ICT Mentorship Core Content - Month 1 - Equilibrium Vs. Discount

Welcome back folks this is the fourth of eight installments for the first month of the ict mentorship we are covering equilibrium versus discount now again just as a forewarning uh for some some of you were actually uh Pupils of mine prior to me starting this mentorship this is going to seem a little bit elementary initially but i promise i'll add something to it that may bring a little bit more depth the understanding of what optimal trade entry is a long time ago back in 2010 i introduced a simple idea of Looking at swing projections retracements

and identifying what would be deemed as optimal trade entry and everyone knew that saw it obviously fell in love with they liked it it was easy for them to see they would apply it really quick to the chart and i think the reason why is because it had a indicator applied to it and that being the fibonacci now fibonacci doesn't have any magic doesn't have any uh you know significance by Itself and yet to understand where the market may want to reach for so there's going to be a certain measure of prognostication on your part

the fib doesn't do everything for you so i want to draw your attention to looking at where markets are most likely to create by conditions now this is not by signal entries this is just framing a context initially as a new trader someone new to technical analysis someone new to my Principles it's going to give you a foundation so that we can go into the charts and start looking at these things and measure them and then study them okay so all this is meant is to give you a framework to work within in your demo

account everyone should be working inside the forex ltd demo account as i established um at the beginning of this mentorship So we have multiple price swings in here on this daily chart we're looking at primarily a daily chart uh initially for our setups if you're a new trader okay and you seemed overwhelmed you probably heard me talk about certain things already in this mentorship maybe you've watched some of my videos on youtube or on my website's tutorial section And you heard terms that went right over your head some of the terms are created by me

some of them are industry standards uh some are going to require a little bit more uh description about what they mean later on in the mentorship so if you hear something even in this presentation just make a note of it in your notes and then obviously you know you'll pick up the understanding as we Go deeper every month or something new but for now i want you to focus on a simple question if a trader believes that the market's going to go higher what would frame that context what would give the the trader that a

conclusion to trust buying a specific market like what goes in what goes into making that decision well the first thing i want you to understand is this is going to be like The very first baby step to understanding institutional order flow the first thing you need is movement you have to understand that to be a buyer there has to be a willingness of somebody with bigger uh bigger pockets than you more money than you and they are the ones that move price around and they are the banks okay uh they're they're only going to let

price go higher when it suits their purpose Okay so it's not going to be a supply and demand factor it's going to be a greed factor they want money okay they're in the business of making money after all that's their nature their business that's a bank so if we are looking for buying opportunities okay many retail traders look for all of these patterns and indicator based ideas And i want you to focus primarily on price price alone will give you everything you'll ever need in terms of indicating higher or lower price and it'll actually give

you the actual specific entries and your exits you don't need anything else outside of a price chart okay the open high low enclosed does everything for you i want you to look at this low down here and i want you to look at this high up here Okay do you see how that is the biggest price swing on this entire chart so between august 14th all the way to the present time in september there is only been one major price swing higher and lower so if we take a fibonacci level okay and i'm only going

to use fibonacci to illustrate equilibrium okay because i First have to establish what equilibrium is this is the largest price range okay or the market range that's presently being traded in now what do i mean by present market range this is the highest range we've seen okay in the last month or so so if we look at this range and i'm going to scroll back here so you can see there's nothing More significant than that except for this one back here but we're going to primarily use this because it has a very strong reaction we

can use these back here okay and i'll do it for completeness sake later on in the video but for now i want you to see we have very strong impulsive move away then it comes back retraces and then have another strong impulsive move away and comes all the way up here to the High okay when we say impulsive price move or what we refer to as impulsive price swing going forward throughout this mentorship that is the indication that there has been displacement now displacement is where someone with a lot of money okay comes in the

marketplace and they have a strong conviction to move price higher we already know that price is going to Be set by central bank so if they're letting price run this high they're offering at a higher price as long as there's buyers coming in they're going to keep offering that price there as long as they keep finding buyers as they keep raising price up they'll keep expanding price higher higher until there is no longer any interest for them to pair up orders with participants okay other open interest in the Marketplace so they'll allow price to retrace

a little bit until they can get more buy stops above the marketplace it is not a buyer buyer buyer buy a buyer market and they keep um stretching price they have already bought down here and then they're allowing price to be uh offered to the marketplace at higher Prices okay and as that happens there all they're doing is is selling off their positions they establish at a lower low okay from here the banks are assume long positions in here they accumulate long positions once they accumulate a position they allow price to go higher okay once

