Original subtitles

Welcome back folks.

This is the third teaching of eight from the December

content of the ICT mentorship.

We're gonna be talking about reinforcing order block

theory, selecting and avoiding.

And we're gonna first talk about.

The bullish order, block, everything I say here, you'll just reverse for

a bearish order block to save time.

Definition of a bullshitter block is the lowest candle or price bar with a down

close that has the most range between open to close and is near a support level

validation of equal or shorter.

Is when the high of the lowest down candle or price bar is traded through

by a later formed candle or price bar entry techniques using a bullish

shorter block when price trades higher away from the bullish order

block, and then returns to the bullish order block candle or price bar.

Hi, this is bullish and can be used for a bullshit.

Defining risk with bull shorter block.

The low of the Bush older block is the location of a relatively

safe stop-loss placement just below the 50% of the order block.

Total range is also considered to be a good location to raise the stop loss.

After price runs away from the bullet shorter block to reduce risk whenever.

Okay.

Let's take a look at a supposedly support line.

Now that can be in the form of a old, low, on a long-term or higher timeframe chart.

It could be an old high or price has moved above recently, and now

we're trending back down into it.

So simple support resistance ideas are just enough here, but what do you mean

thing is you want to be using it on a hard timeframe charts, like a monthly.

We cleared that.

And eventually you'll see price trade down into this level that you

identified as a support level, once price trades down into the support

level and they could trade to it or just through it, doesn't make a difference.

What we're doing is, is we're waiting for price to show us indications

that smart money or a large body.

Big flows or those individuals that are on an institutional level that

have a whole lot more collectively than we do in terms of money.

When they participate in a move, it will be seen in price action.

So when we have this down candle, we have already are assuming that

this may be a bullet shorter block.

We don't know that yet until at a later time when another candle trades through

it, what are we specifically aiming for?

Identifying our focus, the down candle's high, when that is violated with a new

candle and it trades through that high.

Now we have a validated bullish order block.

This candle validates the down candle as a bullish order block.

Now this moment, if we trade back down, Once that down candle or suspected

bullets, shorter blocks highs violated.

We can now highlight that candle's high.

And even in the very candle that broke that down candles high, if it trades back

down to that down candles high, or the bullet shorter blocks high, that could be

a Retraded price that which we could day trade off of or enter our longs early.

In other words, we don't have to wait for a late.

Time for it to trade back down into this level.

Eventually price will run away at this point.

If you didn't enter on a retrade at the bulls or blocks high,

you're simply going to be waiting for price to want to pull back.

Now we have indications that there has been displacement in the marketplace.

That means someone with a whole lot of money and a whole lot

of interest wanting to see how.

Is now in play, they are participating in the marketplace.

This is the evidence in price action that you have institutional

sponsorship behind the move.

Large flows.

Institutional traders have the capacity to move price.

Whereas we as lower grade traders in terms of retail or smaller traders, in

terms of, in respect of a bank or a large entity in an institutional capacity,

uh, we can't move the marketplace, but they, as a whole collectively can.

So, what we do is we wait, we're patiently watching price.

We anticipate price.

Start to retrade back down into that down candle or bullet shorter blocks high.

At this moment, we can set alert.

We identify the high on that candle.

Now I'm using the bodies of the candles.

You may end up using the WIC, but I want you to focus primarily

on the bodies of the candles.

And when we talk about Wix, I'm going to overlap order blocks with fair value

guests, because there's going to be, to answer to many of your questions

is to relate to when do we use the Wix and when do we use the buys of

the candles, but primarily I want you focusing on the buyers of the candle.

When we're talking about water blocks as a whole.

So at some point when we see that level, okay.

That high, that order block, when we're close to it, we can now set an alert.

We can set our platform to remind us with a text to our phone or

email us, or however it is that you would be alerted by your platform.

Some platforms have pretty sophisticated means of contacting you.

Others are just simply.

You know, an audible alarm that goes off on your computer to draw

your attention to a specific market.

But until then, you're going to submit to time you're waiting.

Now, this is sometimes the hardest thing to do as a trader.

We identify what we're looking for in terms of a entry, but you have

to wait for price to get down there while price is trading lower, you

should already formulate an idea of what it is that you're going to do.

In terms of risk.

How much are you gonna put on a trade when you buy long and where you're

aiming to get out of a market with.

All those things should be factored in during this time.

Eventually price will drive down into that down candle or bullish

order of blocks high at that moment.

And if you're in front of your charts, that's when you enter the.

With a long position.

If you have a limit order, you're going to add a few pips and

preferably it's about five pits.

We like to add to a bullish candle.

And that way the spread will be able to kick us in on a long entry, but you don't

have to always rely on a limit order.

Uh, you can go in right to market as it hits that down candle.

