie% an% a swi&$ /oe $owar%s our $ar#e$ an be e4!e$e% a$ N?'
&
urin# a s/aller TF ran#e e4!ansion, I use $"e 70 !erio% 8R on $"e 30Min "ar$ as a sen$i/en$ /e$er' Also use% $o #au#e oun$er$ren% e4"aus$ion an% -ey o&& o& ;R role reersals' London Close a. London Close 5ill one i. Lon%on Close a$ 11a/ ET A!!ro4' ii. ill Uone is be$ween 10a/ 1!/ ET' iii. enerally $"e /ar-e$ will loo- $o enoun$er !ro&i$ $a-in# aroun% 11a/ ET as Lon%on $ra%ers lose $"eir $ra%in# %ay an% N $ra%ers are $a-in# lun"' &. To ominan$ Trade Types i. Coun$er Tren% Tra%e( Sui- 1720 !i! sal! usin# 7/in "ar$ &or s"or$$er/ /ar-e$ e4!osure' ii. Lon%on Close Tren% Tra%e( Tren% $ra%e en$ry $o #e$ in syn wi$" $"e %aily $ren% or lon# $er/ !rie swin#' %. A>erage aily :ange i. I%en$i&y 7, 10, an% 20 %ay AR $o #e$ an i%ea o& $"e !i!s $ra%in# in $"e urren$ eniron/en$' ii. )se 7 %ay AR aroun% N ?!en w"i" is w"en $"e /ar-e$ "as HH!rie% inHH $"e "i#" or low o& $"e %ay' A%% $"e 7 %ay AR $o $"e "i#"es$ "i#" an% lowes$ low $o AR "i#"s an% lows' d. Op$imal Trade En$ry i. >' $o! is !lae% 10 !i!s beyon% $"e =i#" or Low on Fib' ii. Firs$ ob@e$ie is 1720 !i!s !ro&i$' iii. Las$ !ro&i$ is $a-en a$ $"e =i#" or Low o& $"e swin#' i>. T"e En$ry >oin$ is $"e 62OP8 leels or be$ween $"e/ *VO0'7 e. London Close Co2n$er-Trend B2y i. Re&erene $"e ) ollar In%e4 an% %e$er/ine i& i$ "as /e$ i$s 7 %ay Aera#e aily Ran#e ii. e$er/ine i& $"e !air $ra%e% "as /e$ i$s 7 %ay AR' iii. >rior $o $"e Lon%on Close ill Uone win%ow %e$er/ine "i#"er $i/e&ra/e . No$e $"e !reious 3 %ays "i#"s an% lows, ession =i#"s;Lows, an% >io$ >oin$s >. As !rie %ro!s %own in$o $"e AR leel an% ill Uone, loo- a$ $"e 7/in lows &or a boune o&& o& one o& $"e leels' >.
<.
1
A&$er $"e boune, !ull a Fib oer $"e s"or$ $er/ u!swin# an% onsi%er buyin# $"e !air a$ ?TE on $"e 7/in "ar$' >ii. Ris- 10 !i!s un%er $"e low use% &or $"e Fib an% $a-e !ro&i$s on 1720 !i!s an% "ol% &or $"e "i#" o& $"e Fib base% swin#' >iii. I%eally, be$$er $ra%es &or/ on swin#s /easurin# a$ leas$ 178208 o& $"e %aily ran#e o& $"e $ra%in# %ay' London Close Co2n$er-Trend Sell i. Re&erene $"e ) ollar In%e4 an% %e$er/ine i& i$ "as /e$ i$s 7 %ay Aera#e aily Ran#e AR' ii. e$er/ine i& $"e !air $ra%e% "as /e$ i$s 7 %ay AR' iii. >rior $o $"e Lon%on Close ill Uone win%ow %e$er/ine "i#"er $i/e&ra/e . i>. No$e $"e !reious !reious 3 %ays "i#"s an% lows, ession =i#"s;Lows, an% >io$ >oin$s >. As !rie rises u! in$o $"e AR leel an% ill Uone, loo- a$ $"e 7/in lows &or a boune o&& o& one o& $"e leels' >i.
).
A&$er $"e boune, !ull a Fib oer $"e s"or$ $er/ %ownswin# an% onsi%er sellin# $"e !air a$ ?TE on $"e 7/in "ar$' >ii. Ris- 10 !i!s aboe $"e "i#" use% &or $"e Fib an% $a-e >i.
2
+.
!ro&i$s on 1720 !i!s !i!s an% "ol% &or $"e $"e low o& $"e Fib base% swin#' >iii. I%eally, be$$er $ra%es &or/ on swin#s /easurin# a$ leas$ 178208 o& $"e %aily ran#e o& $"e $ra%in# %ay' g. London Close Se$2p i. urin# a "i#"er TF onsoli%a$ion, we wai$ &or $"e %aily ran#e $o e4!an%' Moni$or $"e "ourly "ar$s &or ran#e e4!ansion $owar%s -ey R leels' T"e i%eal se$u! woul% lea% $o ran#e on$ra$ion w"i" /eans $"a$ we are o/in# o&& a L? !ro&i$ release' ii. T"e se$u! usually ours %urin# trend exhaustion a$ a -ey leel' Loo- &or on&luene o& R, wee-ly !io$s an% !ro@e$ion $ar#e$s' $ar#e$s' LC se$u!s se$u!s are oun$er $ren% $ra%es' $ra%es' )se $"e 30 !erio% robabili$y i. Q08 o%%s o& $"e lose bein# a$ or near $"e "i#" or low &or $"e %ay;bar' ii. I& in a bearis" senario, VO78 o%%s $"a$ $"e o!en is near $"e "i#" an% $"e lose is near $"e low' Easies$ session $o $ra%e' $ra%e' Lon%on "i#";low "i#";low alrea%y in in d. N ?!en Easies$ !lae' e. I%eal En$ry i. For "or$s, ell on a /oe u!' ii. For Lon#s, buy on a /oe %own' ). e$$in# a $o! w"en i%eal leel is $oo /any !i!s <"en $"e i%eal s$o! is $oo /any !i!s away &ro/ $"e 2030 !i! s$o! leel, #o $o s/aller $i/e&ra/es $i/e&ra/es an% i%en$i&y a s$o! leel on w"a$ !rie is $ellin# you on $"e s/aller leel' g. N ession Tra%es Tra%es No$es( i. e$ in syn wi$" w"a$ $"e "i#"er leel $i/e&ra/es are $ellin# you' Ma@ori$y o& $"e $i/e $"e $ra%es will &ollow $"a$ $ren%' ii. I& loo-in# a$ %aily $i/e&ra/e an% /ar-e$ o!ene% near $"e 3
%ay+s "i#"s an% "as $ren%e% lower, weD% loo- &or /ore s"or$s $o !us" $o a %ayDs low' low' Lon%on ession rea$e% $"e %ayDs "i#"' Lon%on Close oini%in# wi$" N ession lun" $i/e allowe% &or a oun$er $ra%e o!!or$uni$y' Ta-e !ro&i$ a$ $"e 3Q8 re$rae/en$ leel o& $"e &ull %ays ran#e'
iii.
PRICE ACTION 8a$ is 6ri%e A%$ion; .ery basially, >rie A$ion is eery$"in# $"a$ $ra%ers are %oin# an% "ow $"ey are be"ain# !lae% on$o a "ar$ &or o$"ers $o analye' >rie A$ion is eery$"in# $"a$ !rie is %oin# an% "as %one on a Fore4 !air or $ra%in# ins$ru/en$ &or a $ra%er $o see on a "ar$' All !rie re!resen$s on a "ar$ is w"a$ $ra%ers "ae %one an% "ow $"ey "ae be"ae% #ien a er$ain si$ua$ion' For e4a/!le !rie #e$s $o a su!!or$ area an% !rie bounes "i#"er' T"is is $ra%ers buyin# u! a$ a leel in $"e /ar-e$ w"ere $"ey $"in- su!!or$ is' Ano$"er e4a/!le o& !rie a$ion a$ wor- on a "ar$ is a >in Bar' >rie #e$s $o a er$ain leel in $"e /ar-e$ be&ore re@e$in# $"a$ leel an% sna!!in# ba$"e o$"er way' ?n a "ar$ we see a >in Bar bu$ $"a$ >in Bar was /a%e u! o& $ra%ers all aroun% $"e worl% buyin# or sellin# a$ $"e sa/e area an% re@e$in# "i#"er or lower !ries' T"is is a /e$"o% $"a$ "as been aroun% &or a lon# $i/e an% will be aroun% &or a lon# $i/e $o o/e' )nli-e o$"er rubbis" in%ia$ors or bla- bo4 sys$e/s >rie A$ion $ra%in# %oes no$ s$o! wor-in# w"en $"e /ar-e$ %yna/is "an#e' ?o %an e 2se 6ri%e A%$ion $o pro)i$; Tra%ers an% "u/ans are ery "abi$ual an% will %o $"e sa/e #ien $"e sa/e iru/s$anes' As $ra%ers we an be#in $o reo#nie !a$$erns $"a$ &or/ on $"e "ar$' T"ese !a$$erns will $en% $o re!ea$ $"e/seles an% "ae $"e sa/e ou$o/es' No $wo $ra%es will eer be $"e sa/e an% no ou$o/es will eer /a$" a !reious $ra%e+s, bu$ by !er&e$in# $"ese "i#" !robabili$y !rie a$ion !a$$erns we an be#in $o !lae $ra%es $"a$ oer $i/e will #ie us an e%#e in $"e /ar-e$
Tra%ers an learn an% !er&e$ $"ese $ra%in# !a$$erns an% be#in $o i/!le/en$ s$ra$e#ies $"a$ will oer $i/e #ie $"e/ an e%#e on $"e /ar-e$' An e%#e is si/!ly so/e$"in# $"a$ #ies a $ra%er a be$$er "ane $"an 70;70 o& !lain# a winnin# $ra%e'
!
HIGH PROBABILITY PRICE PATTERNS 1. Te oDi - For/ w"en o!en an% lose are ir$ually e5ual' o@i alone is neu$ral' Bullis" or bearis" bias is base% on !ree%in# !rie a$ion an% &u$ure on&ir/a$ion' Bes$ use% as on&ir/a$ion o& an$ii!a$e% a$ion, "an#es in %ire$ion'
2.
Te ?ammer aka 6in&ar - For/ w"en !rie /oes si#ni&ian$ly lower a&$er $"e o!en, bu$ rallies $o lose well aboe $"e in$ra%ay low'
3.
Te Teeer Lo - Loo-s li-e onseu$ie Bullis" >inbars' In%ia$es $"a$ !rie "el% $wie a$ $"e e4a$ sa/e leel' ellers no$ able $o !us" !rie lower' T"e lon#er $"e wi-s $"e be$$er' >re&erene is $o see $"e !a$$ern a$ =our an% 1=our "ar$s a$ "i#"er $i/e &ra/e R leels' I& ao/!anies MT ier#ene, loo- $o $ra%e /a4i/u/ rise4!osure
4.