that price goes higher higher higher it keeps going higher until Their position is funded and they no longer want any more position held so they're going to be looking for liquidation areas where they know that they're going to be willing participants to buy that's going to be above this old high back here why would they want to take price above that oh high here because there's going to be buy stops on a fund level that means big money Managed funds will have stop loss orders right above that high and i'm going to go into details

in this mentorship about where stops are how to how to pick out institutional funds levels where their stops are at where high target big money moves are going to occur all those things will be taught to you but for now i just want to start you very small because then there's a lot of folks that just started with this Mentorship and they've never really been through the complete library of my uh concepts or they haven't really exposed themselves to technical analysis so all this seems greek to them and i don't mean that to offend anybody

that may be greek but it's an expression in the states it means it's alien to them but the first thing i want you to look for in price is you want to see impulsive Price swings okay and since we're primarily looking for discount markets okay and relative terms to equilibrium we first have to understand what an impulse price swing is so let me take the fib off real quick and go back to that price leg right here let me take all this stuff off over here okay so we have one big strong impulsive price swing

right here comes off This low and rallies up we don't need to know what caused the buy down here it's not interesting at all to me i don't care okay we don't know this price link is gonna start until i'm sorry we don't know this price leg is here okay until it forms so i'm giving you a perspective studying in hindsight the low to this high in here Okay that rally up or that impulsive price swing we only require price to start coming down off of that and it takes at least four candles no matter

what time frame you're on you need four candles okay from when the market makes a low and starts rallying up what you're going to look for is once you see a high form let me zoom in once you see a high form you need four candles why four candles you need to Have one candle to the left one candle in the center of the most highest one then a lower candle to the right that's a swing high and then you've got to see price go lower when that happens you start waiting for price to retrace

back to equilibrium now what is equilibrium equilibrium is a midway point of a price move okay so we're measuring the high from this low you take your fib you draw It up to the low and you drop it equilibrium is over here let me scrunch this up a little bit more okay so we have this price leg up so impulsive price swing goes higher as soon as we get three candles then and only then will we start watching for price to come down to the equilibrium price point and that is basically the fibonacci level 50

Okay we're looking for price to come down to that level and soon as it comes back to that level and we're on a daily chart we go down into a lower time frame and we hunt buying opportunities now i'm not teaching you buying entry signals okay i'm giving you context of how to discern when the market goes to discount and when it's at a premium and we're not trading at premiums okay well i'll teach you how to use premiums uh the first Video of next week okay so we're only focusing primarily on equilibrium versus discount

we have a price swing that moves from a low aggressively up we don't do anything until we start seeing a down move and it has to happen after three candles basically making a swing high now swing high looks like this okay you can see it has a high And a candle to the left that's lower and a candle to the right that's lower that's a swing high and once that swing high forms we're waiting for the fourth candle okay to start coming lower in other words we're looking for four candles to start turning around when

that happens okay it gives you now you're allowed to start looking for the market to come down into equilibrium that means the 50 level okay once you're on a 50 level and You're in a higher time frame and we start everything at a daily chart at the daily chart we know we know now that between the low here and the high here the market now has gone back to equilibrium so it's at fair value or at fair market value if you get something at fair market value obviously you're not paying a premium but you're not

really getting a discount either but it's still a neutral To bullish condition that means you're not buying at an inflated price so this time period right here the market is offering an opportunity to be long i'm not going down the lower time frames today i'm not going to teach you that today only thing i'm giving you right now is developing context around the daily institutional price levels that are derived at on the daily chart and all you're looking for is Impulsive price swings first letting price settle back down into equilibrium and then we discern what

we're going to do once we when we get to that level as you can see without going into lower time frames the price does rally again where does it rally back up to its old institutional order flow reference point which is an old high back here so it goes right above that previous high see that Now the market trades off again and goes lower so we have now a new new range we have to now put the fibonacci on this high keeping it off the same low now why did i do that because this price

low has not been violated it only retraced down to here and rallied up again then we wait for three candles the high candle to the left there's a Lower one to the right there's a lower one this is probably a sunday and even still this is one here either way you don't want to count sundays by the way mt4 one else forex ltd does give you the sunday candle so you gotta factor that out don't don't count on these candles because it's a non-event so that's probably going to end up becoming this candle here once

you get the down Candle here that the market has in fact turned it's starting to go lower notice what's happening here we're not rushing we don't need to catch the high okay it gives us all kinds of time to wait and plan and build an idea about what it is specifically we're going to do when price gets to equilibrium price drops down a little bit more then it goes up what do we do the whole time this is happening nothing we're not doing anything this is a higher time Frame principle most of you are all

