Original subtitles

Okay folks.

Welcome back.

This is the eighth and final teaching for the second month of the ICT mentorship.

This is month October.

We're dealing specifically with market-maker travel.

Of false breakouts.

And we're talking about specifically, uh, in this teaching, uh, one side

of the marketplace, just for the sake of saving time, everything that we

show you will be just re uh, reverse.

Everything has been shown.

So a false breakout above price consolidate.

Uh, this condition generally manifests in primary bearish markets.

In other words, if the market's in a downtrend, or if we're presently

trading lower or expected to trade lower, a false breakout above the

consolidations is reasonably expected.

And generally what you see manifest itself at some measure of equilibrium and

price, the market will move into a trading range, neophyte traders or breakout

traders will bracket the trading room.

In price with orders.

That means they're going to have buy stops to break out when the buy above the old

highs or self stops below the old lows to sell short a break below the old loads.

In other words, they're trying to capture a trend and they're going to

put a buy order above the marketplace and a sell order below the marketplace

because they absolutely have no idea what's going on more breakout traders.

They just want to bracket the marketplace.

Long-term trend followers.

Uh, they don't mind taking a lot of losses, uh, with the hopes of eventually

catching a large trade, but market makers will typically send price above

the range to neutralize by stops.

So we're gonna focus primarily on one side of the marketplace.

And again, assuming that the market is primarily bearish, that's what

the market makers emo is going to be.

Okay.

Their playbook is to run the buy stops above the marketplace.

Now false breakout below price consolidations is obviously the opposite.

Uh, this condition generally manifest itself, primarily in bullish markets and

at some measure of equilibrium and price, the market will move into a trading.

Neophyte traders and or breakout traders.

So again, we'll bracket the trading range in price with orders.

Again, looking to focus on buying on a breakout or selling short on the breakout.

They are not privy or a student enough to know what direction

they just simply want to react to whatever the market gives them.

In terms of breaking out, above or below what the market makers will

typically send price below the range to neutralize the sell stops.

So graphically, what I'll show you here is a breakout trader or a

neophyte trader's perspective on a market that goes into a trading range

above the old high or recent high.

They will have buy stops for long breakout traders and anyone that would be short.

Obviously a thereby stock will be resting above that high and below the lows.

There'll be cell stops for longterm.

And cell stops for short breakout traders.

In other words, they want to capture a move that would hopefully continue

going for a long period of time lower.

Uh, they would like to get short on weakness and obviously bulls would like

to be, uh, when they're breakout traders, they want to be buying on strength.

They think by breaking out, above and old high, they there by stop

would trip them into a long position.

And their belief is that they're going to hopefully capture a longterm trend up.

Now from a market makers perspective, um, we look below the marketplace when

we have lows in the form of cell stops.

Now I'm going to focus primarily on a.

Buying environment.

Okay.

Focusing on, uh, you and a market is underlyingly bullish.

Uh, everything that I show you here would just be reversed

for when the market's bearish.

Okay.

Just to save, save time.

When the market breaks below the consolidation, those cell stops

are used to pair long orders.

Now who's buying those cell stops.

It's smart money, but what types of orders?

The rest of them?

If we know below the marketplace itself stops.

What's the resting above the highs by stops.

So naturally as the market moves away from those cell stops being

ran out below the consolidation.

They're going to expand price.

Think of APTA.

Now they're going to expand the price up to the liquidity above the old high.

So there's buy stops are going to use to pair long selling.

In other words, we're going to scale out their long positions or take some props.

Eventually the market will go into another area of consolidation

or another trading range.

The market drops below that trading range to take out the

sell stops below consolidation.

Now.

As soon as this happens, your thought process should internally be going

on inside your mind with, okay.

They've already shown a willingness to take the sell stuff below 108 55.

Now they rally price above the 1 0 9 big figure.

We've retraced a little bit.

Okay.

So if they are taking the market below this short-term consolidation, they're

probably going to run to price higher.

So where would those objectives.

What's resting above that old high, my stops.

So if they're taking the market below a consolidation in our understanding or

expectations is the market is bullish.

They're taking the market below the consolidations, the run sell stops out.

The only reason why they're going to want to do that is to absorb those sell stops,

to be counterparties for their loans.

When they are long when smart money's long, how do they look to exit their

positions and book a profit or hedge?

They have to get out in a place where there's willing participants.

Buyers are always above the highs, either in the form of a buying breakout

or buy stops on short positions.

That's where the liquidity is.

Remember that market paradigm shift it's, uh, been spoke about in this mentorship?

Well, we're talking about it here again, just using in terms where

you can see how it's applicable in price, price runs above that old high.

And now we have two areas at which the market makers have both.

Long positions.

So now they're pricing in a bi-model.

So as the market moves higher, okay, they're going to liquidate

some of their positions to hedge.

And they're also going to liquidate positions that those

traders are at the bank level, or actually speculating for profit.