Te Teeer ?ig - Loo-s li-e onseu$ie Bearis" >inbars' In%ia$es $"a$ !rie "el% $wie a$ $"e e4a$ sa/e leel' Buyers no$ able $o !us" !rie "i#"er' T"e lon#er $"e wi-s $"e be$$er' >re&erene is $o "
see $"e !a$$ern a$ =our an% 1=our "ar$s a$ "i#"er $i/e &ra/e R leels' I& ao/!anies MT ier#ene, loo- $o $ra%e /a4i/u/ rise4!osure
5.
:ailroad Tra%ks Two an%les$i-s wi$" s/aller wi-s &or "i#"s;lows w"ere $"e !ree%in# an%leDs bo%y /a$"es $"a$ o& $"e urren$ an%leDs bo%y in $"e o!!osi$e %ire$ion' Loo- &or $"ese a$ -ey leels $o si#ni&y an en#ineere% reersal' .ery s$ron# !a$$ern'
6.
?ead = So2lders Top Forma$ion ellin# >a$$ern a. Ty!ially ours a$ in$er/e%ia$e or lon#$er/ "i#"' &. >rie ob@e$ie &ro/ "i#"es$ "i#" o& "ea% $o $"e lows a$ $"e ne-line' Measure &ro/ "i#" $o $"e ne-line an% !rie ob@e$ie woul% be $"a$ %is$ane e4$en%in# below $"e ne-line' %. ellin# >a$$ern'
3.
Tree 4ndians Clima :e>ersal 6a$$ern a. T"ree !ro#ressiely "i#"er !rie slo!e "i#"s rea"in# a $o! near an area o& resis$ane' T"is woul% be a sell !a$$ern as weD% #
&.
reasonably e4!e$ !rie $o &all' Loo- &or ?TE a$ a lower $i/e &ra/e' ellin# >a$$ern'
Triangles =ow ICT Tra%es T"e/ a. No$e a -ey resis$ane leel w"ere you &in% onsoli%a$ion an% su!!or$;resis$ane' >lo$ a #eneral $ren%line &ro/ low !oin$ $o i$s in$erse$ion wi$" $"e -ey resis$ane leel' Measure &ro/ low u! $o $"e resis$ane leel' &. )se $"e wi%es$ !or$ion o& $"e $rian#le an% a%% $"a$ !i! ran#e $o $"e low !oin$ %i!s alon# $"e $ren% line' No$ ea" leel as i$ !ro#resses an% $"ese leels woul% be w"ere youD% e4!e$ $a-e !ro&i$ !oin$s in $"e &u$ure %urin# a buy !ro#ra/' 9. 4n>er$ed ?ead = So2lders Bo$$om Forma$ion a. Ty!ially ours a$ in$er/e%ia$e or lon#$er/ low' &. >rie ob@e$ie &ro/ lowes$ low o& iner$e% "ea% $o $"e "i#"s a$ $"e iner$e% ne-line' Measure &ro/ low $o $"e iner$e% ne-line an% !rie ob@e$ie woul% be $"a$ %is$ane e4$en%in# aboe &ro/ $"e iner$e% ne-line' %. Buyin# >a$$ern 10. B2ll Flag Con$in2a$ion 6a$$ern Loo- &or $"e &la# !ole w"i" woul% be a s"ar! !rie run u! &ollowe% by %esen%in# ran#e o& !rie be$ween "annel' >rie ob@e$ie woul% be %one by #e$$in# $"e !i! ran#e &ro/ low $o "i#" an% a%%in# $"a$ %is$ane $o $"e lowes$ low o& $"e &la# an% $o $"e brea-ou$ o& $"e &la#' T"ere woul% be a reasonable e4!e$a$ion $"a$ !rie will a!!reia$e $o /ee$ $"ose leels' 8.
$
11.
Bear Flag Con$in2a$ion 6a$$ern Loo- &or $"e &la# !ole w"i" woul% be a s"ar! !rie run %own &ollowe% by asen%in# !rie ran#e;"annel' >rie ob@e$ie woul% be %one by #e$$in# $"e !i! ran#e &ro/ "i#" $o low an% a%%in# $"a$ %is$ane $o $"e "i#"es$ "i#" o& $"e &la# an% $o $"e brea-ou$ lower o& $"e &la#' T"ere woul% be a reasonable e4!e$a$ion $"a$ !rie will %e!reia$e $o /ee$ $"ose leels'
1'.
Coil Epansion 6a$$ern a. raw $ren%line o& lower "i#"s an% $ren%line o& "i#"er low $o a !oin$ w"ere $"ey loo- $o in$erse$' As !rie a!!roa"es $"e in$erse$ion, weD% e4!e$ !rie $o ran#e "i#"er or lower &ro/ $"a$ !oin$' &. )se "i#"er $i/e &ra/e analysis $o #e$ in syn an% an$ii!a$e w"i" %ire$ion !rie will %ue $o %ire$ional bias' I& !a$$ern %
%.
ours a$ -ey su!!or$ leel, an$ii!a$e !rie $o ran#e "i#"er' Measure ran#e &ro/ $"e low $o $"e $ou" !oin$ o& $"e u!!er $ren% line o& lower "i#"s aboe i$' A%% $"e ran#e $o $"e u!!er or lower $ren% line $o i%en$i&y a !rie ob@e$ie one !rie be#ins $o ran#e ou$ o& $"e oil'
So2p :e>ersal 6a$$ern - Tur$le ou! is w"en !rie $a-es ou$ s$o!s beyon% an ol% "i#" or low an% i//e%ia$ely reerses %ire$ion a. I%en$i&y $"e lowes$ low an% "i#"es$ "i#" in $"e las$ 20 !erio%s;an%les$i-s' &. o lon# a$ $"e $i/e !rie #oes below $"e lowes$ low in $"e !reious 20 !erio%s' T"is is %one on $"e no$ion $"a$ $"e !rie /oe below is a &alse brea-' %. o s"or$ a$ $"e $i/e !rie #oes aboe $"e "i#"es$ "i#" in $"e !reious 20 !erio%s' T"is is %one on $"e no$ion $"a$ $"e !rie /oe aboe is a &alse brea-' 14. :ip$ide :e>ersal Any si#ni&ian$ "i#" or low bro-en;re@e$e% oer any !erio%, nu/ber o& an%les s"oul% /oe in $"e o!!osi$e %ire$ion a&$er bro-en' 1. O2$side ay i$ on Close a. >a$$ern w"ere seon% an%le "as a "i#"er "i#" an% lower low $"an $"e !erio% be&ore wi$" a %own lose' Bullis" senario w"en i$ ours a$ an oersol% !erio% usin#
!&
ay - >a$$ern w"en $"e seon% an%le "as a "i#"er low an% a lower "i#" $"an $"e !reious %ay' )!on $"e lose o& $"e an%le, i$ si#ni&ies a $ren%in# %ay or lar#e ran#e e4!ansion %ay $o &ollow'
16. 4nside
!1
TRAIN
Te 2das Sing a. Ju%as win# An en#ineere% !rie swin# /ean$ $o lea% rea$ionary $ra%ers in$o $"e wron# %ire$ion' Ty!ially a &alse rally $"a$ a!!ears ini$ially $o e/o$ional $ra%ers as $"e ne4$ bi# run in !rie' In $"e /ar-e$, $ra%ers $"a$ &ollow $"is swin# &in% $"e/seles $ra!!e% on $"e wron# si%e an% !ay $"e !rie'
<"en Ju%as win# For/s Essen$ially is a s$o! rai% $"a$ /any $i/es $ra%es in$o( i. ey R Leel ii. >reious =i#" or Low iii. Coun$erwin# $o For/ ?TE i>. Rai% $"e >reious . Rai% $"e >reious i. Rai% $"e >reious ession $o!s >ii. Rai%in# ession $o!s 1. I& $ra%in# Lon%on ?!en, loo- &or Asian s$o!s $o be rai%e%' '. I& $ra%in# N ession, loo- &or Lon%on ?!en s$o!s $o be rai%e%' /arke$ Sing 6oin$s a. 10(00 MT W 7/in C"ar$ i. $an%ar% Ju%as win# 1. )se o!enin# !rie on /i%ni#"$ an%le, %raw o!en line in$o $"e %ay' '. I& Bearis", loo- &or s"or$s a$ !oin$s aboe $"e line' &. Ju%as win# ?ne Eery 2=our i. T"e win# s"oul% "a!!en a$ leas$ one in a 2"our &.
'.
!2
%.
d.
e.
session' ii. win# s"oul% be in $"e o!!osi$e %ire$ion o& w"a$ $"e $ren% &or $"e %ay "as been' Con&luene o& R )se 17 !i! bu&&er w"en loo-in# &or on&luene o& R Tra%e A&$er win# =i#" ; Low i. I& /ar-e$ is $ra%in# lower, $"en loo- &or a sell a&$er a reen$ swin# "i#"' ii. I& /ar-e$ is $ra%in# "i#"er, $"en loo- &or a buy a&$er a reen$ swin# low' Two Tren%s in a ay i. Mornin# Tren% $"a$ is $"e /ar-e$ o!en $o aroun% 11a/ an% onsoli%a$es $o aroun% $"e N lun" !erio%' ii. Aroun% 1!/ 2!/, $"in#s "ea$ u! $o &ul&ill $"e >M $ren% &or $"e re/ainin# !or$ion o& $"e %aily ran#e'
!3
ICT TRADING CONCEPTS 1. Te TraderGs Trini$y - 4nner Cir%le TraderGs E%l2si>e O>er&o2g$ - O>ersold = S=: Con%ep$ - ay 11 a. Tra%er+s Trini$y i. )!!er >or$ion ?erbou#"$ one' Loo- &or s"or$s' ii. Mi%%le o& $"e Ran#e Fair alue ; E5uilibriu/ iii. Lower >or$ion ?ersol% Uone' Loo- &or buys' &. Mon$"ly Trini$y i. Loo- &or !erio%s w"ere !rie "as bro-en ou$ o& $"e Trini$y Ran#e $o $"e low an% "i#" usin# $"e %aily "ar$ as se$ione% o&& by Mon$"ly Trini$y' ii. Re&erene $"e 3 !reious !erio%s in $"e $i/e &ra/e $o loo ba- &or relean$ leels;in&or/a$ion' %. Trini$y Leels i. )!!er boun%ary !rie leels woul% si#ni&y an oerbou#"$ area an% we s"oul% loo- &or o!!or$uni$ies $o sell' ii. Lower boun%ary !rie leels woul% si#ni&y an oersol% area an% we s"oul% loo- &or o!!or$uni$ies $o buy' iii. Always see i& $"is is in a#ree/en$ or a#ains$ "i#"er $i/e &ra/e analysis' i>. >rie will $y!ially o/e ba- $o $"e &air alue ones in $"e en$er area o& $"e Tra%ers Trini$y' Try no$ $o $ra%e in $"e Fair .alue Uone'
d.
Bro-en Trini$y
!
