Original subtitles

Okay folks.

Welcome back.

This is lesson 2nd of November or the third month of the ICT mentorship.

Okay.

Want to talk about.

Institutional order flow and what makes it easy to see?

And we're going to be building a little bit on what we just mentioned

in the previous lesson, and we're using that Euro dollar example and here's

that order block we showed earlier,

we showed in the lesson.

You see, the open comes in at 1 50, 1 97 and the low comes in at

51 45 and the low I'm sorry, the high comes in at 51 51 and 51 43.

So very sensitive there.

The idea is if we see this on a monthly chart, okay.

We can go into the marketplace and anticipate an ideal scenario

to unfold in this area here.

Okay.

Now let's drag it out for that low cause it ain't that big.

Okay.

So we have that low to the opening price.

As we mentioned in lesson one, we discussed it there.

A high probability of stops resting below these lows down here.

But I want you to focus on is, look at, look how the bodies of the candles

basically merge at that same general area.

I want you to ignore the wicks.

Okay.

Ignore those.

And by having that in mind,

All below these lows in here, there's going to be a large pocket of

liquidity in the form of cell stops.

Now, if we're looking at the monthly chart like this, and we think

that there's going to be a high level of sensitivity up here, why?

Because it's already come up and close in this range by

coming up to this level here.

And if the market is most likely going to trade lower and seek the liquidity below

these lows here now, again for your notes.

When we're looking at institutional order flow, the idea is thinking

like that market efficiency paradigm.

Okay.

You're the market maker.

So what you're looking for is where is the maximum level of liquidity in

relationship to where markets have traded from and where they are presently

while the market has traded higher?

So where's the highest level of liquidity from this point here.

If it's going to go higher, it would be above here, but we had

this void that we'd closed in.

So the market's now rebalanced through a point at which they sold first, it

moved quickly away, came back up and closed in that range that created

by all these down black candles.

So in other words, the market has delivered price going.

It has to close in that gap by trading it on the upside.

So we're forever, wherever there is a black candle there,

it must be a green candle.

The idea is you want to see where the market will reach for,

for its next level liquidity.

We had the rundown here clearing out these stops market clears, those stops.

And then once it clears, those stops right below.

No, it's all this movement over here, all this running off stops.

Yes.

It moves back to a order block, but we're not talking about that.

Now.

I want to talk about how the market will seek liquidity.

The market will run up from this point here because it's already

absorbed all the liquidity down here.

And yes, just for completeness sake, it's returned back to a bullish

order block over here, which is the down calibrate for the up move.

So the market is going to do what it's going to seek a liquidity on the upside.

So where does that reside?

This up candle.

That's where they sold the last time.

And look, we created another liquidity void all these down candles.

Okay.

All black candles down.

Okay.

So there has to be the market offering on the buy side, they offered it on the

sell side to balance it, and it has to be green candles or up candles in this case.

Okay.

All my down candles are black and all my up candles are green.

So we had that same challenge.

Just repeating itself here or here.

Okay.

Now obviously we always look at the middle of the upper candle means

threshold, and you can see how the bodies of the candle respect that

there's always going to be this extra little outrun on price with the Wix.

Okay.

I've mentioned this in many, many instances over the last six and a

half years, teaching Forex online that you're going to have to allow

that, um, erroneous price action where it re run farther than right.

Uh, you probably would expect it to because of your broker.

Okay.

So they allow them to open the spread up a little bit more.

So when price trades up, it hits this area of liquidity now where we're going

to be expectancy, price, trade to, well, the largest area liquidity would

be resting below these lows, right.

Or this law rather look closely just like we showed over here

with the buyers of the case.

Okay.

We're gonna look at the bodies of the candles here.

Okay.

So classic technical analysis where we'll say, well, this, this WIC is the low.

And what I teach is it's the bodies of the candle is where all of the

volume is the institutional volume.

As a difference.

Now, the WIC is always going to be directly related to reading.

Okay.

Retail stops because we're looking at a retail platform.

Most instances you're going to see the wick is generally comprised

of retail pricing, the bulk of the bodies, close to the interbank

price as you're going to get.

So we allow the Wix to provide us a erroneous price delivery

or extreme price delivery.