So this is how they actually take their, their trades and put them on and how they

scale them off, where they're placing their entries and where they're placing

their limit orders to get out with it.

But what's over here.

What rests above that?

Remember I showed you in the first month of this mentorship in September specific

things to look for clean highs and clean loads, whether it's an area ready to right

here, that clean highs above from where we're showing right now, after that 1 0 9,

15 level has been hit, there really isn't much in way of liquidity, voids, or pools.

That would be a much of interest except for those stops right above those Eagles.

As you can see price expands.

Think now in the interbank price delivery algorithm, it's going to expand

up and it's going to seek liquidity.

That's what we see here.

Then what happens?

Price and variably.

We'll go, we'll go back into a consolidation.

Now what's the underlying condition of the marketplace.

It's bullish.

Why?

Because they keep taking price below and then rejecting that absorbing

the sell stops and expanding prices.

Is there any reason to suspect that price could go higher?

Look at the price action you see here.

Do you see anything that jumps off at you?

If it doesn't, we'll come to it as we move forward in this example, but we have

a consolidation and here are reasonable expectation would be to see price seek the

sell stops below the consolidation price.

Does in fact, go below the consolidation.

What's above this old house.

Liquidity now, do we always look at the old high or would we look

for, do we consider the Wix?

We can, but primarily all the volume is seen in what the wicks are, the

bodies, the bodies of the candles.

So the body of the candle is, has the most volume, so that

liquidity is going to rest above it.

So if they took the stops out below the 1 0 8 95, They're going to look to run price

higher in the form of 100, 9 40 or higher.

But initially we had that short-term consolidation, the buy stops

resting above that they could scale off a position right there.

And the next objective would be 1 0 9 40

as you can see 1 0 9 40 is swept moving just above the bodies of the Canon.

Note the way that the orders are stacking higher each time when they

buy they're buying a little bit higher each time and they're working

their orders in and still offering opportunities to scale off and profit.

So the hedges can work this month.

The speculators at the bank level can work this model.

And they're also providing liquidity for those individuals that want

cell stops to be activated.

If the market goes down to those positions and those individuals, they

won't buy stops above the old highs.

They're happy because their liquidity is being provided as well to think.

Remember that market efficiency paradigm, you have to think like a market.

Now we have a larger trading range.

Now I've kept that area of which old buying was done at 1 0 9 90 F

I'm sorry, why don't 8 95, but now we've moved into a larger range.

Nothing's changed here.

The model is still bullish.

So we see market action trade below that consolidation trades down into 1 0 8 85.

So with that movement down into that level, where is the liquidity at?

Above the old, huh?

At 1 0 9 45 or so that's what you have up here.

So what is it specifically by stops?

So we have willing buyers that are waiting up there for price.

Once it gets there, they're buying smart.

Money's buying at 1 0 8 90 or 1 0 8 85 in that area.

And they know that there's going to be willing participants to be

buying it from them when they want to sell it for a profit at 1 0 9 45.

2 1, 2, 9 50.

So one to 9 45 to one to nine 50 is hit.

So the buy stops are used a pair long exits.

So now we look at, we have here, we have a wonderful example of how using

consolidations with the expectation of viewing the market with that

market efficiency paradigm to spoke about where we think like a liquidity

provider, we can still speculate.

We can see.

Hedge, we can still make a profit using the same model.

It answers all of the problems as it relates to trading, but specifically

it offers the answer to liquidity.

Providing buy stops are activated, and th they're actually, uh, um, given

the ability to, to be, uh, effective and sell stops at the same time.

So what the market makers do, we can develop by them.

We can say all those Rascals, they did this to me.

They did that to me.

Okay.

But what they're doing is their job.

They're providing liquidity, the absence, or lack of understanding.

Yeah.

Traders, have they attribute that as the, those guys, they, they

did it to me and they usually misappropriate that to their brokers.

But what it is, it is the market maker is providing liquidity.

And if you understand how the market seeks liquidity, that's the

number one driver in price action.

The market will always seek liquidity.

And where is the most recent area of liquidity?

That's been untapped with the least of resistance.

And that will give you the directional bias when you're a trader.

But when you see markets go on consolidation and you have an underlying

directional premise, or you arrive at one based on studying the market like this,

you can quickly ascertain trade setups and some, uh, signals will jump off the chart

at you by way of looking at it like this.

Again, we have to look at price with that market efficiency paradigm.

We do not look at it as give me a binder.

Okay.

Think like the market maker, if you had complete control of price, where

would you drive price at to allow other traders to get in and at least

facilitate their trades and least whether they're right or wrong.

That's not the, the, the problem here.

Where's the buyers and where's the sellers at.

And if we look at the market in this scope, in this perspective,

we'll know that we'll always have buyers above old highs, and we'll

always have sellers below old lows.

So if we know that that's where liquidity rests, all we have to do

is discern whether or not does the market want to seek the buyers or

does it want to seek the sellers?