<"eneer seein# a bro-en Trini$y, !re!are $"e li-eli"oo% o& a /a@or "i#" or low &or/in# in $"e /ar-e$!lae' ii. <"en !rie brea-s ou$ aboe $"e Trini$y, use Fib by $a-in# "i#" o& Trini$y an% brin# %own $o $"e low' <"en brea-in# $o $"e low, use Fib by $a-in# low an% brin# %own $o $"e low' T"e $wo leels $o &ous on are $"e 162 an% 200 e4$ension' T"ese $wo leels will usually "ae a rea$ion or orre$ion $o be use% $o #e$ $ar#e$s' iii. Loo- &or orre$ion a$ $"e brea-ou$ "i#";low !oin$' i>. 162 an% 200 E4$ension T"ese leels s"oul% "ol% $rue as $ar#e$s un$il $"ey are rea"e%' I& !rie %oes no$ rea" $"ese leels an% !ulls away, you /ay $"in- $"a$ $"e leels are no$ ali% any lon#er bu$ $"ey $en% $o s$ill "ol% $rue in $"e lon#er $i/e &ra/e' >. >reious ergen%e7 ien inerse orrela$ion o& !airs, w"en !rie on one "as lower lows, i$ is e4!e$e% $"a$ $"e o$"er s"oul% rea" "i#"er "i#"s' <"en $"is %oes no$ our, we "ae MT ier#ene' T"is is su##es$ie o& /a@or au/ula$ion;onsoli%a$ion in a%ane o& a /a@or /oe in $"e o!!osi$e %ire$ion' i.
2.
b.
Correla$ed 6air S/T B2llis i>ergen%e7 "oul% our a$ an%
!!
on&ir/ !re%e$er/ine% u!!or$ Leels' I& one !air &ails $o /a-e a lower low w"ile $"e o$"er suee%s, $"en e4!e$ bo$" !airs $o s"oo$ "i#"er a$ a -ey su!!or$ leel' i. <"en loo-in# a$ u!!or$ !lays or HbuysH onsi%er $"e !air $"a$ &ails $o /a-e $"e lower low res!e$iely' >re/ise be"in% $"is( T"e !air $"a$ &ails $o %ro! lower, i$ is bein# bou#"$ an% "ene, no$ willin# $o #o lower''' $"is is essen$ially He/an% in ?!era$ionH''' an$ii!a$e =i#"er !ries' ii. E)R;) is /a-in# "i#"er lows w"ile B>;) is /a-in# lower lows Buy E)R;)
c.
d.
Correla$ed 6air S/T Bearis i>ergen%e7 "oul% our a$ an% on&ir/ !re%e$er/ine% Resis$ane Leels' I& one !air &ails $o /a-e a "i#"er "i#" w"ile $"e o$"er suee%s, $"en e4!e$ bo$" !airs $o s"oo$ lower a$ a -ey su!!or$ leel' i. <"en loo-in# a$ Resis$ane !lays or HsellsH onsi%er $"e !air $"a$ &ails $o /a-e $"e "i#"er "i#"s res!e$iely' >re/ise be"in% $"is( T"e !air $"a$ &ails $o rally "i#"er, i$ is bein# sol% an% "ene, no$ willin# $o #o "i#"er''' $"is is essen$ially Hu!!ly in ?!era$ionH''' an$ii!a$e Lower !ries' ii. E)R;) is /a-in# "i#"er "i#"s w"ile B>;) is /a-in# lower "i#"s ell B>;)
Real E4a/!le o& Correla$e% >air MT ier#ene *B>;) !"
s' E)R;)( B> /a%e a "i#"er "i#" w"ile E)R &aile% $o /a-e "i#"er "i#"s' T"is si#nale% a reersal &or bo$" !airs'
<.
Trading A%%2m2la$ion @ is$ri&2$ion a. ?!!or$uni$ies $o $ra%e Au/ula$ion ; is$ribu$ion in%ia$or our w"en !rie %ier#es wi$" $"e %ire$ion o& $"e in%ia$or an% is su!!or$e% by $"e oerbou#"$;oersol% rie /a-es a lower low' ii. Au/ ; is$r &or sa/e !erio% /a-es a "i#"er low iii. . ien $i/e an% !rie a$ion, &in% o!!or$uni$y $o #o lon#
%.
Bearis @ Sor$ Se$2p i. >rie /a-es a "i#"er "i#" ii. Au/ ; is$ &or sa/e !erio% /a-es a lower "i#" iii.
i>.
+.
ien $i/e an% !rie a$ion, &in% o!!or$uni$y $o #o s"or$
/AC i>ergen%e a. Type 1 B2llis i>ergen%e - >rie /ee$s a lower low w"ile $"e MAC rea"es a "i#"er low' raw Fib &ro/ $"e swin# low w"ere $"e %ier#ene was es$ablis"e% $o $"e reen$ swin# "i#" an% loo- &or ?TE $o en$er lon#'
!$
b.
.
Type 1 Bearis i>ergen%e - >rie /ee$s a "i#"er "i#" w"ile $"e MAC rea"es a lower "i#"' raw Fib &ro/ $"e swin# "i#" w"ere $"e %ier#ene was es$ablis"e% $o $"e reen$ swin# low an% loo- &or ?TE $o #o s"or$'
4CT #rail (/arke$ :e>ie 3@1 H<'min* T"e ICT rail &or/s a$ $"e ?TE w"en $"ere is a Ty!e 2 Tren% Followin# ier#ene o& !rie s' $"e $o"as$i ?silla$or' ?silla$or se$$in# is 8 W 10, 8 W 3, lowin# W 3' a. B2y Se$2p - >rie &in%s a "i#"er low a$ $"e ?TE leel' For $"e sa/e !erio%, $"e in%ia$or &in%s a lower or e5ual low a$ $"e sa/e $i/e'
!%
b.
.
Sell Se$2p - >rie &in%s a lower "i#" a$ $"e ?TE leel' For $"e sa/e !erio%, $"e in%ia$or &in%s a "i#"er or e5ual "i#" a$ $"e sa/e $i/e'
4CT S$inger (ay 1 No$es H'07<0* T*+, 1 -. 2 C0-,. (STINGER) O, +,.4 +5, 0,6 789 89, 9:9 80, ;0, 8,-. <8 .,:,6 789 89, -.58' T96 50-,. 789 60==, +,. 79,, +5, 0,6 :-68 8,-. -. .,:,6 789 -.58' V,* +7,;<= -.58- ; +5, 8>-: ;;' a. Type 1 ? L7, =7 - +5, <8 9:9, =7 - 89,
"&
b.
c.
7.
6859685 (*,==7 =-,6 - 598) Type 2 ? T,-. ;==7-: .,:,-5, 9:9, =7 - +5, <8 =7, ,.-: - 89, 6859685 (:,,- =-,6 - 598) M68 +7,;<= 79,- 896 55<6 8 >,* 6<++8 -. ,668-5, =,,=6 -. OTE'
Interest Rate Yield Triad (M>,8 R,,7 #/2%) 2"@1! a. US 1& *, *,=. 6 87 5,=8,. 5<-8*’6 1& *, -. *,=.6' b. R6-: *,=.6 0,-6 ==*-: +5, (6-:) 6 89, 9:9, *,=.6 .7 8858- 8 89, 5<,-5*' c. L> ; .,:,-5, 0-: 89, 5,=8,. 5<,-5,6 -. 89, US -. *,=. d. T9, *,=. 898 76 <-7==-: 8 : =7, 6' 89, 89, 87 *,=.64 .,-8;,6 89, 5<,-5* 7959 7== , 88,0+8-: 8 : 9:9,' e. W9,- -, 5<,-5* :,6 9:9,4 8 69<=. ;;,58 89, 89, 5,=8,. 5<,-5* - 89, 60, 0--,'
"1
"2
ICT TRADING METHODS 1. '0 6ip 6er ay S%alping /e$od " ay 19 a. eys $o >ro&i$able al!s i. )n%ers$an% >rie A$ion T"eory ii. Fir/ ras! o& ey R Leels iii. Tra%e =i#"er Ti/e&ra/e Bias i>. Ta-e >ro&i$s Rou$inely ?&$en >. Tra%e ?ne or Two >airs a$ Ma4 &. Basi al!in# Buy Me$"o% i. I%en$i&y a -ey su!!or$ leel ii. An$ii!a$e a Ju%as win# Lower iii. Loo- &or ?TE aroun% -ey su!!or$ leel $o #o lon# i>. Ris- 20 !i!s >. Loo- &or MT ier#ene $o an$ii!a$e low o& %ay >i. Ta-e &irs$ !ro&i$ W 20 !i!s >ii. En$er on ouble Ta! >iii. Le$ seon% !or$ion run an% "ol% &or aily Ran#e i. Loo- &or Ti/e o& ay ?b@e$ie aroun% N?, L?C, an% 1Q(00 MT'
%.
d.
En$er on ouble Ta! i. Assu/in# $o$al ris- on $ra%e is 28 o& E5ui$y, Ta-e 708 o& !osi$ion o&& W V2030 !i!s &or 18 #ain *al!' Re/ainin# 18 !or$ion will be "el% &or $"e %aily ran#e' Loo- &or $i/e o& %ay ob@e$ie an% -ee! !ro$e$ie s$o! ou$si%e $"e %aily ran#e' ii. >ro$e$ie s$o! a$ Brea-een a&$er $a-in# !ro&i$ on &irs$ "al& o& $ra%e' Basi al!in# ell Me$"o% "3
I%en$i&y a -ey resis$ane leel ii. An$ii!a$e a Ju%as win# =i#"er iii. Loo- &or ?TE aroun% -ey resis$ane leel $o #o s"or$ i>. Ris- 20 !i!s >. Loo- &or MT ier#ene $o an$ii!a$e "i#" o& %ay >i. Ta-e &irs$ !ro&i$ W 20 !i!s >ii. En$er on ouble Ta! >iii. Le$ seon% !or$ion run an% "ol% &or aily Ran#e i. Loo- &or Ti/e o& ay ?b@e$ie aroun% N?, L?C, an% 1Q(00 MT i.
'.
Sor$ Term 4n$raday /e$od " ay '0 a. Me$"o% i. >lo$ EMA*0 an% EMA*1Q ii. Buy i#nals Loo- &or !erio%s w"ere $"e 1Q !erio% EMA is aboe $"e 0 !erio%s EMA' Buy !ro#ra/ w"en you see $"e wi%enin# o& $"e areas be$ween EMA iii. ell i#nals Loo- &or !erio%s w"ere $"e 1Q !erio% EMA is below $"e 0 !erio%s EMA' ell !ro#ra/ w"en you see $"e wi%enin# o& $"e areas be$ween EMA i>. ?ne !rie /a-es a &ra$al, swin# low %urin# Buy >ro#ra/, loo- &or o!en a&$er $"e &ra$al is &or/e% an% #o lon# one !rie a$$e/!$s $o /oe %own *Ju%as win# >. Ta-e O08 o&& w"en you an an% le$ $"e re/ainin# run' &. =i#"er Ti/e Fra/e $o!s As !rie /oes "i#"er, brin# s$o! $o V10 !i!s below $"e ne4$ &ra$al low one $wo near &ra$als &or/'
"
<.
Sing Trading /e$od " ay '1 a. ICT win# Tra%e e$u! i. Suar$erly "i&$ in Flows ii. ?l% =i#"s Lows iii. MT ier#ene on aily i>. Mar-e$ $ru$ure >. win# >oin$ Analysis >i. ?!$i/al Tra%e En$ry $ra$e#ies >ii. win# >ro@e$ion &or >ro&i$ ?b@e$ies
=i#"er Ti/e&ra/e Resis$ane >rie will swin# "i#"er in$o a -ey resis$ane an% $"e s"or$ will be $ra%e% on $"e "our an%;or 1"our "ar$ &or se$u!' T"e en$ry will be $a-en on $"e 7/in "ar$ Tur$le ou! ell an%;or ?TE ell >a$$ern' <"en %aily Fra$al swin# "i#" &or/s, loo- &or Ju%as rallies $o s"or$ in$o &or new en$ry !oin$s' ?o To Cap$2re Eplosi>e FO:E! 6ro)i$s - ay ' a.