begging for a higher time frame principle to trade with this is the beginning building blocks to that okay market trades lower lower what do we do here nothing we're not doing anything here yet okay nothing trading lower lower lower lower all of a sudden boom it hits equilibrium over here now we can start studying price we want to study price on the lower time frames we'll look for Entries but i'm not teaching you entry signals here i'm giving you context as soon as we get to equilibrium we are now at fair market value so the

market is permitted to be bought okay at the banking level they will be able to buy at these levels because they're not at a premium based market the levels that are trading at this level here Are at fair market value now banks are just like anyone else if you go to the grocery store and you see steaks for ten dollars of uh i don't even know what they cost because my wife does all the shopping the uh if a state costs ten dollars at the market and it drops down to eight dollars and fifty cents

a steak that's probably you know a discount and it may not be that price i don't know but for the sake of analogy we're using it That means that we are now at a discount anything below equilibrium is now a discount market when markets go below equilibrium they do not spend much time below equilibrium and there's usually a very dynamic price move away from that especially if the context behind the marketplace is bullish now looking at this framework we have here we had an impulsive price swing here A little tiny little tracing came back to

equilibrium rallied one more time took out the high over here and then sold off okay went back down into equilibrium again and went to a discount below 50 of the impulse price swing that is now at a discount so the market on the banking perspective is that this now is now at a discount It is allowed to be bought now you just don't go indiscriminately in there trying to buy it just because it goes back to 50 or less that's not enough you got to have more information but for now i just want to give

you when we have a bullish scenario for a marketplace okay if we think it pairs bullish we look for impulsive price swings on the daily chart the frame higher time Frame ideas there's other trades that you can take in lower time frames in between these but for now i want you primarily focused on just this because it'll give you all the things that you've probably been lacking with higher time frame ideas and the beginning blocks of directional bias because it's daily it gives you a lot of time too you don't have to be sitting in

front of an intraday chart You don't have to worry about the boss catching you doing something and stealing time at the job this gives you a lot of flexibility and time to prepare for an idea to trade on so when we get the equilibrium we know that we are at fair market value it's a market that could be bought if we are bullish but we can't buy it we can't buy above this level up to here okay that's that's the point what i'm Saying the best buys come at equilibrium or less anything below equilibrium or

50 level is viewed as a discount now the wonderful thing about understanding this is when a market's at discount and its underlying uh basis is bullish discount prices don't stay In the market very long the market's going to want to run away from that really quick because this is a daily chart this isn't that bad in terms of how much time it's spent down here below equilibrium but you can see finally it explosively moved away from that and rallied up through what i asked you guys to do in the third Tutorial which was to on

your charts mark out areas of where equal highs would be and where old highs would be the market rallies from that price point and goes right back up and clears out these equal highs when these equal highs are taken out if you were a trader that only took a long in this area and it don't have to be an exact science as far as where it was we're going to speak in general terms if You went along somewhere in this small little consolidation before the expansion okay between buying the 95 big figure roughly up to

these equal highs that's about 98.50 yeah about 98.50 and you bought around 95.50 sets 300 pips move on a signal that would have formed it took a little bit a while To come to fruition but based on equilibrium and discounting okay you can frame the ideas in which the market should react it should be viewed as a discount across the board and if it is in fact bullish the banks will dog pile on this and send the price higher and it should be with quick dynamic price action understanding where it should be Reaching for above

old highs above equal highs okay above um closing a range okay which we don't really have in here but i'm just showing you just in one example here already the first one it's 300 pips okay then we have another price move all the way up here this there's no real Retracements in here because lots we have a high equal a little bit lower here and then here's one here if we were to measure the low to this high it doesn't come down to 50 it's nowhere near i can eyeball that you can probably do that

too but i probably might let's just do it because i'm probably going to have so you folks that are from different Countries have a hard time understanding my english let alone 4x if we would have measured just this impulsive price swing right here notice that even though we had the the candle here lower on the fourth one it kind of up close but it was still lower nothing came back down the equilibrium it stayed at a high price and it just kept going higher and higher and higher and higher higher So if we go back

to adding the fib to that initial price low here and we stretch it because now we we bro we broke this high we're going to keep drawing the fib up on swings that move up dynamically so we have this big parent price swing so now we're going to wait until price gets back down to equilibrium when do we Start waiting for that when the market shows a swing high which it does here then we start counting to the fourth candle where it drops so the fourth candle has to move lower or be lower than the