But we want to do most of our analysis around the bodies of the candles.

So what does that mean?

It means that if we have the bodies of the candle is defined here as the real low and

allowing all this to be viewed as retail.

If we scrubbed the over tier, you can see how price trades just below the

bodies of the candle, as it would in terms of seeking the truest form of law.

From an institutional, uh, order flow standpoint.

If we're not going to break the range on this run here and we'll

teach about that in the mentorship, but for now we expect it to close

in the range here just as well.

We saw this up candle here, this down movement price comes

up and closes in its range.

Then it runs for the liquidity below here.

The point of what I'm showing here is once you understand where the market

will most likely reach for, and this is a monthly chart, now we can take a

step back and say, okay, if I can define the market in terms of, and we'll say,

for instance, say, say we were lucky.

Okay.

We were really plugged in.

We were studying and we felt that this market was topping out up here.

Okay.

And we knew.

That once this low was violated here, we would have a potential range of that.

Clearing out.

This consolidation staff will be resting below that.

Okay.

We would see reasonably expected to run through that.

We also know that we have a bullish order block right here.

Now notice it wicks through that, but the body of the candle, this body's candle.

Sorry, this candle is potty rather.

Trades right into this candle here.

Okay.

So that's all that's required to trade into bullet or block.

It's a monthly chart now, so we can expect some expansion through and the Rhonda

liquidity out here, look at all the wicks.

Okay.

The wicks are no significant barrier in terms of institutional order flow.

We just know that there's going to be a large reason to expect stock resting

below the Wix we're inside the Wix.

Let's say it that way, but below the bodies of the.

Okay.

So what we're seeing is we're seeing another area at which

we have price trading from the buys of the candle.

We dragged out over here.

Let me see price trades into that area right in here as well.

So it's seeking the liquidity below all these bodies of the candle and

the Wix and recapitalizing this.

You see the bodies of the candle looking out and respecting that all the bodies

stay above this candles abortionist.

Now we would reasonably expect to see price trading down

to that level at that point.

We see this willingness to want to be recapitalized in this bull shorter block.

And we clear up the stops.

The next area would be what to see price reach up into the void, which is up here.

So we would see price wants to reach up and capitalize this price level.

So we have an area at which institutional order flow is bearish.

Till we get down to here, then where's it going to do?

It's going to look for liquidity on the upside.

This is the area which you would expect to see price that wants to run up into.

So as prices rallying up, it's this all bullet show institutional

order flow is bullish here.

Then once it gets to this point here, we're looking for what

the stops below these lows here.

So we would see institutional order flow, swing to the downside, and

that is what's happening again.

The bodies of the cans.

It's violated, but this down candle here, we clear out the stops.

Okay.

And again, we've mentioned that it's retracing back into this

bullshitter block from here.

Where would we reasonably expect price to go up to again,

that's this bare shoulder block.

So you want to see price reach up to here.

So in this instance, we would expect to see what price rally up into this area.

So all through here, Institutional overflow is bullish.

Now I can keep doing this back and forth, back and forth and

show you example after example.

But what I'm showing you is from a monthly standpoint, you take the

information I'm showing you here.

And by example, and again, here's the bodies of the candle,

not the Wix, it stabs through.

To go below the bodies of the, like, it doesn't necessarily

have to go through the Wix.

We only need it to reach below the buys at a candle.

Okay.

So while we have institutional and flow, that's bearish when it's in the red area.

Okay.

All we're going to do is internalize the marketplace like this.

So if we have it set up like this on a monthly chart, all we have to do

is break the market down into a week.

Does changing into a weekly chart.

Okay.

So now we have the price shown in weekly basis.

All all through here, we have the marketing and selling condition markets

in a bullish market condition verus market condition, bullish market

condition, bearish market condition.

Okay.

So now what we've done is we've mapped out this entire.

Euro dollar from mid 2008, all the way to mid 2012, just by understanding what

the monthly levels on institutional order flow will give us and understand those

points of reference that I showed you in.

What to focus on because that's, that's the recipe for all the trading

you're ever going to want to do.

That's it that's the secrets.

Okay.

But you have to find them on the higher timeframe and arrive at where the high

timeframe charts you're going to seek liquidity, because this is where the

large funds had their money and where the large money is found on the fund level.