+.
"!
&.
rie i. I%en$i&y $"e ?!enin# >rie &or $"e
""
INSI!RS TR"IN# $!T%&S 1' T"e Four Mar-e$ rou!s a' o/es$i Forei#n Bon% an% or In$eres$ Ra$es i' 30 ear Treasuries ii' 10 ear Treasuries iii' 7 ear Treasuries i' 2 ear Treasuries b' $o-s an% E5ui$ies i' ow $o-s ii' > 700 $o-s iii' NAAS $o-s, e$''' ' Co//o%i$ies an% Fu$ures i' CRB In%e4 ii' A#riul$ures iii' Finanials %' Currenies i' T"e ) ollar ii' Forei#n Currenies 2' In&la$ionary Eniron/en$ In$er/ar-e$ Rela$ions"i!s a' A >?ITI.E rela$ions"i! be$ween bon%s an% s$o-s b' An IN.ERE rela$ions"i! be$ween in$eres$ ra$es an% s$o-s ' Bon%s usually "an#e %ire$ion BEF?RE s$o-s %' An IN.ERE rela$ions"i! be$ween o//o%i$ies an% bon%s e' A >?ITI.E rela$ions"i! be$ween o//o%i$ies an% in$eres$ ra$es &' A >?ITI.E rela$ions"i! be$ween s$o-s an% o//o%i$ies #' Co//o%i$ies usually "an#e %ire$ion AFTER s$o-s' "' An IN.ERE rela$ions"i! be$ween $"e ) ollar an% o//o%i$ies 3' e&la$ionary Eniron/en$ In$er/ar-e$ Rela$ions"i!s a' An IN.ERE rela$ions"i! be$ween bon%s an% s$o-s b' A >?ITI.E rela$ions"i! be$ween in$eres$ ra$es an% s$o-s ' An IN.ERE rela$ions"i! be$ween o//o%i$ies an% bon%s %' A >?ITI.E rela$ions"i! be$ween o//o%i$ies an% in$eres$ ra$es e' A >?ITI.E rela$ions"i! be$ween s$o-s an% o//o%i$ies &' An IN.ERE rela$ions"i! be$ween $"e ) ollar an% o//o%i$ies
"#
'
Bi# Een$s in $"e /ar-e$ *i'e' E) risis an $"row er$ain rela$ions"i!s ou$ o& w"a-'
"$
PROFESSIONALS USE OF INDICATORS 1' Reisi$in# $"e Mar-e$ >ro&iles a' Consoli%a$ion Ran#e >ro&ile b' Brea-ou$ .ali% False >ro&ile ' Tren%in# >ro&ile %' Reersal >ro&ile 2' ?erbou#"$ ?ersol% a' Fous on ?ersol% in Mar-e$ >ro&iles $"a$ su##es$ !ries are bullis" is ?!$i/al b' ?erbou#"$ in Mar-e$ >ro&iles $"a$ su##es$ >ries are Bearis" is ?!$i/al' ' $o"*1,3,3 $"a$ says weDre oersol%'
3'
False i#nals ?erbou#"$ si#nals were no lon#er su##es$ie o& !rie /oe/en$s beause !rie $ra%e% o&& o& a "i#"er $i/e &ra/e su!!or$ leel'
'
6ri%e i>ergen%e Classi use wi$" in%ia$ors is $o loo- &or ier#ene be$ween !rie an% $"e in%ia$or' >rie rea"es new low bu$ "%
in%ia$or %oes no$ rea" a new low' T"is is a %ier#ene be$ween !rie an% in%ia$or'
'
Type 1 i>ergen%e (:e>ersal in Na$2re* >rie /oes o!!osi$e $"e "i#"er $i/e &ra/e $ren% an% %ier#es wi$" in%ia$or' >rie /oes o!!osi$e $"e "i#"er $i/e &ra/e $ren% an% %ier#es wi$" in%ia$or beause i$ is a si#n o& a reersal by na$ure' ' B2llis Type 1 i>ergen%e7 >rie &in%s a lower low w"ile $"e in%ia$or &in%s a "i#"er "i#" &or $"e sa/e !erio%
'
Bearis Type 1 i>ergen%e7 >rie &in%s a "i#" "i#" w"ile $"e in%ia$or &in%s a lower low &or $"e sa/e !erio%'
#&
'
Type ' Trend Folloing i>ergen%e ier#ene &ro/ in%ia$or w"en !rie &ollows $"e $ren% bu$ %ier#es wi$" in%ia$or' ' B2llis Type ' i>ergen%e7 >rie &in%s a "i#"er low w"ile $"e in%ia$or &in%s a lower low &or $"e sa/e !erio% ' Bearis Type ' i>ergen%e7 >rie &in%s a lower "i#" w"ile $"e in%ia$or &in%s a "i#"er "i#" &or $"e sa/e !erio%'
#1
MISC VIDEO NOTES 1' 3'1 In$eres$ Ra$e ?erlay Tu$orial a' $o-"ar$s'o/ E? iel%s b' Free C"ar$s >er&C"ar$ X)T2,X)T7,X)T10, X)T30 2' 3'2 In$eres$ Ra$e ?erlay Tu$orial a' MT /ar$ Money Tool b' E)R ; ) s' B> ; ) orrela$ion' ier#ene /ay in%ia$e &aor in one s' $"e o$"er' 3' '3 win# >ro@e$ion A!!lia$ion Fib Con&i#ura$ion 1'2Q >ro@e$ion a' aily =i#" ; Lows P08 "ane $"a$ $"e %aily "i#";low is es$ablis"e% in $"e &irs$ "ours o& $ra%in# a&$er N /i%ni#"$' b' Ran#e E4!ansion ; Con$ra$ion Cyle ou an $y!ially e4!e$ bi# ran#es on $i/e&ra/es a&$er s/all ran#es an% ie ersus' ' ?!en W =i s' Close a$ LowG i' <"en "i#";lose is loser in !ro4i/i$y a&$er wi%e ran#es as !rie #oes u!, i$Ds /ore li-ely;su##es$ie youDre a$ a $o!' ii' <"en low;lose is loser in !ro4i/i$y a&$er wi%e ran#es as !rie #oes %own, i$Ds /ore li-ely;su##es$ie youDre a$ a bo$$o/ %' 1'2Q >ro@e$ion Measure swin# low $o swin# low, oun$ $"e %ays' Mul$i!le $"a$ nu/ber by 1'2Q *roun% %own an% a%% $"a$ nu/ber o& bars $o $"e swin# "i#" in $"e /i%%le o& $"e $wo swin# lows' T"is s"oul% brin# you $o $"e ne4$ swin# "i#"' ' ay 1 T"e >ower o& T"ree Au/ula$ion >ro&i$ Release is$ribu$ion a' 3 Ma@or Mar-e$ Cyles i' Au/ula$ion >"ase /ar$ Money au/ula$in# lon#s or s"or$s ii' >ro&i$ Release >"ase Ran#e e4!ansion w"ere !ro&i$ is !er/i$$e% iii' is$ribu$ion >"ase /ar$ Money %is$ribu$es lon# or s"or$s b' T"e ?!en /ar$ /oney %is$ribu$es aboe $"e o!en an% au/ula$es below $"e o!en' ' 3 Bar >a$$ern i' ell W win# =i#" A "i#" wi$" $wo lower "i#"s on ea" si%e' Loo- $o #o s"or$ on $"e &irs$ bar a&$er $"e lose o& $"e 3r% lower "i#" bar' Loo- &or $"is a$ion a$ -ey resis$ane #2
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leels' ii' Buy W win# Low A low wi$" $wo "i#"er lows on ea" si%e' Loo- $o #o lon# on $"e &irs$ bar a&$er $"e lose o& $"e 3r% "i#"er low bar' Loo- &or $"is a$ion a$ -ey su!!or$ leels' >rie Tar#e$s i' N ?!en 12(00 MT *OAM ET ii' Lon%on Close 17(00 MT *12AM ET iii' An% 1Q(00 MT
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TRADE RULES 1' Ris- a' Ris- !er $ra%e will be li/i$e% $o 1'78 or less !er $ra%e or an oerall o!en ris- o& 1'78 or less b' .alue !er !i! %e$er/ine% by ris-( ris- !er $ra%e ; L a/oun$ Y X;!i! i' e'#' 7- aoun$, 28 ris- Y X100 ris-, L is 27 !i!s (( 100;27Y X;!i! or /ini lo$s 2' Tra%e En$ry ' Ti/e( Loo- &or en$ries near $"e o!en;lose o& a session o!$i/al en$ries are Lon%on o!en, N o!en, Lon%on lose %' A $"a$ is o!!osi$e $"e an$ii!a$e% !rie %ire$ion' En$er lon# on %own an%les' En$er s"or$ on u! an%les' 3' Ta-e >ro&i$ oals "' )sin# $"e &ib $o %raw ?TE, 12O an% 16Q8 are #oo% T> ones i' )sin# $"e &ib $o %raw ?TE, /oe $"e &ib so $"a$ $"e 708 is a$ $"e $o! o& $"e swin# *i& lon# an% use 1008 as T> @' Any on&luene o& /a@or R areas $"a$ /i#"$ e4is$, no$ neessarily a T> area bu$ so/e$"in# $o /oni$or ' E4i$ Moni$or $ra%e ris- un$il $ra%e is lose% -' 30708 o& $ra%e $a-en o&& a$ 30 !i!s in$o /oe, re/ain%er a$ ul$i/a$e T> l' E4i$ $ra%e i& $ra%e bias "an#es %urin# $ra%e or analysis su##es$ $ra%e is no lon#er ali% 7' $o! Loss /' L !lae 1020 !i!s below;aboe swin# use% &or Fib #
Moe L $o BE w"en >A $ra%es aboe;below $"e !reious swin# "i#";low use% $o %raw $"e Fib o' o no$ use $rail s$o!s, only /anual s$o!s RISK MANAGEMENT 1' =an%lin# Losses Inei$able raw%owns ay 13 a' 28 Ris- Neer ris- /ore $"an 28 !er $ra%e' b' Cu$$in# Ris- A$ &irs$ loss, u$ 28 ris- !er $ra%e $o 18 ris- !er $ra%e' I& onseu$ie losses on$inue, u$ ris- a#ain $o 0'78 !er $ra%e' '
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TRADING INSIDE THE RANGE 1' $'nt(ly Ran)e &vervie* ' D,8,0-, M-89=* R-:, M>,8 S8<58<, ' I.,-8;* M-89=* R-:, S7-:6/T<--: P-86 5' H:9=:98 K,* SR L,,=6 .' T., - D,58- ; 89, P0* 2' +ee,ly Ran)e &vervie* ' D,8,0-, W,,>=* R-:, M>,8 S8<58<, ' I.,-8;* W,,>=* R-:, S7-:6/T<--: P-86 5' H:9=:98 K,* SR L,,=6 .' T., - D,58- ; 89, P0* ,' L> ; N,7 OTE R,,6=6 ? A-85+8, 3' aily Ran)e &vervie* ' D,8,0-, C<,-8 R-:, M>,8 S8<58<, ' I.,-8;* D=* R-:, S7-:6/T<--: P-86 5' H:9=:98 K,* SR L,,=6 M-89=* ? W,,>=* .' T., - D,58- ; 89, S7-: P-8 ,' L> ; N,7 OTE R,,6=6 ? A-85+8, ' "sian Ran)e ' N8, 89, I-8= R-:, H:9 L7 ' N7 F5<6 8 H:9, M>,8 T,-. 5' N8, K,* SR L,,=6 O=. H:96 L76 .' T., 89, D,58- ; D=* S7-: P-8 ,' A-85+8, L-.- S8+ R., ? F., I8 !' "R -"vera)e aily Ran)e ' A=:- T., E+,588- 8 !?D* ADR ' O-5, T., E-8* ? S8=> ADR O,58,6 5' B=,-. T0, ; D* P5, T9,* .' A-85+8, P;8 O,58,6 N, ADR ,' E+,58 1!@&& ? 1"@&& GMT -. ADR C-,:,-5,6 O89, T,59-5=6 8 C-;0 P;8 T>-: O,58,6 "' !ntry /'ncept ' F5<6 - O+80= S,8<+6 ' A++=* P7, ; T9,, R-:, E+-65' I; B<==694 -85+8, B->6 8 SELL ;68 .' I; B,694 -85+8, B->6 8 R==* <+ ;68 ,' E+=- 89, R.6 ; O=. S7-:6 E+,58 P88,-6 8 F0 8 C-;0 E-8,6 (H:9 P=8* T.-: P88,-6 V.,) #' r'it &bective ' I; ADR 6 1&& ++64 8>, +;8 8 $& ++6 #"