highest candle that makes the swing high it's all it's a very simple thing and then from there we just start waiting and we count down every time it goes down to a newer low low lower low lower low and finally what's a hit right Here equilibrium that's that 50 mark since it does that the market is at a fair market value so that it can be bought on the banking level it cannot be bought until it gets to that level or below it they won't come in they won't do it it's not based on fibonacci

i'm just showing you in terms of equilibrium between old highs and old lows assists evaluation marker that's all it is okay so the algo will kick Into a buy mode in here especially if they have orders at that level or just a little bit below it and if they are there you'll know because the price will react immediately like it does here it hits it one time it doesn't have another camera touch it this one gets close to it but it still rallies away okay so now watch what happens we have another impulse swing here

price moves away from an area where we Expect it to rally why do we expect it to rally there because between this low and this high price should be sensitive here on the upside and it rallies now watch what happens this is a big big step i'm going to keep this fibonacci just like it is i'm going to add another one right on the low that starts here and it runs up here see that so between this low Up to this high why are we counting this swing why are we using this fibonacci price swing

michael and not something else because this one showed reaction to want to move away from an area we would expect it to move and now watch we have a swing high here's a high lower high lower high and this candle is lower than the one on the highest portion of the swing high so now we start counting down until price gets to what equilibrium or less The next candle doesn't do it this candle does it goes right down through equilibrium down into what we call optimal trade entry so when we get below equilibrium all this

time in here look how much time it gives you opportunities to get in at 62 to 70 and a half percent which is the optimal trade entry sweet spot if you look at that price Gathers up more orders and rallies away aggressively watch it happens again now we have another reference point this is where we expected price to react and it did it gives us another price leg we pull it all the way up here from this low to this high we get a high a low a lower low on this one and we're already

below equilibrium look at the buys of the candle we wick through it I'm not going to talk about order blocks here as much as i want to right now it's for some of you guys that do know and block you probably know what i'm talking about before i would say it but in here we expect price to be sensitive in here okay because we're below 50 percent or equilibrium we're at a discount price should not spend much time there at all it quickly rallies away okay and it comes back down I could draw a fib

on this low to this hot matter of fact let me just do it after all that's the context of what we're teaching here today right pulling the fib on all these levels where there should be reaction okay market rallies up here's the swing high the next candle the fourth candle has got to be lower it does it trades through equilibrium right into optimal trade entry does it stay there long no it rallies up comes back It doesn't break the high comes back one more time to equilibrium and then aggressively moves away and expands expands expands

expands expands and then finally it gives us a reversal but nonetheless that right there from buying in here to here let's look at that in terms of range 300 pips again okay you're not it's not every not every Day setups okay but it's giving you significant setups if we look at the moves that we called in here using what i'm showing you if you bought down in here just to this level here's 140 pips to here it's 272 pips if you held on to it it's 400 pips this price move in here price should be

sensitive right here i'll throw it in here order blocks right Here you'll learn about those but the fibonacci we just showed you it's still there and watch this we had a price swing here that reacted off of a level that should be bullish here's our new price leg here we have a high and a higher high so we have a higher magnitude price swing that's going higher we wait for the swing high to form down Candles right here equilibrium is right here into the optimal trade entry which is discount it's got to be below equilibrium

if the market is below equilibrium we are in a discount market and it should not go below the old blow it forms in other words wherever the impulse price swing is that low it starts from it can't go below that so think about What it's already giving you it's giving you a framework to work within okay i don't need to know exactly where i'm buying at i just know a general area i can fine tune that down into lower time frames when we do top-down analysis i'll teach that but for now if we understand this

is the low we draw our fit from that that a stop loss has to be below there on this time frame so we can buy in this area here put a Stop loss down here define the risk between that and then how much of a risk the reward will we get based on how far should reach up every time every time that price makes an impulse price swing higher we just wait for it to come back down and there's no rush we just wait it takes three candles on the third candle it can hit equilibrium

and go below it but we need to just simply wait for the Swing high to form and then you watch it drop down once it drops down you know what you're going to be expecting the price move should be explosive to the upside because the market goes back to a discount below equilibrium it can be as sensitive at equilibrium but here's what we're supposed to be focusing primarily on you want high odds trades you want high probability explosive price action moves In your favor that happens when it goes below equilibrium because the market will go