And the way you get that indication is by studying when they go into

consolidation, what side of the market they reaching for, and then where's

the market going after it happens.

And here you can clearly see every time there's a consolidation.

The market seeks that liquidity below the market.

And once it absorbs it, it quickly runs the other direction.

Why is that happening?

Because the market makers are facilitating their long positions and building a

bi-model in the price or in this asset.

So we can expect to see every time the market goes below these consolidations,

these movements below it are always going to be viewed in our eyes as a false break.

So the false breakout that would trip up traders otherwise, or knock

them out of profitable positions, if they would have been, uh, remaining

long, we can view the marketplace with the market efficiency paradigm.

Seeing it as a provider of liquidity, see it, and just in the same scope or,

or perspective as a market maker does.

And then we're suddenly in line with the market maker.

We're not beating the market maker.

We're not trying to outsmart the market maker.

All we're trying to do is get in line with what their motive would be.

What's their Mo what ha how, how are they going to book them?

For this particular day or for this month or this week.

Okay.

How are they going to do that?

And by looking at the models that we're showing here with looking at ranges and

when they break below the ranges and we see willingness is to rally after that,

it gives you your first telltale clue.

Every time the market goes into consolidation, expect every drop down

below and old area of consolidation.

Expect that to be a false breakout and anticipate.

Accumulation of long positions and in the market, once they can accumulate

their long positions, then they will reprice the market higher running

for the buy stops above old highs.

But what else do you see here?

I mean, if you're looking at this, what else, if you were to study this for

a moment and I'm going to ask you to pause the video, study this for a few

minutes and see if there's anything else that jumps off the chart at you.

And don't be discouraged if, once I show you what it is, if it wasn't.

Yeah.

This first price swing from the first initial false breakout below

the old loads and consolidation.

Once that rallied up and we gave another area where we can buy again

at that 1 0 8 75 level, that, that red area, if you will, I guess it's red.

Um, it's a measured move from that same buy and it gives you

an approximation of where the algorithm will reach for, to offer.

And we see it reach up into that 1 0 9 25 level from 1 0 8 75, which is the

measured move from the initial low that it ran up and created that first red

box in the first impulse price swing.

Uh, the second leg in price higher is equal to that first one.

Also the larger price swing.

From that first initial buy all up to the enemy at term high or the

midpoint of the overall price swing.

Once we had that larger consolidation and it went down and traded into

1 0 8 85, when that happened, that same measured move from 1 0

8 50 up to 1 0 9 45 or thereabouts that same measured move from the.

The stop run at 1 0 8 85, that gives us a projected run up to that 1 0 9 80 level.

And you can see that was handsomely hit.

And ultimately that one a nine 90, as we spoke in real time at the time

of this recording in the mentorship, uh, which we spoke about that one a

nine 90 level being directly linked to the bear shorter block on a daily.

And all these things coalesce.

They, they start to come together.

They dovetail beautifully, but understanding each individual

component will help us bridge.

Vast chasm, if you will, of what goes on past the right edge of your chart.

Uh, you see a lot of times where I'll talk about things and I'll give you a scenario

of what I think is going to happen.

But specific levels that I think is going to go and be hit.

The reason why I'm able to do that is because I'm looking at the market,

just like I'm showing you here.

I'm looking at how the market maker is booked.

How is the market maker, manipulating price?

What side of the marketplace are they working on?

Where are they punishing?

Those that are less informed.

Okay.

And if they're seeking one side of the marketplace over and over

and over again, and they keep expanding price away from it.

In this case, it's been, the cell stops being ran.

Every time to sell stocks would be ran below a consolidation.

It runs higher and it goes to the buy stops.

It just that's the easiest way to see if we're really in a bullish

market or bullish market profile.

It's not as easy as everyone says with the textbooks where you draw a trend line,

it's sloping up and just every time it touches a trim on you by now, you gotta

look at where the orders are going to be residing, and it gets back to that

market efficiency paradigm by having that model and focus when you look at price

and when you see market consolidations, when it breaks below that, and you start

seeing the market trade higher, every time the market goes in consolidation,

they're priming the marketplace.

To allow cell stops to below build up below those consolidations.

And obviously what we shown here was just for a buy-side.

If everything was reversed and we were seeing consolidations in the market rally

up, taking the buy stops out and then quickly running lower and then moving

into a new consolidation and in market running higher running to buy stocks

and accelerating, going lower again, everything would just reverse itself

in terms of everything we've explained.

So I hope this has been insightful to you and look forward to our

third month in the mentorship.

So get your notebooks ready because there's going to be a lot more

information, but by way of price action, and we're going to be

focusing in on detailed concepts that has been shown in the free mentor.

Uh, free members area on my website and on the videos, but all the gaps

that I left in that free area of teaching, I'm going to, I'm going

to fill that in as we go forward.

So with that guys, I wish you good luck and good trading.