A=7*6 => 8 S5=, O<8 ; T.,6 5' ADR .,6 NOT 9, 8 , ;<=;==,. .' D,,=+ P;,66-= M-.6,8 - T:,8-: (P,6,8- ; C+8= 6 := 1) ,' L,, G,,. <8 ; 89, P5,66 $' r'essi'nal &rder laceent ' T* K,,+-: E-8* E8 8 L08 O.,6 ' M>,8 O.,6 , L68 D859 P8,585' D N8 8* 8 :,8 89, ,68 E-8* P5, .' D N8 8* 8 ,8 8 89, ,* H:9 L7 ,' A=7*6 F58 89, S+,. P=<6 2?3 ++6 ICT TERMS AND ABBREVIATIONS '
Cer$ain wor%s an% !"rases, below, are italicized $o in%ia$e $"a$ $"ey are %e&ine% se!ara$ely, elsew"ere in $"e lossary' In $"e &ollowin# %e&ini$ions, $wo abbreia$ions are use% &re5uen$ly( i.e', /eanin# H$"a$ isH an% e.g., /eanin# H&or e4a/!leH' A au/ula$ion smart money buyin# ei$"er *1 $o en$er lon# !osi$ions, or *2 $o oer s"or$ !osi$ions, a$ or near a swing low *i'e', smart money Hbuyin# lowH A *or A; accumulation an%;or distribution AR *see average daily range AU *see Asian Kill Zone an$ii!a$ory $ra%e analysis !"ase top-down analysis, !"ase 2( seasonal $en%enies, SM divergences *yiel%s, !S"#, e$', $% re!or$, an% -ey S&' leels Asian ill Uone no/inally Qa/12!/ o(yo time *$"is $i/e !erio% /ay be e4!an%e% a$ $"e %isre$ion o& $"e $ra%er $"is is one o& (ill zones Asian ran#e $"is $er/ /ay re&er $o *1 $"e Pa/2!/ o(yo time !erio%, *2 $"e )-* !rie ran#e wi$"in $"a$ !erio%, or *3 price action wi$"in $"a$ ) * ran#e Asian session Pa/O!/ o(yo time *a lowolu/e $ra%in# session, $y!ially "ara$erie% by !rie consolidation wi$"in a res$ri$e% ran#e ATR *see average true range A) A);) !air Aussie ni-na/e o& $"e A);) !air
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aera#e %aily ran#e *AR $"e aera#e o& $"e /os$ reen$ %aily )-* ran#es $y!ially, $"e las$ 7 %aily )-* ran#es are aera#e% $o yiel% $"e A"' &or %ay 6 aera#e $rue ran#e *ATR %aily A' is si/ilar $o average daily range +A"', e4e!$ $"a$ A' aoun$s &or !rie #a!s *e'#', Sunday gaps, bu$ A"' %oes no$ B ban-s *or Hbi# ban-sH $o!$ier ines$/en$ ban-s, !ar$ii!an$s in $"e interban( networ(, en#a#e% in "i#"olu/e urreny $ra%in# see lis$ on !a#e baoo-a *or ICT baoo-a Michael so/e$i/es re&ers $o a s$an%ar% type oscillator divergence as a Hbaoo-aH, $o on$ras$ i$ wi$" $"e /ore !ower&ul stinger BE *see brea(-even bear &la# a &airly $i#"$, &airly s"or$%ura$ion consolidation !a$$ern &or/e% a$ $"e bo$$o/ o& a s"ar! %own/oe, /ar-in# a !ause in $"e %own/oe bias *see directional bias bi# &i#ure *see figure brea-een $"e !rie a$ w"i" losin# a !osi$ion *ei$"er /anually, or by bein# s$o!!e%ou$ resul$s in ero !ro&i$ an% ero loss BT Bri$is" u//er Ti/e *BTY .M Z1, $"e $i/e one in $"e )'' an% Irelan% be$ween Mar" an% ?$ober see *ondon time bull &la# a &airly $i#"$, &airly s"or$%ura$ion consolidation !a$$ern &or/e% a$ $"e $o! o& a s"ar! u!/oe, /ar-in# a !ause in $"e u!/oe buy !ro#ra/ a $ren%in# mar(et profile in w"i" $"e directional bias is u! *bullis", an% $ra%es in $"e %ire$ion o& $"e $ren% are lon# *buys buy one #ien ei$"er *1 a )/ bullis" bias, or *2 a ran#in# /ar-e$, a buy one is $"e !rie ran#e below $"e !io$ +0, or below $"e fair-value one C able one o& $"e ni-na/es o& $"e B>;) !air en$ral ban- $"e en$i$y res!onsible &or oerseein# $"e /one$ary sys$e/ o& a na$ion, or #rou! o& na$ions see lis$ on !a#e CFTC *see $ommodity /utures rading $ommission C"ris Lori a$"le$e, &un% /ana#er, Fore4 $ra%er, an% $ea"er;/en$or
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o&$en /en$ione% !osi$iely by Michael Ci$y o& Lon%on *or T"e Ci$y, or T"e 5uare Mile $"e &inanial %is$ri$ in Lon%on lassi Asian session buy si#nal a si#nal $o #o lon# a&$er *1 a la$e 12 session !rie %eline, an% *2 an Asian session !rie boune o&& a -ey su!!or$ leel lassi Asian session sell si#nal a si#nal $o #o s"or$ a&$er *1 a la$e 12 session !rie rise, an% *2 an Asian session !rie boune o&& a -ey resis$ane leel oil e4!ansion !a$$ern a consolidation !a$$ern *$"e oil w"i" is &ollowe% by a brea-ou$ *$"e e4!ansion w"ose e4$en$ %e!en%s on $"e %i/ensions o& $"e oil o//erials lar#e *&u$ures;o!$ions "e%#ers w"ose !osi$ion sies re5uire re!or$in# $o $"e $/$3 $"eir ne$ *a##re#a$e !osi$ion a!!ears in $"e $% re!or$ Co//i$/en$ o& Tra%ers *re!or$ wee-ly $/$ re!or$ on !osi$ions "el% by 3 lasses o& $ra%ers in in%ii%ual &u$ures an% o!$ions on$ra$s *inl' urrenies Co//o%i$y Fu$ures Tra%in# Co//ission )'' re#ula$or o& o//o%i$y &u$ures an% s!o$ Fore4 $"e $/$ o/!iles an% !ublis"es $"e $% re!or$ on&luene ourrene o& $wo or /ore si#ni&ian$ $e"nial leels *e'#', a !io$ leel an% an %4 a$ $"e sa/e *or nearly $"e sa/e !rie on a "ar$ onsoli%a$ion a $i/e !erio% *onsoli%a$ion !erio% in w"i" !rie /oes in a narrow ran#e *onsoli%a$ion ran#e, $y!ially boun%e% by s"or$$er/ S&' leels orrela$e% !airs $wo urreny !airs w"ose !ries /oe rou#"ly in $an%e/ *e4a/!le( E)R;) an% B>;) ano$"er e4a/!le( A);) an% NU;) C?T *or C?T re!or$ *see $ommitment of raders re!or$ CRB In%e4 Co//o%i$y Resear" Bureau In%e4 o& 1P o//o%i$ies *a#riul$urals, /e$als, oil #as $"e In%e4 is use% as one ele/en$ o& intermar(et analysis %ay $ra%e *or in$ra%ay $ra%e a $ra%e in w"i" $"e en$ry an% e4i$ are e4!e$e% $o our wi$"in $"e sa/e $ra%in# %ay, an% $"e !ro&i$ $ar#e$ is 30 100 !i!s
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*see drawdown %e/o a !ra$ie !la$&or/, !ra$ie aoun$, or !ra$ie $ra%e, e$' %ire$ional bias urren$ %ire$ion o& !rie /oe/en$ *as %e$er/ine% on )/5s, %ee/e% $o be $"e $ra%eable $ren% *see buy program, an% sell program %is$ribu$ion smart money sellin# ei$"er *1 $o en$er s"or$ !osi$ions, or *2 $o li5ui%a$e lon# !osi$ions, a$ or near a swing high *i'e', s/ar$ /oney Hsellin# "i#"H %o@i a an%les$i- "ain# a ery s/all real bo%y *or no real bo%y, wi$" u!!er an%;or lower wi-s o& any len#$" i$ o&$en in%ia$es a swing high or swing low %ouble$a! #ien an %4 re$rae/en$ &ro/ a S) *or S*, a %ouble$a! inoles $a-in# 1s$ !ro&i$ a$ $"e S) *or S*, an% 2n% !ro&i$ a$ a "i#"er !ro&i$ $ar#e$ %raw%own a /easure o& aoun$ %e!le$ion %ue $o au/ula$e% losses %u/b /oney *see street money E ET Eas$ern ayli#"$ Ti/e *ETY .M , $"e $i/e one in $"e eas$ern )'' an% Cana%a be$ween Mar" an% Noe/ber see 1ew 2or( time EJ E)R;J> !air EMA *see exponential moving average e5ui$y /ana#e/en$ *see ris( management ET Eas$ern $an%ar% Ti/e *ETY .M 7, $"e $i/e one in $"e eas$ern )'' an% Cana%a be$ween Noe/ber an% Mar" see 1ew 2or( time ET Eas$ern Ti/e in $"e )'' an% Cana%a +1ew 2or( time ET is ei$"er 4S or 4" , %e!en%in# on $i/e o& year E) E)R;) !air euro !ro!er na/e o& $"e Euro!ean )nion sin#le urreny also, one o& $"e ni-na/es o& $"e E)R;) !air e4!onen$ial /oin# aera#e a /oin# aera#e o& %a$a &ro/ nnu/ber o& !erio%s, wei#"$e% e4!onen$ially $o #ie #rea$er wei#"$ $o /ore reen$ %a$a F &air alue $"e /e%ian !rie in a !reious )-* !rie ran#e *e'#', a !reious aily !rie ran#e, or a rader5s rinity !rie ran#e see no-man5s land &ib s"or$"an% &or /ibonacci tool, or Fibonai leel *no$e( in o//on
$&