That's where the banks are going to reprice too.

It's not for the retail people because you're too small.

If we're selling or expecting bearishness in here.

Okay.

This decline sees a retracement back up into, and yes, it wicks

through and wicks through.

But the body of this candle is where you'd be looking to be a seller, but

this wick never violates this up candle.

So we have a bear's shorter block retreated to and expands lower prices.

Creates a down candle here, right before this up move in in a time where

expected institutional overflow should be seeing price move up into that.

They are shorter block,

great areas where you expect to see buying in an area at which bullish

prices should be expected until it gets to this level here, which is at monthly

bear, shorter Blockly shown on a monthly chart, then price would be reasonably

expected to go lower to seek the stops.

But yeah.

These candles down here, the bodies of these candles, and

that's what you see here.

But look how the Martin look out in the market provides us an opportunity of

real crystal clear, uh, delivery, a price where we see price repel breaks down.

Okay.

When does it become apparent?

That is going to go lower.

See this candle here, here, here, here.

This last up candle.

That's the last green one.

When that candle is a violator right there.

Right here on this black one.

Now you're going to be expecting price to expand on the downside price.

Does it here trades a little bit lower.

Then we have a small little retracement higher.

What's the trading back up into this down candle, which is a breaker.

What's it breaking the highs here where the initial sellers would

be having their buy-side resting.

And then we clear those out and we go lower.

But this down candle is where they're going to populate new selling.

Right there.

And you could see them selling it right here.

There's other mitigating the longs.

They use to buy the price higher.

They make, they take those orders off and then you see the acceleration going lower.

All this area in here.

Okay.

We have an up candle down, move retracement back up into what,

what is this bare shoulder block?

So what this bear order block.

okay.

Bare shoulder block right in here.

It trades up into it and immediately sells off again.

What's institutional order flow, reaching for the stops below.

But why is this signal forming here?

Why is this pattern forming?

Because it's undoing the buys.

It was used here or the down candle is a bullshitter block

and they should be buying there.

And it does look at this boom explodes.

This cell is unwinding.

The lungs they put here, everything is a hedge on in their bank.

Okay.

When you've seen price move from one level to the next, there's all buying

and selling, going back and forth in between those two range extremes range

extreme down here, range extremes up here.

Then there's another range extreme here.

Another range extreme here and Lorraine extreme here.

Okay.

So in between these two extremes, there's going to be hedging.

There's going to be bookmaking where the, the bank could have a net bearish book

here and be making money as it's going lower, but they have to be buying too.

And while they still may see price going here and selling, they have

to take the orders off that they use over here that are long and attitude.

That's why you're seeing the unwinding right here.

Everything is going to be the opposite side, go over to the left

side of the chart and you'll see whatever they did to go along.

They're going to take that off on the sell side.

Okay.

Which is the basis of a macro macro cell profile, which is what this is.

That's consolidate.

Return the consolidation accumulation or accumulation smart money reversal,

low risk short and redistribution.

Now other redistribution and the market reaches below the

consolidation of your taking out.

Those stops.

Once the stops are cleared out, they're going to look for another

layer layer of institutional order flow for the opposite side.

Okay.

So that's going to be in the form of.

The return back to this bear shorter block, which was shown on the

monthly chart, the market trades up into that level here, but between

the point at which it hits here.

And once it creates the run on the stops over here, we would be any bullish

institutional order flow environment.

So we would expect to see the market trade back into down candles to be rebought.

No one's new buying should be seen there this down candle rate for the up move.

You could see the price.

Two candles whipped down into this candle right here from the high

down in the middle of the candle.

It wicks into it here, and this is kind of hard to see, but that

candles low comes in at 2151.

So 2151 is a low, this candle is low.

So it's down here and you can see that's what I'm highlighting right there.

The low it's inside this down candle.

So it's buying, explain the expand price out higher, then

you'll have a retracement, okay.

Price.

Retraces.

Traits into what this up candle.

So what's this, they sold here last up candle is they sold why they sell there

the dry price below these lows in here.

So there's your, uh, your run on stops.

So the up candle they used right here to get sellers the low the

marketplace with their sell stock.

Why would they want the sellers?