to a very very suppressed levels and when they go below equilibrium to a discount level markets will not sustain discount prices very long if the underlying pinnings of the marketplace is bullish so it gives you two things it gives you a context to work within when you for buys and it gives you also A relative strength study that's built in it should be sensitive it should be dynamic price action moves away from that equilibrium or less more specifically below equilibrium so that's where the optimal trade entry idea came from when i was using the 62

percent of 79 tracement levels that you see on my fibonaccis well it's this area 62 70.5 and 79 percent okay and Those levels are very very sensitive not because of fibonacci sake but because it's really just measuring how far the per the current price range has been the algo had a low down here and it had a high here this is the total range that we're trading inside of right now okay right now this is this is right now current as of today um friday's close of september 16th okay So right now we are in

the range that's been defined by the high and the low here so that level of equilibrium still exists which is here so any by condition that occurs below this level here is high probability what does that mean that means you just measure every single impulsive price leg higher when it moves up Actually let's do this let's shade this area and that way we'll understand that anything below anything below here that's in a high probability or discount market okay so now when we when we understand that we can define every single price leg that moves up

which is an impulsive Price swing when it moves higher all we have to do is measure the new equilibrium point that which it's created and here i'm going to start right here there's the impulse price leg right there so we have the low up to the high swing high fourth count is going to be down it does hit equilibrium should it respond yes it should be dynamic does it go higher yes It does makes a new high where does it go to michael above a previous high over here and then it trades back down now

here we have equilibrium again it trades the equilibrium and then aggressively trades through it you're probably thinking oh it failed it does that's what's going to happen sometimes you're going to lose money i want you to understand that it's not going to be Perfect but it's going to give you more context than you have right now especially if you're new if you have been looking at price action before you probably have never looked at it like this in terms of valuation between equilibrium and discount and we're going to teach the the importance of that the

rest of this month and the remaining teachings but for now i want to introduce you the idea of viewing price in this context Below equilibrium here no discount we come all the way back down and take out a stop stop runs is what's going to be a different profile and if you take a loss that's what you expect you expect this occurrence to happen where the market takes the low out well if it does take that low out what is it probably really doing it's taking stops out so that it should be a turtle soup

turtle soup's a false breakout pattern it went below that low we should see a responsiveness That's aggressive that moves higher we see that here okay market trades up makes an impulsive price leg from that low all the way up to here now watch here's the cool part about this we have a swing high you have the high the lower high the lower high and the fourth candle is down does it ever get down to equilibrium no so we have no Trade we don't catch anything that keeps going up no problem i'm worried about you ain't

worried about it next price leg we look for okay we have this price leg here we're only focusing on inside the yellow area that's the shaded discount portion of this market the dollar swissy this current market is a discount below below this line here this this is equilibrium the Top of the yellow shaded area and below is discount so the market should be responsive at levels of discount after we after we see this high form we look for the high the swing higher form and the fourth kilo has got to show willingness to be lower

it does and then we simply just wait we get wait wait wait wait wait wait wait wait until it hits the equilibrium and then we go down to lower time frames and we look for Trading signals there may or may not been they may or may not have rather been one here okay i'm gonna say maybe you took one there and maybe it took and you took a loss great no problem you took a loss here's a here's a losing trade here and here's a losing trade here no problem we had a winner here the

market's gone down into a deeper discount look at this swing low over here okay This is the building blocks of understanding how institutional overflow will incorporate bullish order blocks when market comes down into a discount and a deep retracement of this impulsive price swing you're looking at the down candles right at the low okay if you have two of them consecutively it begins at the top of this candle right here So draw that out in time the market goes into that area this is a buying opportunity you would go down to a lower time frame

again the daily chart is very high it's it's high time frame so you're going to be able to break that down into four hours 60 minute 15 minute and five minutes look for buying opportunities in that that area for discounting market immediately aggressively moves away When we get that we get another price leg and we can take our fibonacci and measure it to come up with another equilibrium doesn't come back down to discount or equilibrium in here so we don't have any trade here the market rallies again from that level we put our low on

our fibonacci and here's our high here So we have a high a lower high and a down candle it hits equilibrium we get a response rallies up trades right back up to an old low rejection i'm not looking for sell signals we're not teaching that here now we have a higher magnitude price swing all this impulsive price swing even though it's broken up into three legs You still have to measure that because that's the end there it's the parent price swing that's currently being traded in right there okay so this movement here when price gets

down to equilibrium we would study and see if there's a reason to be a buyer there's an order block over here so it may be in something to look at in a lower time frame maybe there was a loss maybe you didn't Take a trade i don't know but price goes down into a deeper discount trades right into bullish overblock price hits it does it spend much time there no it rallies aggressively and it fills in an area where price had already moved in rather quickly and i'll just toss this in there from for teasing