usa#e, Fibonai is so/e$i/es a!i$alie% Fibonai e4$ension on$inua$ion o& a /ibonacci retracement sale, beyon% $"e 1008 re$rae/en$ leel, $y!ially $o 12O'28, 161'Q8, 2008, e$' Fibonai re$rae/en$ a sale &or /easurin# re$rae/en$s as !eren$a#es o& a !rie ran#e, $y!ially 08, 23'68, 3Q'28, 708, 61'Q8, O6'8 an% 1008 Fibonai $ool a !rie/easurin# $ool w"i" %ii%es a !rie ran#e in$o !eren$a#es *see /ibonacci retracement, an% /ibonacci extension &iber one o& $"e ni-na/es o& $"e E)R;) !air &i# s"or$"an% &or figure &i#ure !rie o& $"e &or/ 4'4400 *also alle% fig, big figure, &ull &i#ure, an% 665s &ra$al *%e&'1 one o& $"e /any !rie !a$$erns w"i" re!ea$ $"e/seles in all /ar-e$s, on all time frames &ro/ 1/inu$e *or lower $o 1Mon$" *or "i#"er &ra$al *%e&'2 a !a$$ern o& 7 onseu$ie an%les, in w"i" $"e en$er an%le "as $"e "i#"es$ "i#" o& $"e 7 an%les, or $"e lowes$ low o& $"e 7 an%les &ra$al "i#" in a 7an%le fractal !a$$ern, i& $"e en$er an%le "as $"e "i#"es$ "i#" o& $"e 7 an%les, $"en $"a$ "i#" is a &ra$al "i#" &ra$al low in a 7an%le fractal !a$$ern, i& $"e en$er an%le "as $"e lowes$ low o& $"e 7 an%les, $"en $"a$ low is a &ra$al low &un%a/en$al analysis analysis o& /aroeono/i &a$ors *in$eres$ ra$es, in&la$ion, >, une/!loy/en$, e$' w"i" in&luene lon#$er/ urreny $ren%s # #eneral /ar-e$ analysis !"ase top-down analysis, !"ase 1( analysis o& in$eres$ ra$es, !S"#, Treasuries, s$o- in%ies, $'7 8ndex, an% #ol% an% oil J B>;J> !air LT oo% Lu- an% oo% Tra%in# *si#na$ure use% by Michael, an% o$"ers MT reenwi" Mean Ti/e, $"e worl%Ds o//erial re&erene $i/e one, $o w"i" all o$"er $i/e ones are rela$e% by Ho&&se$sH *e'#', MT1, MTZ1, e$' MT !io$s see *ondon pivots
$1
) B>;) !air ? = *or =, or =, or =; *see head-and-shoulders top =1, =, 1, e$' "ar$ $i/e&ra/es *1"our "ar$, "our "ar$, aily "ar$, e$' e4!an%e% lis$( /1, /7, /17, /30, =1, =2, =3, =, =6, =Q, 1, <1, M1 "a//er a an%les$i- *o& ei$"er olor "ain# a s"or$ real bo%y, a ery s"or$ u!!er wi-, an% a lon# lower wi- i$ $y!ially ours &ollowin# a %own/oe "an#in# /an a an%les$i- i%en$ial $o a hammer , e4e!$ $"a$ i$ $y!ially ours &ollowin# an u!/oe "ea%an%s"oul%ers $o! an 8) *$"e H"ea%H !ree%e% by, an% &ollowe% by, a lower 8) or a *) *$"e H"ea%H !ree%e% by, an% &ollowe% by, a lower *) == "i#"er "i#" "i%%en %ier#ene $ren%&ollowin# %ier#ene *see type divergence "i%%en ?TE in a s$ron# %own$ren%, a !rie /oe &ro/ one S* $o $"e ne4$ S* /ay resul$ in a H"i%%enH %4 re$rae/en$ *or, in a s$ron# u!$ren%, use S)5s "i#" !robabili$y !rie !a$$erns sele$e% an%les$i- !a$$erns an% "ar$ !a$$erns w"i" reliably si#nal !rie %ire$ion see lis$ on !a#e "i#"er $i/e &ra/e &or /os$ %ay $ra%ers an% s"or$$er/ $ra%ers, )/ /eans a $i/e &ra/e "i#"er $"an 1"our *e'#', "our, aily,
$2
!ur!or$s $o reeal er$ain $ren%s or $en%enies re#ar%in# &u$ure !ries insi%e %ay a %aily an%le wi$" a lower "i#", an% a "i#"er low, $"an $"e !reious %aily an%le usually i$ si#nals a $ren% on$inua$ion ins$i$u$ional leel *or ins$i$u$ional !rie leel !rie o& $"e &or/ 4'4420 *$"e 6 level , or 4'44Q0 *$"e 96 level in$erban- ne$wor- a #rou! o& $o!$ier ban(s, ele$ronially lin-e% $"rou#" EB or Reu$ers &or urreny $ra%in# a/on# $"e/seles an% wi$" /a@or lien$s in$er/ar-e$ analysis analysis o& orrela$ions be$ween in$eres$ ra$es, e5ui$ies, o//o%i$ies an% urrenies %urin# on%i$ions o& in&la$ion or %e&la$ion in$er/e%ia$e$er/ "i#" a fractal high !ree%e% by, an% &ollowe% by, a lower fractal high in$er/e%ia$e$er/ low a fractal low !ree%e% by, an% &ollowe% by, a "i#"er fractal low iner$e% "ea% an% s"oul%ers bo$$o/ an 8* *$"e H"ea%H !ree%e% by, an% &ollowe% by, a "i#"er 8* or a ** !ree%e% by, an% &ollowe% by, a "i#"er ** IT= *see intermediate-term high ITL *see intermediate-term low JT Ja!anese $an%ar% Ti/e *JTY .M ZP, $"e $i/e one, yearroun%, $"rou#"ou$ Ja!an see o(yo time Ju%as swin# a &alse !rie /oe *by smart money $o run s$o!s an% lure street money $o $"e wron# si%e o& $"e /ar-e$, a"ea% o& $"e real *o!!osi$e /oe 5 en Rober$s $ra%in# an% li&es$yle #uru, au$"or, an% le$urer Michael re%i$s en Rober$s wi$" $"e 628OP8 re$rae/en$ one!$ *w"i" Mi"ael alls %4 -ey ;R *or R *see (ey support and resistance levels -ey su!!or$ an% resis$ane leels S&' leels i%en$i&ie% on )/ "ar$s *=, 1, <1, an% $"en $rans&erre% $o $"e */ "ar$s bein# analye% or $ra%e% -ill one one o& "i#"!robabili$y $i/e !erio%s *$y!ially 2 "ours ea"
$3
in w"i" $o &in% $ra%e se$u!s usin# 8$ $ools see A-KZ, *%-KZ, 12%-KZ, an% *$-KZ iwi ni-na/e o& $"e NU;) !air U *see (ill zone L lar#e ran#e %ay a %ay w"ose )-* !rie ran#e *$"e %ayDs "i#" /inus $"e %ayDs low subs$an$ially e4ee%s $"e %ayDs A"' lar#e s!es lar#e *&u$ures;o!$ions s!eula$ors w"ose !osi$ion sies re5uire re!or$in# $o $"e $/$3 $"eir ne$ *a##re#a$e !osi$ion a!!ears in $"e $% re!or$ Larry
$
Lon%on $i/e .M *?$oberMar", or 7S Y.M Z1 *Mar"?$ober No$e( Michael always re&ers $o *ondon time as .M , re#ar%less o& $i/e o& year lon#$er/ "i#" an in$er/e%ia$e$er/ "i#" !ree%e% by, an% &ollowe% by, a lower in$er/e%ia$e$er/ "i#" lon#$er/ low an in$er/e%ia$e$er/ low !ree%e% by, an% &ollowe% by, a "i#"er in$er/e%ia$e$er/ low loonie ni-na/e o& $"e );CA !air lower $i/e &ra/e &or /os$ %ay $ra%ers an% s"or$$er/ $ra%ers, */ /eans a $i/e &ra/e lower $"an 1"our *e'#', 30/inu$e, 17/inu$e, or 7/inu$e LTF *see lower time frame LT= *see long-term high LTL *see long-term low / MA *or MA *see moving average MAC a momentum indicator w"i" $ra-s $"e %i&&erene be$ween $wo 4MA5s, o/!ares $"a$ %i&&erene $o a $"ir% 4MA, an% s"ows $"e resul$ as a "is$o#ra/ /a@or /ar-e$ analysis *MMA *see inter-mar(et analysis /ar-e$ &low /ar-e$ %ire$ion *$ren% in%ia$e% by $"e /os$ reen$ breao& a fractal high or low on a )/ "ar$ *=1, =, 1 o/!are $o mar(et structure /ar-e$/a-er a $o!$ier ban( , a /e/ber o& $"e interban( networ( *w"ere $"e urreny /ar-e$ is li$erally H/a%eH see ban(s, an% smart money /ar-e$/a-er !ro&ile /ar-e$ !ro&ile one o& urren$ /ar-e$ eniron/en$s( consolidation ran#e !ro&ile, brea-ou$ *real or &alse !ro&ile, $ren%in# !ro&ile, an% reversal profile /ar-e$ s$ru$ure an analysis /e$"o% base% on !a$$erns o& S)5s, S*5s, 8)5s, 8*5s, *)5s an% **5s on higher time frame +)/ "ar$s *=, 1, an% <1 MF *see mar(et flow Mi"ael Mi"ael =u%%les$on *sreenna/e InnerCirleTra%er, e$eran A/erian s$o-;o//o%i$y;urreny $ra%er, on$ribu$or;$ea"er on $"e Baby!i!s si$e /i% &i# *see mid figure
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/i% &i#ure !rie o& $"e &or/ 4'4470 *$"e :6 level Millionaire Tra%ersD uil% Michael5s $"rea% on $"e H"ow Me $"e Money ay$ra%in#H &oru/, e/!"asiin# a !lanbase% a!!roa" $o usin# $"e 8$ $ools MM %e&'1 *see mar(et-ma(er MM %e&'2 *see money management MMA /a@or /ar-e$ analysis *see inter-mar(et analysis MM> *see mar(et-ma(er profile /o/en$u/ in%ia$or a $e"nial indicator *e'#', MA$" w"i" /easures $"e s$ren#$" o& a !reailin# $ren% i$ an be use% ins$ea% o& a !rie oscillator /oney /ana#e/en$ $"e !ro!er use *in !lannin# a $ra%e o& !osi$ion sie, stop-loss, an% '&' *rewar%;ris- ra$io in or%er $o li/i$ losses an% !resere a!i$al /oin# aera#e *or si/!le /oin# aera#e $"e aera#e o& $"e %a$a &ro/ $"e /os$ reen$ nnu/ber o& !erio%s, no$ wei#"$e% *o/!are $o 4MA MR1, MR2, e$' in$er/e%ia$e resis$ane leels *o/!u$e% &ro/ !io$ !oin$ &or/ulas see 8$ 0ivot-0oint /ormulas on !a#e M *see mar(et structure M1, M2, e$' in$er/e%ia$e su!!or$ leels *o/!u$e% &ro/ !io$!oin$ &or/ulas see 8$ 0ivot-0oint /ormulas on !a#e MT a re$ail $ra%in# !la$&or/, liense% worl%wi%e $o bro-ers, !o!ular &or i$s MSL sri!$in# lan#ua#e allowin# rea$ion o& EADs, us$o/ indicators, an% sri!$s MT *see Millionaire raders5 .uild N ne#a$iely orrela$e% !airs $wo urreny !airs w"ose !ries /oe *rou#"ly in o!!osi$e %ire$ions *e4a/!le( E)R;) an% );C=F nes$e% ?TE an %4 wi$"in an %4 a s/aller +*/ !rie swin# wi$" an %4 re$rae/en$, nes$e% wi$"in a lar#er +)/ !rie swin# wi$" i$s *lar#er %4 New or- ?!en Qa/ 1ew 2or( time, $"e be#innin# o& $"e nor/al business %ay in New or- New or- ?!en ill Uone no/inally Oa/Pa/ 1ew 2or( time *$"is $i/e !erio% /ay be e4!an%e% a$ $"e %isre$ion o& $"e $ra%er $"is is one o& (ill zones New or- !io$s %aily !io$ leels base% on /i%ni#"$ 1ew 2or( time as
