So if we go up in that range to the upper end of it, look over here. What do we have? All three of these candles here.
One, two, three. The order block begins with this candle's low. It's one, two, three candles making one consecutive bearish order block.
Some of you are commenting in the section of the video saying, "I thought I understood order blocks. Now I'm confused. " because you're hearing people parrot what I've said in certain circumstances and they don't understand what an order block is.
Okay? This is why I get upset when people try to teach what they heard me teach about one or two times and the buzzword is what's being tossed around so that way people can sell their courses and get clicks on their videos. You have no idea learning about order blocks from anybody else on YouTube.
I'm gonna make it very plain and make a blanket statement right there. I'm not trying to hurt anybody's feeling because I know a lot of you out there that try to talk about order blocks. You have a lot of respect for me, but I'm trying to correct you because I know you have a large audience and some of you have a very large audience and you're doing things that are not accurate.
Okay? So, I know you're watching my videos so that way you'll correct what you're doing. So, that way your viewers won't be harmed or they won't use something that's done incorrectly and dubbed as my order block.
And if they have hardship or difficulty doing it, it's not going to be attributed to the concepts being effective cuz they are effective. It's just they haven't been taught properly. Okay, it's easy to talk about it in hindsight, but it's real hard to do it in real time unless you know what you're doing.
So, the logic is we we ran up into this daily fair value gap. That's what this level is up here. This red line was those relative equal highs on the hourly chart.
Remember that. And you're probably going to need to watch this video a few times cuz I've gone through a lot already. But I'm breaking down the market.
And this run here is the run into that imbalance and above the relative equal highs. So, this is the bearish order block. It's the consecutive run on this time frame, the fiveminute chart.
It does not need to get up into this last up close candle before the down close cuz that's what everybody says an order block is. It is not that. Notice it doesn't even get up to that, does it?
Why? Because what I'm showing you here, what makes an order block valid? It has to have an imbalance.
Without the imbalance, there is no order block. That's why it's not supply and demand. Okay?
There's specific rules. I'm going to cut through candles. Supply and demand requires fresh zones.
Okay? That's nonsense. I have no affinity for anything like that.
I'll cut through fractals and go through and find something over here and still trade on it. So, that violates the supply and demand theory right there. So I that's the distinction and why I laugh at people that say, "Oh, he's teaching really nothing new.
" I'm really teaching you something that no one's talking about unless I talk about it first. They're saying what I said. And not to sound egotistical.
I'm not trying to be egotistical, but I'm I want you to learn it correctly, folks. Okay? I only want to see you do it the right way because if you do it the right way, you will find the results you're looking for.
If you don't want to do what I'm teaching, you're not going to be consistent. You're not going to find longevity. and you're going to get frustrated and you're going to think that this stuff doesn't work because you didn't learn it properly from the person that created it.
The order block is all three consecutive candles. The reason why this last upclose candle is not even traded to is because the higher time frame parent imbalance, that 15-minute time frame, which is being shown here, that range of that low and that candle's high here, it stops there. So, there's no necessity for it to trade up into that last candle.
So if it trades up into this candle here, the bottom one, the last one of the three going up, that's enough for me. And take that over here. And then we have this imbalance.
So in my mind, this imbalance is sufficient. We don't need this one. And you wouldn't expect that last up close candle to be traded, too.
So this is the ideal scenario that I think the mentorship on YouTube should be looking for. Now, as soon as you have this, this is one you settle in on. What are you met with another little fair value right above it?
So, what were the rules that I gave you when it has that in the chart? Think it is going to be a likelihood that it could trade up in there, but your limit order to enter is down in here because it might not get up here. What am I trying to do?
I'm trying to teach you how to avoid missing trades because a lot of you are going to want to put an order up in here. And yes, it would have been filled on this instance, but many times you're going to have an order placed at a really overzealous price point that if you nail it, it's beautiful, but they don't happen a lot. It's fleeting.
It happens once in a while. So, I'm trying to give you something that allows you to operate consistently, gives you lots of setups that will allow you to practice. Also, back test like I'm showing you here.
This is how you back test because this has already happened. But either these are all the things that I'm teaching you in this mentorship and I talked about this level here in my own private group beforehand and you also knew about the bias being bearish on this pair from Tuesday's trading or Tuesday's episode in this mentorship on the YouTube channel. Okay.
So we had a break in this low here. So there's an internal shift in market structure. It's bearish.
We have the imbalance here that's been refined down into the 5-minute chart in concert with the bearish order block. the lowest down close candle. We've talked about why we're not looking at the last up close candle before the down move.
So, we're canceling all that misconception and it runs up into the level with the rule I gave you. If we settle in on a fair value gap and it has a small one above it, expected it might trade up there. So, your risk has to incorporate that.
So, that's the reason why I'm telling you your stop loss could be here. Yes, it might be a little bit too rich for some of you because you want to trade with one pip stop loss, a half a pip stop-loss. There's a lot of guys out there trying to do ultra ultra short-term stuff.
You might be able to pull it off once in a while, maybe, you know, a series of trades, but I promise you, when you start putting down size on these trades, you're not going to be able to pull that off, okay? It just isn't going to happen. So, don't get used to trying to do it, okay?
Plus, it's easy to do other things. you can walk away from the charts and not be chained to it because if you have a small ultra short stop, I don't care how good you are, you're going to sweat it. You're going to be expecting you're going to get stopped out.
What happens if it stops me out? I'm not worried about getting stopped out. I'm not worried about if the market moves to my stop.
I'm more interested in the market moving where I think it's going to go. Where is that? That's this level down here.
That's the sixth of April's low. Okay. Yeah, we went lower than that already.
Here, let me get this thing out of your way. If you take this and move it out of the way here, we have the an early run at uh 5:00 or so in the morning. It made that at 5:25 New York local time in the morning.
It swept the previous days low. So, the 6th of April was swept. Then, we rallied up and we hit the level that what our bias called for.
In other words, I'm looking for this level to be traded to before I go short. So, I'm not taking anything in London. I'm not worried about anything in London because London didn't give me the initial rally higher into this area.
When does it go up here? It's going up there at 9:30 in the morning, New York local time. So, it hits that level.
It's at a really rich premium. And I know my discount level I'm looking for for targeting. So, here's the framework, the setup.
We have our market structure shift. We have disqualified all these upper candles here. the lower candle.
That's where you're going to aim for. What's the order block that you trade for, Michael? What's the one?
What's the right order block? How do I pick the right order block? I just answered it.
What is an order block? It's a change in the state of delivery. The algorithm changes its state of delivery.
As soon as we get below this candle's open, the market starts delivering sellside sign and then it breaks this swing low. So now we have changed gears internally. Any rally after that is just setting up another run to go lower.
So in other words, this is a suspect rally. Okay? So this is an intermediate term high swing high because it has the imbalance.
It should not trade higher than that high. That's the reason why I'm telling you you can put your stop loss there. You see how the rules are coming together?
I'm not complicating it. I'm literally telling you everything I've taught and I'm putting it into the chart. Everything was said before it happened and here it is.
It's the framework. It's the logic and I'm teaching you with great detail that you otherwise would have never learned. So, I'm taking you in over top of the chart, giving you the framework.
I'm giving you the logic. I'm giving you the what if this, what if that conditions, okay? I'm telling you how to negate certain order blocks that you would otherwise expect to see it trade to because of different YouTube channels or other people trying to teach my stuff and they don't know what they're talking about.
Okay?