Because they're sales not to become marketers, to be buyer counterparty

to, so where does the sell stop loans?

They will activate them and buy them smart money will buy that once price trades

through that, it'll come back down and trade right back into the last candle.

Why are they doing that?

Because the shorts that they have on, they have to take those off and mitigate them.

So this wick down to the body is a mitigation block.

So price comes down and hits that level here.

The shorts that they use when the price was going up, remember smart

money sells as it goes higher and he drove it lower to run the stops

price traits through that category.

But their orders are under water now as it's up here.

So when price comes back down trades in that same range, from the high down

to the body of the candle, they can take those shorts off and buy them.

And then you're going to see X explosive price action.

Why?

Because it's going to be buying a cover on shorts that are here and then

buying more for new net long position, and you'll see expansion aggressively.

And you see that here.

So now you have down candle right before the other.

In a time when institutional order flow suggest prices should be bullish

while we're in that shaded area, price trades down into the bowl.

Shorter block, new buying should take place.

Expand up.

Now, when we seen buying down here or would expect buying in here, the

reason my expectation would be the C price trade up to this up candle.

First.

That's your first objective then above this high for style.

And then expansion up into closing in this range here into this bear sh order

block, which is his last up candle comes back down by ball, shorter block, expected

to run through here and back up into the mayor, uh, monthly bear, shorter block.

And it does that handsomely here, suites it out, and then we can see what price

breakdown again, having those gummy bears.

Cause it breaks the last up candle at an area where we would expect to see bears.

Breaks it here it comes right back up at the bottom of this

up candle retreads to it.

You can be expecting downside movement in price.

Price starts to break lower.

One more time.

Read trades back up into this bear shoulder block for

good measure breaks down.

Now it's going up.

It's going to go lower trades up one more time.

Works that same bear shorter block here.

Finally gives up the ghost and trades back up into this high here

price rate trades, lower reaches for the liquidity below here.

Below the bodies of the candles over here, over here by reaching down

and then ultimately reaches below these lows and back down into the

bowl, shorter block, right over here, which is what we're seeing here.

So if you start with your monthly and you break down into the weekly chart,

we can go down to a daily chart.

Now let me see a lot more definition on the daily chart.

Bullish candle, which is the bare toter block because the price drove

lower retreats rate back into the bear shorter block right here, bodies

respecting the middle of that up.

Candle sell off market creates bullish, shorter block rallies through clear

and short-term highs retrace back down to the last down candle bull shorter

block rally down candle propulsion.

Rallies up small little drop down hits the exact high that candle here.

High comes in at 28 0 2.

The low in this candle comes in at 27 95 into this body's candle.

I'm sorry, this candle spotty rallies all the way up into bears.

Now again, we're in a blue shaded area.

So while on a daily chart, it's dropping lower, lower, lower, lower, lower, lower,

lower the institutional order flow.

And the monthly is telling you to get ready for a buy.

So we get down into these levels in here, expect to see some buying, but

we have to wait for price to want to show a break above a short-term high.

We see that short-term high violated here.

So now we know buyers in market.

Again, wait for the comeback down into.

That monthly bull shorter block.

We see it traded in here, but now look what happens this

down candle here, rallies away.

It comes right back down into it now on a daily to the daily here.

It's that, but shorter block.

And then look at the re look at the reaction expands quickly.

Now we have this down candle.

Draw that out in time by here, by here, rallies up this down candle

key falling institutional or.

The highest 34 36, the low is 34, 23, right into this down candle.

Again, buy it again.

Boom explodes keeps going higher and higher, higher

and goes into consolidation.

Every new buying finds a down candle.

You go right back to the previous down candle.

Buy it again, rice price rallies, again, price dips back down

into what does down candle here.

Buy it again, down candles in here.

All one order block, halfway point through that right there.

Boom.

Buy it again.

Rallies through, keep in mind of the monthly and weekly order blocks.

We're seeing it again in here.

You see the response?

Boom.

It rallies.

That's why you don't see anything right.

Notice there's no bullish order blocking here.

There's no, uh, any, any kind of point of what you would see?

Oh, this is what that would be.

No, it's found on the weekly and monthly.

That's why you see this response here.

Price rallies away.

It comes back down trades into bearish candle, which is the bull sorter block.