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$"e s$ar$ o& ea" Fore4 $ra%in# %ay New or- session Qa/7!/ 1ew 2or( time $"e &irs$ "ours o& $"is session *$"e *&12 overlap are $y!ially $"e "i#"es$olu/e !erio% o& $"e $ra%in# %ay New or- $i/e 4S Y.M 7 *NoMar", or 4" Y.M *Mar" No No$e( Michael always re&ers $o 1ew 2or( time as 4S , re#ar%less o& $i/e o& year news s"or$"an% &or s"e%ule% eono/i %a$a releases, w"ose release %a$es;$i/es are -nown in a%ane, an% w"ose /e$ris are &oreas$ in a%ane NF> *see 1on-/arm 0ayroll re!or$ Ni- .an Nie ori#ina$or o& $"e one!$ o& hidden divergence *w"i" Mi"ael re&ers $o as type divergence no /anDs lan% on a rader5s rinity "ar$, no/anDs lan% is $"e /i%%le 278 o& $"e *!reious )-* !rie ran#e $"e en$er o& $"is one is $"e fairvalue !rie NonFar/ >ayroll *re!or$ )'' e/!loy/en$ re!or$ *o&$en a /ar-e$ /oer, release% on $"e &irs$ Fri%ay o& ea" /on$" by $"e )'' e!ar$/en$ o& Labor N? *see 1ew 2or( %pen N?U *see 1ew 2or( %pen Kill Zone O ?B;? overbought or oversold *$"is $er/ usually re&ers $o rea%in#s #enera$e% by a !rie oscillator ?=LC *or ?=LC ?!en, =i#", Low an% Close *$"e !ries w"i" are %is!laye% #ra!"ially on ea" an%le, or ea" !rie bar ?I *see open interest ?nes"o$one-ill 8$ sni!er $a$i( Lie in wai$ *&or a se$u!, $a-e ai/ *a$ $"e se$u!, !ull $"e $ri##er *en$er $"e $ra%e, nail $"e $ar#e$ *olle$ !i!s o!en in$eres$ $"e nu/ber o& o!en on$ra$s *$"ose no$ ye$ o&&se$ or %eliere% in a s!ei&i o//o%i$y;%eliery /on$" one o& $"e /e$ris in a $% re!or$ o!en $ra%e rea$ion !"ase top-down analysis, !"ase ( /ar-e$ &ailure $o /oe, !rie re@e$ion a$ S&', news releases, #lobal een$s, an%;or $ra%er issues o!$i/al $ra%e en$ry en$ry one be$ween $"e 628 an% OP8 re$rae/en$
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leels no$e $"a$ 628 an% OP8 are no$ s$an%ar% fib retracement leels retracement leels ?TE *see optimal trade entry osilla$or a $e"nial indicator *e'#', *e'#', 'S8, stochastics, or ;<-' w"i" !lo$s !rie as a !eren$a#e !eren$a#e *&ro/ 08 $o 1008 o& so/e ariable ou$si%e %ay wi$" a %own lose an en#ul&in# aily an%le wi$" a lower lose i& on&ir/e% by an oversold indicator, oversold indicator, i$ si#nals a reersal $o $"e u!si%e oerbou#"$ a !rie w"i" a!!ears $o "ae /oe% $oo &ar oun$er $o a bearis" bias *as *as in%ia$e% by !io$s, !io$s, rader5s rinity, or any o& arious oscillators oersol% a !rie w"i" a!!ears $o "ae /oe% $oo &ar oun$er $o a bullis" bias *as in%ia$e% in%ia$e% by !io$s, rader5s rinity, or any o& arious oscillators 6 > *or >>, or C> !io$, or !io$!oin$, or en$ral !io$ *o/!u$e% &ro/ !io$!oin$ &or/ulas &or/ulas see see 8$ 0ivot-0oint /ormulas on !a#e >A *see price action >a/an slan# $er/ re&errin# $o smart money H#obblin# u!H s$o!s *li-e >aMan #obblin# u! !a%o$s in $"e 1PQ0Ds ara%e #a/e >BJ !eanu$ bu$$er an% @elly >er& C"ar$ >er&or/ane C"ar$ *$o-C"ar$s'o/, *$o-C"ar$s'o/, $ra-s 8"an#e in !rie oer a sele$e% $i/e !erio%, s$ar$in# s$ar$in# &ro/ a 08 baseline baseline see lis$ on !a#e !in s"or$"an% s"or$"an% &or pin-bar !inbar a an%les$i-, an%les$i-, o& ei$"er olor olor,, "ain# a lon# u!!er u!!er or lower wi*or bo$", si#nalin# /ar-e$ H"esi$a$ionH in $"e %ire$ion o& $"e lon# wi- !osi$ion $ra%e a $ra%e $ra%e in w"i" $"e en$ry an% e4i$ are are e4!e$e% e4!e$e% $o our wee-s, /on$"s *or een years a!ar$, an% $"e !ro&i$ $ar#e$ is 1,000 !i!s or /ore !oun% in&or/al in&or/al na/e o& $"e $"e )'' urreny urreny *!ro!er *!ro!er na/e( !oun% also, one o& $"e ni-na/es o& $"e B>;) !air sterling >ower o& T"ree en$ry i//e%ia$ely a&$er $"e lose o& a three-bar high *or low a$ a -ey resis$ane *or su!!or$ leel on a aily "ar$ *a%ane% $e"ni5ue !rie a$ion a$ion a /e$"o% /e$"o% o& analyin# analyin# an%;or $ra%in# any any /ar-e$, base% base% only on !rie !a$$erns an% si/!le !rie /easurin# $ools, bu$ e4lu%in# indicators !ro&i$ release release !"ase in a $y!ial $y!ial accumulation&distribution senario, $"is
$$
is $"e !rie ran#e be$ween $"e accumulation !"ase an% $"e distribution !"ase >ro Tra%ersD Club one o& Michael5s $"rea%s on $"e HNewbie Islan%H &oru/, %eo$e% $o %aily reiews an% 8$ $ool $ool a!!lia$ion >TC *see 0ro raders5 raders5 $lub !ull a &ib use a Fibonai Fibonai $ool $o %elinea$e %elinea$e a !rie !rie swin# *&ro/ *&ro/ ini$ial !rie $o &inal &inal !rie s"owin# s"owin# /ibonacci retracement leels an% /ibonacci retracement leels extension leels : R1, R2, R3, e$' resis$ane leels *o/!u$e% &ro/ !io$!oin$ &or/ulas see 8$ 0ivot-0oint /ormulas on !a#e ran#e on$ra$ion $"e $en%eny &or a series o& large range days $o be &ollowe% by one or /ore small range days ran#e e4!ansion $"e $en%eny &or a series o& small range days $o be &ollowe% by one or /ore large range days re&le$ion !a$$ern !a$$ern a !a$$ern in w"i" !rie re$raes beyon% $"e %4 one, one, $"e 1008 fib retracement, retracement, an% $"e 12O8 fib extension, rea$in# a HreerseH %4 re#ular %ier#ene $ren%reersal %ier#ene *see type = divergence reersal !ro&ile an early%ay !rie swin# *u! or %own, $a-in# ou$ a -ey aily or o r
%$ RI *rela$ie s$ren#$" in%e4 one o& 3 !rie oscillators * 'S8, 'S8, stochastics, an% ;<-' inlu%e% in $"e 8$ $oolse$ $oolse$ use one o& $"ese *or MA$" S 1, 2, 3, e$' su!!or$ leels *o/!u$e% &ro/ !io$!oin$ &or/ulas see 8$ 0ivot-0oint 0ivot-0oint /ormulas on !a#e sal! *or sal!in# $ra%e a $ra%e in w"i" $"e en$ry an% e4i$ are e4!e$e% $o our seon%s or /inu$es a!ar$, an% $"e !ro&i$ $ar#e$ is 30 !i!s or less sear" an% %es$roy a smart money $a$i *w"i" say re$ail $ra%ers an i/i$a$e o& sys$e/a$ially #unnin# stops aboe an% below a consolidation ran#e seasonal $en%enies $en%enies o& /any /ar-e$s *urrenies, e5ui$ies, o//o%i$ies, bon%s $o /a-e *)5s or **5s a$ s!ei&i $i/es o& year sell !ro#ra/ a $ren%in# mar(et profile in w"i" $"e directional bias is %own *bearis", an% $ra%es in $"e %ire$ion o& $"e $ren% are s"or$ *sells sell one #ien ei$"er *1 a )/ bearis" bearis" bias, or *2 a ran#in# /ar-e$, a sell one is $"e !rie ran#e aboe $"e !io$ +0, or aboe $"e fair-value one session %aily !erio% o& "i#"olu/e Fore4 $ra%in# in a !ar$iular /ar-e$, #enerally Qa/7!/ loal $i/e *see Asian session &or an e4e!$ion $o $"is rule = *see swing high s"or$er $i/e &ra/e a $i/e &ra/e s"or$er $"an $"e $i/e &ra/e bein# %isusse% Hs"or$er $i/e &ra/eH is no$ neessarily synony/ous wi$" lower time frame +*/ s"or$$er/ "i#" a fractal high w"i" "as no$ eole% in$o an 8) or or an *) s"or$$er/ low a fractal low w"i" "as no$ eole% in$o an 8* or an ** s"or$$er/ $ra%e a $ra%e in w"i" $"e en$ry an% e4i$ are e4!e$e% $o our wi$"in 2 $o 7 $ra%in# %ays, an% $"e !ro&i$ $ar#e$ is 100300 !i!s L %e&'1 *see stop-loss L %e&'2 *see swing low M *see smart money MA si/!le /oin# aera#e *see moving average s/all ran#e %ay a %ay w"ose )-* !rie ran#e *$"e %ayDs "i#" /inus $"e %ayDs low &alls subs$an$ially s"or$ o& $"e %ayDs A"' s/ar$ /oney lar#e ban(s an% er$ain o$"er ins$i$u$ions w"i" "ae
%&