purposes it goes right up to the bottom Of this bullish candle which is a bearish order block and that's an area where you would look to take profits on a long position if you did something like that buy and say you bought it right here in the middle less range here and you got out there that's 175 pips factoring sped by 170 pips how can anyone be upset with something like that when you're waiting around You're not getting a million trades okay there's not a lot of this is the daily chart so you're getting about

one per week really good high odds opportunities so when you see moves like this okay you can see uh there's a willingness to to recapitalize these levels based on the fact that market goes to a discount uh we have the same price swing back here you always use the same ranges that we're Currently in this range is still in effect mark comes back down into the 79 certain channel level which is still a deep discount market and also it blows out an old low so there may be some stops down here that the market takes

out now think if the market's going to go higher generally now think if the market's going to go higher and it's bullish and it comes down below An old low that's generally going to be a stop loss run that was the first thing i taught in 2010 to look for dynamic price moves if you understand what a bullish market is okay you want to define every time the market creates a low and then violates that low if it does that generally that means that the market makers or the institutional banking algo will go down below

the lows and gather up any orders that will be resting below those orders I'm below that low this low here it's violated here immediately rejects and goes higher this low here it goes below here rejects immediately and goes higher this low here it goes down below it rejects immediately goes higher so now think about what i've just given you i've given you framework to map out what equilibrium is okay what is that and then i told you what the benefit of knowing what below equilibrium is it's Discount so when you're looking for a market when

you're looking at a range in the marketplace and the market goes below an old low that gives you context to look for what stop raids below the lows and there should be a reaction going higher if the market's bullish if the market's underlying tone is bullish then we're going to frame all that stuff but for now i want you to study go in your charts and you'll see a Plethora of these things occurring all the time and it gives you the building blocks of knowing what trading setups form how the market should react and you'll

start seeing these things before they happen you want to study them in the past first but then start looking for them to anticipate future moves based on what i'm teaching here so again in summary we understand that Equilibrium is the midway point of a range we need an impulsive price leg higher once we identify that an individual impulse price swing we run our fibonacci from the low up to the high and then we wait for four candles once this fourth candle is lower than the highest one we start waiting for price to come down into

equilibrium when it does that We can go in and hunt for buying opportunities on the lower time frames we blend in institutional order flow ideas like the order blocks mitigation blocks breakers turtle soups okay and optimal trade entries all those things either one of them any one of them can be applied for a buying scenario but if you ever see the conditions that's bullish and a low is swept out that's when you anticipate a turtle suit The question i get all the time is how do i know if the market's going to keep going lower

or if it's going to just go below an old low and then rally up this is the beginning basis point of knowing when that occurs and when not to expect it to uh to turn around so we have the market reacting off of this it rallies up now we have another price leg right in here it took out an old high so We can go over here draw our fibonacci on that low up to this high price comes down to equilibrium we start hunting for buying opportunities right in here in a lower time frame i

don't know if there's anything there yet you'll have to go and look in your charts yourself but we go down into 62 percentation level which is now discount okay so when we identify equilibrium that's the 50 level when price goes below 50 percent it it's at a discount when is it the highest probable degree of bullishness at a discount price that's when you have this the 62 to 79 tracement level in that area right there that's the deep discount that we look for in bullish conditions and why fibonacci 62 to 79 transfer levels work Any

other time fibonacci is going to fail you all the time it's the foundations behind price action that cause these indicators to work sometimes even overbought sold indicators will work if you apply these ideas to them bullish divergence uh trend following hidden diversions okay or type 2 trend following which is uh really what it is developed and discovered by nick van nice and not george lane by the way the The ideas have to come by way of sound price action understanding if it's not there based on what the foundations of price action are implying then it's

not going to work it doesn't matter what in here you slap on your chart you need to have the underpinnings of the market being dictated by price action not by mathematically derived or crunching of past price to give you some prognostication it doesn't work like That the market will not respond to an indicator the indicator is only reflecting a mathematical historical reference of something that price has already done that has no basis on what the market's going to do going forward so when we look at markets we have to number one define what these price

ranges are that means number one if we're bullish all we're doing is waiting around what are we waiting around for michael we're Waiting for a price move well i'm missing all that yeah you probably are and that's patience traders that make money professionally or manage funds are not chasing everything that goes on in the marketplace they know exactly what they're looking for once you get a price run like this it's an impulsive price swing then you wait what are you waiting for four candles up here when the fourth one comes then you Simply wait for