And then something really did it traded right into, uh, the low 46, 26 into

this order block right here and rallies.

Again, you can see the shaded area we had again from the.

Rallies again, explodes up into monthly bear, shorter block.

Last up candle right here.

This one, when it violates that, does it here expect to see bears.

Miss wait for it.

Boom.

It breaks.

So when price breaks down, you're going to be waiting for a return back to a,

either a breaker or a bear shorter block, or you can look for a stop run on an old.

So we're in an area where we expect the seed markets continuously moving lower.

Okay.

On the daily chart, we can be using all these old lows to see price,

reach for them or expand down.

So institutional flow is suggesting lower prices, especially for

the monthly and the weekly.

Now we're in a daily chart timeframe when the institu or flow should

be weak or bearish, when the market creates a return back into.

A monthly order block here.

It becomes a mitigation block on a daily chart because now we're

unwinding what we used to be bought here, which is a breaker.

Was it breaking this old high that's we're already seeing it right here.

You can clearly see it happening here on a daily chart, but it was

seen on a monthly and on a weekly,

all through here, all through here in this red area.

Every single time the market creates a new VR shorter block, or if it

creates a run above old highs, we see the old highs here runs through them.

Sell off old highs in here, runs above it, sell off old high here runs above it, sell

off, and we also have bear shorter blocks.

Last up candle rate for down move sells off.

Last that came over before the downloads.

Retreats back to it sells off last up candle, even in a sloppy mess, right?

To the body of the candle right there.

Boom.

Now we're in a bullish area on institutional order flow and you would

expect to see all these levels, which were being found on the monthly and the weekly.

Look at the sensitivity that you see on the daily.

Now we have the last down candle here, right?

For the up move price trades into it here.

And it's on a hard timeframe.

Down candle here as well.

Buy it again, buy it again.

Price explodes.

Look at the sensitivity right there.

Again, this level was arrived there on the monthly and weekly and look at

the responsiveness you've seen price.

And was it reaching for liquidity above the old high, in a bear shorter block?

So, what you're doing is, is what institutional order flow is.

It's the seeking of large institutional liquidity, and it's going to be found

on the monthly and the weekly, and you see that being traded into on the daily.

That's why I tell you on the daily chart.

And again, this is why we're looking at a daily.

Uh, the daily chart will always seek the fund level institutional order flow.

In other words, the stops that are found on monthly and weekly.

You're going to see all your signals to have the greatest magnitude.

The biggest moves to take place are always going to be found on that

monthly and weekly basis, because that's where all the large whales are.

Okay.

When I say whales, I'm talking about big funds, large funds.

Okay.

And when they have money, That's where the market's going to go, because that's

orders that they can counter party with.

The banks cannot counter party with you.

And I, we just not big enough, even collectively we're not big enough, but

the funds because they're controlling billions and billions of dollars and

there that's where the money's at.

So if you can find the levels on a monthly and weekly chart, keep

them on your own, your daily chart.

You'll be able to see all these major shifts in price.

That sometimes jump off at you after the fact that you wish you

would've known they were coming.

Um, now you know how to see them by transposing them from the monthly,

the weekly, into your daily chart.

If you do your trading around these levels, you will see every

significant price swing that they ever transpires on price.

You'll see them coming before they.

And you'll also know relative to institutional or flow where the stops

or liquidity is above the marketplace.

When you're here and you buy it, or when you expect a bullish scenario

unfold, you'll already know where the market should be reaching for it.

Should it take off and start trading higher when it goes up to a level of

resistance or some kind of bearishness before you even sell short, you're

going to know where it's going to be reaching for, which is a sell stocks

below the recent lows or a bullshitter.

And by having an idea of how the market will continuously look and seek liquidity.

It's not our liquidity, it's not our stops.

It's looking for, it's looking for the stops, found on a monthly

and the weekly and daily, because that's where the whales reside.

That's where the large funds reside.

And that's what pushes price around understanding that that's why the market

will go to these levels because it's wanting to take those participants either

out of the marketplace or draw them in as counterparties to their intended.

Either being a buyer counterparty to sell stops or to be a seller

counterparty to buy stops.

And that's the nature of institutional order flow.

So with that guys that wish good luck and good trading.