in&or/a$ion on res$in# *s$o! an% li/i$ or%ers in&or/a$ion no$ aailable $o street money /ar$ Money Tool an oerlay o& line "ar$s o& 2 *or 3 orrela$e% ins$ru/en$s, on w"i" s"or$$er/ !rie %ier#enes are rea%ily seen see lis$ on !a#e MT *see Smart Money ool MT %i *see SM divergence MT %ier#ene %eia$ion &ro/ $"e nor/al !osi$ie or ne#a$ie orrela$ion be$ween 2 ins$ru/en$s on an SM "ar$, si#nalin# a !o$en$ial !rie /oe sni!er a $ra%er Hlyin# in wai$H &or a $ra%e se$u! $o o/e in$o ran#e ;R *or R, or R *see support and resistance s$erlin# in&or/al na/e o& $"e )'' urreny *!ro!er na/e( pound s$erlin# also, one o& $"e ni-na/es o& $"e B>;) !air TF *see shorter time frame T= *see short-term high TL *see short-term low s$in#er in an u! /oe, a bullis" type = divergence nes$e% insi%e a bullis" type divergence3 in a %own /oe, nes$e% bearis" type = an% type divergences s$o" *see stochastic s$o"as$i one o& 3 !rie oscillators * stochastics, 'S8, an% ;<-' inlu%e% in $"e 8$ $oolse$ use one o& $"ese *or MA$" s$o! "un$ a !rie /oe en#ineere% by smart money in or%er $o $ri##er s$o! an% li/i$ or%ers res$in# aboe or below $"e urren$ /ar-e$ !rie s$o!loss $"e !rie leel a$ w"i" a res$in# or%er "as been !lae% $o lose a !osi$ion a$ a loss or, $"e an$ii!a$e% loss, in !i!s, w"en $"a$ !rie is "i$ s$o!s loose $er/ re&errin# $o buys$o! or buyli/i$ or%ers res$in# aboe $"e urren$ /ar-e$, or sells$o! or sellli/i$ or%ers res$in# below $"e urren$ /ar-e$ s$ree$ /oney /ar-e$ !ar$ii!an$s o$"er $"an $"e smart money s$ree$ /oney is no$ !riy $o $"e insi%e in&or/a$ion on w"i" smart money $ra%es un%ay #a! !rie %i&&erene be$ween Fri%ayDs lose an% un%ayDs o!en, re!resen$in# !rie /oe/en$ oer $"e wee-en%, w"ile $"e re$ail /ar-e$ was lose% su!!or$ an% resis$ane si#ni&ian$ leels below an% aboe $"e urren$ /ar-e$ w"ere !rie "as rea$e% in $"e !as$, an% /i#"$ %o so a#ain in $"e %1
&u$ure swee$ s!o$ $"e en$er o& $"e $ar#e$ area &or an %4 , a$ $"e O0'78 re$rae/en$ leel *w"i" is /i%way be$ween $"e 628 an% OP8 re$rae/en$ leels swin# "i#" any o& $"e &ollowin#( a three-bar high, a s$an%ar% 7bar fractal high, an in$er/e%ia$e$er/ "i#" * 8) , or a lon#$er/ "i#" * *) swin# low any o& $"e &ollowin#( a three-bar low, a s$an%ar% 7bar fractal low, an in$er/e%ia$e$er/ low * 8*, or a lon#$er/ low * ** swin# !oin$ w"en !rie brea-s a swing high *or swing low &or $"e &irs$ $i/e, $"a$ swing high *or swing low beo/es a swin# !oin$ swin# $ra%e a $ra%e in w"i" $"e en$ry an% e4i$ are e4!e$e% $o our a wee- or /ore *u! $o seeral wee-s a!ar$, an% $"e !ro&i$ $ar#e$ is 3001,000 !i!s wissy ni-na/e o& $"e );C=F !air T TA *or T;A *see technical analysis $a-e!ro&i$ $"e !rie leel a$ w"i" a res$in# or%er "as been !lae% $o lose a !osi$ion wi$" a !ro&i$ or, $"e an$ii!a$e% !ro&i$, in !i!s, w"en $"a$ !rie is "i$ $e"nial analysis /ar-e$ analysis base% on price action, wi$" or wi$"ou$ $e"nial indicators, bu$ no$ u$iliin# fundamental analysis TF *see time frame $"reebar "i#" a $runa$e% fractal high, on$ainin# 3 bars *ins$ea% o& 7, wi$" $"e en$er bar "ain# $"e "i#"es$ "i#" o& $"e 3 bars $"reebar low a $runa$e% fractal low, on$ainin# 3 bars *ins$ea% o& 7, wi$" $"e en$er bar "ain# $"e lowes$ low o& $"e 3 bars $"ree In%ians li/a4 reersal a series o& 3 loselys!ae% i/!ulse !rie /oes *"i#"er or lower, &ollowe% by a !rie reersal $i/e an% !rie $"eory $"e use o& *1 higher time frames *=, 1, <1, an% M1 $o &in% (ey S&', MS, an% M/, an% *2 confluences *on */5s $o $i/e $ra%es $i/e &ra/e usually re&ers $o a "ar$ $i/e &ra/e, su" as a 7/inu$e "ar$, a "our "ar$, e$' $i/e one a %esi#na$e% #eo#ra!"ial area w"ose $i/eo&%ay is %e$er/ine% in rela$ion $o .M $i/e *or !$ $i/e e4a/!le( Mosow $i/e Y M Y MTZ
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To-yo session Qa/7!/ o(yo time o/!are $o Asian Session, w"i" inlu%es $"e To-yo session !lus $"e *MTZQ in#a!ore an% =on# on# sessions To-yo $i/e >S Y.M ZP *yearroun% Ja!an %oes no$ obsere %ayli#"$ sain# $i/e $o!%own analysis *1 general mar(et analysis phase, *2 anticipatory trade analysis phase, *3 trade execution phase , an% * open trade reaction phase $o!%own a!!roa" *see top-down analysis T> *see ta(e-profit T> *see rading 0lan "evelopment Series $ra%e e4eu$ion !"ase top-down analysis, !"ase 3( /ar-e$ $one, ris( on or off, buy or sell !ro#ra/, )/ S&' leels, MS, M/, $i/e an% !rie, an% $ra%e en$ry $ra%e /ana#e/en$ /ana#e/en$ o& o!en $ra%es $o *1 re%ue $ra%eris- $o ero an% !ro$e$ !ro&i$s on !ro&i$able $ra%es or *2 u$ losses on losin# $ra%es Tra%erDs Trini$y "ar$ %ii%in# a aily, lan eelo!/en$ eries a i%eo series %e$ailin# $"e use o& ris( management, !lus fundamental, inter-mar(et, technical, an% top-down analysis $ren% line an u!war%slo!in# line below a series o& !ro#ressiely "i#"er lows or a %ownwar%slo!in# line aboe a series o& !ro#ressiely lower "i#"s $rian#le a consolidation !a$$ern boun%e% by u!!er an% lower lines w"i" oner#e a$ a !oin$ so/ew"ere $o $"e ri#"$ o& $"e urren$ an%le TT *see rader5s rinity $ur$le sou! a smart money $ra%e !lae% oun$er *o!!osi$e $o a $y!ial H$ur$le $ra%eH, an$ii!a$in# a &ailure o& $"e $ur$le $ra%e *i'e', $"e $ur$les #e$ Hea$enH $weeers re&ers $o $wo, lon#, si%ebysi%e, u!!er *or lower an%le wi-s, wi$" o!!osi$e olors, $y!ially a$ a swin# "i#" *or swin# low %3
$y!e 1 %ier#ene !rie an% oscillator %ier#e, si#nalin# a !robable $ren% reersal bullis"( !rie **, oscillator-)* --- bearis"( !rie )), oscillator-*) $y!e 2 %ier#ene !rie an% oscillator %ier#e, si#nalin# a !robable $ren% on$inua$ion bullis"( !rie )*, oscillator-** bearis"( !rie *), oscillator-)) TU *see time zone U )J );J> !air )'' ollar In%e4 $"e ) /easure% a#ains$ a wei#"$e% bas-e$ o& 6 urrenies( E)R 7O'68, J> 13'68, B> 11'P8, CA P'18, E '28, an% C=F 3'68 )K *see !?S? "ollar 8ndex )K $ria% %ier#ene )TC Coor%ina$e% )niersal Ti/e $"e worl%Ds sien$i&i re&erene $i/e one *&or our !ur!oses, $"e &ollowin# are e5uialen$( )TC Y )T1 Y Uulu $i/e Y .M 8 <8R *or !air
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Uon&i#ura$ion a &ra$al *%e&'1 !rie onsoli%a$ion !a$$ern, seen on all $i/e &ra/es, o& w"i" $"e U%ay is $"e /os$ o&$en obsere% U%ay a %ay o& !rie onsoli%a$ion wi$"in a %e&ine% ran#e, learly boun%e% by ;R leels U%ays are o&$en &ollowe% by sear" an% %es$roy s$o! "un$s N2meri%al 4$ems 00Ds 4'4400 !rie leel *see &i#ure 1'2Q !ro@e$ion $"is rule says $"a$, i& $"e 2 /os$ reen$ LDs were n %ays a!ar$, $"en $"e ne4$ = will &or/ *a!!ro4' 1'2Q 4 n %ays a&$er $"e /os$ reen$ = 1Q EMA 1Q!erio% EMA $o#e$"er, $"e 1Q EMA an% $"e 0 EMA o/!rise a /oin#aera#erossoer in%ia$or, use&ul &or %ay$ra%in# an% s"or$$er/ $ra%in# 20 leel 4'4420 !rie leel *see ins$i$u$ional leel 0 EMA 0!erio% EMA *see 1Q EMA, aboe, &or an e4!lana$ion o& i$s use 70 leel 4'4470 !rie leel *see /i% &i#ure 62 leel s"or$"an% &or $"e 628 re$rae/en$ leel *no$ a s$an%ar% &ib re$rae/en$ leel O0 leel s"or$"an% &or $"e O0'78 re$rae/en$ leel, w"i" is $"e ?TE swee$ s!o$ *no$ a s$an%ar% &ib re$rae/en$ leel OP leel s"or$"an% &or $"e OP8 re$rae/en$ leel *no$ a s$an%ar% &ib re$rae/en$ leel Q0 leel 4'44Q0 !rie leel *see ins$i$u$ional leel 6er) Car$ a&&re>ia$ions (a par$ial lis$*
X) )'' %ollar in%e4 *see )K in $"e al!"abe$ial lis$in# XKE) $"e euro !rie% in )'' %ollars *>=LK !riin#, no$ s!o$ Fore4 !riin# XKB> $"e Bri$is" !oun% !rie% in )'' %ollars *>=LK !riin#, no$ s!o$ Fore4 !riin# XKJ 100 yen !rie% in )'' %ollars *>=LK !riin#, no$ s!o$ Fore4 !riin# no$e( $"is "ar$ is $"e inerse o& a s$an%ar% );J> Fore4 "ar$ %!