it to come back down the equilibrium once it gets to equilibrium you can look for a signal but i'm stressing the difference between equilibrium versus discount is you want it to now go below equilibrium into 62 minimum down into 79 tracement when it does that that's when you have the highest probable degree of bullishness while the markets in a discount Then you should see explosive price acting to the upside if you're using a daily chart you'll be able to use this as a day trader as a short-term trader a position trader a swing trader nothing

has been changed in the delivery of what i look for relative to bullish order blocks turtle soups all that business here's the cool thing if we understand that we're bullish in The discount zone like we've had here defined by this fibonacci level okay down in this area here we're looking for specific things to happen we're not just looking at um well i just use the term zone but not like zone like supply and demand zone in this section or or well let's say here it's not because it's not really defined in the sense that it's

supplying demand zones but It's a total area of valuation where between equilibrium and less then it's in a discount so if you're going to have this as a range to work with them what inside of the range are you really specifically looking for okay well you're looking for specific reference points in terms of institutional order flow that means a stop run like we defined here and here Where the market went lower than a previous low in here and then you anticipate what the market to expand to the upside if we understand that that's the occurrence

that should take place when we're down here and we're looking for bison areas so if it goes below equilibrium and blows out a fibonacci level and you take a loss just find the low that it just blew out and then expect the buy signal there Then and then you're buying at a really deep discount then you're going to get it explosive move the upside so now if we're using false breaks below previous lows down here what can you do to get out of a profitable position the same thing you look for a high if you're

buying down here after stops been run you take your profit once this market goes above a previous high over here The market makes a lower low it rallies okay it rallies up starts to retrace where you want to get out at when it gets above old high here's an ohio you take your profits right there but wait a minute michael wait a minute it didn't go above this one here what if i would have held on to that one then you would have been greedy he gave you two chances to do it the market made

a new high here Turn back a little around and then one more time punched above it get out above an old high markets will distribute or let me say it this way market makers and smart money will distribute long positions above old highs it doesn't have to be the oldest high it didn't go over above this one either you didn't go above this one you don't need it to once it creates a high they they only allow price to retrace to Allow stops to build up above an old high that's how they engineer liquidity so

when engineered liquidity comes in the marketplace in the form of a buy stop protecting a short position that somebody out there you know foolishly put in there then the run price above it hitting those buy stops those buy stocks become market orders to buy the market and they sell to those buy stops their long positions they accumulated back here that's all Institutional order flow is understanding the storyline between what the highs and the lows are giving you if you frame the ranges based on your understanding of what the market should be bullish or bearish and

that's easy don't worry about that we'll get to that but for now i'm trying to trying to institute a foundation for looking at price on a higher time frame and then Managing your expectations based on what you see on this time frame and and also building the beginning basis to your anticipatory skills for looking for future moves wait a minute michael this is this is it you just form-fitted this one this is probably just only working on this chart here what happens if you go into um What happens if you go into a hourly chart

suddenly it's all going gonna be different right it's gonna be different it's all gonna be different well here we have a price leg here okay impulsive price swing you map that out okay swing high fourth candle doesn't get back down to equilibrium no problem we wait for it to uh do it it doesn't do it Makes another leg higher what happened we missed it don't worry about it don't chase it you know exactly what you're waiting for price makes the new higher high so we have the low to the high what are we waiting for

price to get down to equilibrium okay great but what happens when it gets below that we're in a discount market it has to go into the what 62 retracement level minimum right here it does does it stay there long no Way it doesn't stay that long what happens the price moves away from it and then what does it do it comes back down into equilibrium again and it expands again it consolidates a little bit makes a short-term high where do you take your profits at michael above old time uh short-term high boom it rallies above

it knocks that high out and even comes back and clears This one out too just by a little bit and then look what happens it retraces all the way back down to equilibrium again does it spend time much there no rallies back up where does it go back to the bottom of this bullish uh candle which is a bearish order block fills it right to the right to the pip and i'm gonna tell you something i hate this pair i literally hate this pair with a passion because it's just a sneaky pair like the japanese

yen and You swiss folks and uh japanese folks please don't take offense to that i'm just i don't like your currencies put that way the uh the open online candle is 97.68 and the high on this candle comes in at exactly 97.68 so you take your profits right there not at that high you exit before you get to that remember we always want to get out before we get to the actual price leg now we have another higher high Right here see that so we're going to wait for price to get down to equilibrium and

less it does it here again 62 percent 62 retracement level should it stay there long no does it no it doesn't it rallies away retraces it back to equilibrium again and then what do we expect at equilibrium what did i teach you about the algo it goes from consolidation which is always going to be at equilibrium To expansion what's it expanding to to liquidity where's the liquidity at right here before it takes off going vertical where is the liquidity at it's above this high and above this high here what is it buy stops somebody wants

to protect a short position so if they're going to buy down here as smart money they're going to sell it to who somebody that wants to buy at a higher price the buy stops here and the buy stops here look what happens it goes up a little Bit small little retracement and then expands aggressively what's it going for it stops right here and then right here then once we go above look what happens this movement here what did i teach you i teach that markets move in intraday price action in grades of 10 which is

10 10 and 20 pip ranges above a high that's how far they'll reach for a stop boom there you go there's your stop run on equal highs remember i told you on your charts mark out areas where there's equal highs they're too clean the market's going to want to run there so anything below 50 is discount but it can go back to equilibrium and consolidate and then expand So i'm blending two components giving you introduction to the uh the interbank algo where you'll know what the what the price engines were gonna do before they do

it they're going to offer the price higher when it's time to do so but they're going to have to capitalize discounted markets before it goes higher it won't just go straight up for no reason it doesn't it Doesn't operate like that the market has to come back down to a discount and below equilibrium then you get explosive moves then it may come back to equilibrium to consolidate and wait for an expansion then the expansion comes and you look for the locality above the marketplace so the difference between equilibrium is yes it's fair market value at

equilibrium we as traders we want to trade at Discounts we have to get below equilibrium when it gets into 62 retracement level or down into 70.5 or even 79 traditional levels you really need to be considering being interested in being long on those markets when your underlying bullishness is there waiting for expansion blending in all the tools that you'll learn look at the low here okay we're below equilibrium here's a Low it comes all the way down hits those right there what would you expect even if you didn't see the fibonacci what would you expect

that this is a turtle suit it's a run on stops it quickly rejects comes back down what if it's going to go lower michael it shouldn't why because it already took the stops out so it's only retracing a little bit if you took another fibonacci and you put it on this range because We're looking at an hourly chart here this would be a smaller price leg in a lower time frame look what it does it goes right back down into optimal trade entry again below equilibrium optimal trade entry and does it spend much time down

there no it rallies up hits the 62 62 retracement level again and then expands boom takes off there's no magic in fibonacci none the only thing it helps you do is Visually see what equilibrium is in price and then below equilibrium where is a good price to enter at a discount and here's the benefit if it goes lower than the optimal trade entry between 62 and seven times chasing labels and your online bullishness is there wait for the turtles to buy boom it's that easy it's that easy and you don't believe me i know you

Don't believe me that's the beautiful part about this and that's why i want you to go into your charts and look for it if we have a bullish market okay and we know that markets are retracing you won't need to see the fibonacci you can just eyeball it between this low and this high midway points about right here this market move below that is below equilibrium it's at a discount and guess What it cleared out stops over here what's it going to do rally it rallies up equal lows in here too clean market drops down

what's it doing coming down the equilibrium fibonacci levels optimal trade entry i'm not going to put the fib on it you can do it from this low to this high goes right down into optimal trade entry explodes why because it cleared out the equal lows down here boom explodes up to The outside what about this low over here michael sure comes down cleans it out what should happen it should expand it's bullish we're in a discount market they're only coming down to take the stops below the marketplace out these are sell stops why would the

market makers want to take the market down to take out sell stops because it injects people that want to sell to them that want to buy They get counter parties to their buy orders by having the sell stops tripped below that low boom explodes this low right here violated right here not by much it doesn't need to be much once it hits that level then the orders go hot bang it explodes up the upside well it doesn't make a new high michael it doesn't have to you get exited right here at your old order blocks

you don't need to have Everything out there to come in alignment the stars don't have to align to give you a profitable trade you just need a couple things that make sense they have to start with equilibrium to discount for buys it has to happen if you don't get that you're not going to have these explosive buy signals it's going to fall on your lap it's not just knowing give me a buy signal michael tell me when to get in get out this stuff this is why i told You you have to understand things before

just looking for bullish order blocks before turtle suit longs before optimal training entry longs before stochastic divergence bullishly none of those things work outside of understanding the central tenant to what a market is at equilibrium or below it at discount that's a favorable buying market anything apart from that you stay away from it you wait or look for the opposite side of the Market which is what we'll talk about next week when we look at equilibrium versus premium