Now sometimes it'll drive a little bit deeper into that bullish

order block and that's okay.

But for now, I want you to try to key off your demo entries on the Downton candles,

body of the candle, the high or the open in this instance, any down candle.

Um, the body is going to begin with the opening and ends with the close.

What we're actually looking at is internal range.

Now when we're trading inside the range and that range is defined here.

What we're looking for is an expansion up and to a known

level of what what's up there.

Well, that's going to come in the form of external range liquidity.

The external range liquidity is where we're going to be looking

to offset some or all of our long.

Now we identified the bi-level we've entered the market before we do this.

What we've should have had in mind is I ideally, where we're

looking to take our profits.

That's up here above an old high, and that's going to

be in the form of buy stops.

So if we're buying or entering long inside of the noon range, Eddie

shorter block at internal range liquid.

We're buying that liquidity it's offered at that level.

We're going to be looking to sell our position to willing buyers in the form

of those individuals that hold by.

Stop above that old high that's all well and good for profit taking.

But what do we do for risk?

We take our attention back down to that bullish order block, because

it's going to give you everything you need for your trading plan.

We identify the entry at the.

Oh, the down candle, that's our by point or five pips above it, but we

want to focus our attention in the midway point of that down candle.

That's going to be in the form of the mean threshold.

Ideally, the best older blocks will not see price trade down below the

midway point of the entire body of the.

You're going to measure the open to the close on the down candle measure, where

the middle of it is, do not use the wicks.

Don't use the very high or the very low measure.

Your Fibonacci level 50% level or halfway point is the mean

threshold on a bullish or block.

And same things said with a bear shorter block, but you just don't

want to see price drive down deeper than that means threshold by very

much, it can stab through it just by.

But we primarily don't want to see a trade down there at all, do better

or blocks won't deal with it at all.

And your protective cell stop is going to be below the bullish order

blocks low or below the clothes.

Now, at this point, depending upon where that low is, it could be the low of the

WIC, but primarily going to be looking at.

Torn by the close of the body, that candle

now, again, focusing on what we anticipate in price, eventually price

should show a responsiveness and trade up and through our old high, when that

happens, you're going to be looking at.

Partial profits or all your profits depend upon how big that Moodle is and

how much profitability you've obtained.

What you're actually trying to do is you're going to be pairing your

long exit with willing by stops.

And that is essentially bullish order block trading.

In a nutshell, it's been complicated by many people.

Hmm.

The YouTube that's adopted it.

And those that want to use it on Twitter and on social media, they've shared some,

several ideas, but I want to focus one, the simplicity of them here, and then

we're going to graduate into more team.

Uh, later on in this month that are going to be subordinate sub topics

that are going to be taught to you during the week of Christmas.

So I'm going to give you actually more amplified teaching with the order blocks.

So this is not the entire treaty on or blocks as it

relates to buying and selling.

Okay.

Liquidity based bias.

Okay.

If the monthly chart is bearish, the weekly charts, bearish, and the

daily charts bearish, that'll give us a wonderful opportunity to get in

sync with institutional order flow.

Intraday charts, four hours and less will be correcting and retracing higher.

Now, again, the markets are predisposed to go lower because the monthly, weekly,

and daily, we have arrived at a bias that we have seen price wanting to go lower.

It's been making lower lows and lower highs.

Support levels are giving way resistance levels are being formed at Reem respected.

When you see those evidences in.

Well along the lines of the monthly, weekly and daily, we

can zero in on the four hour.

Okay.

And start looking for liquidity on the buy side.

In other words, there's going to be a premium built in, in

the marketplace or a rally.

You're going to be looking to sell rallies protected by stock rates

or returns to bearish order blocks or fair value gaps and or filling

a liquidity void each offering a potential low resistance liquidity.

Shorting for a target under a recent low, what low would you be targeting?

Well, you want to be primarily looking to see what's near term on a daily chart.

What liquidity is resting on that daily charge at your trade?

I want to short could be looking to take advantage of buying back below a daily

low, where sell stops will be resting.

If there is an objective that you can see on the weekly.

Much in the same way we would have identified something on the daily.

We would be looking for that objective as well, primarily uni trading in

the direction of the monthly chart, because that's where the large funds and

institutional order flow is going to be.

And then it moves down into the weekly chart.

Then it moves down into the daily chart.

The daily chart is the most dynamic of these three timeframes and

you'll see a lot more trade they're actually counter long-term higher

timeframe, institutional order flow.

So that weekly.

We'll have a lot longer time period required to change direction versus

the daily chart that can go up and down in multiple times and

still maintain the bearish nature of the weekly and the monthly.

And obviously the monthly takes a long time to change directions.

And that's where the power of what I'm going to teach you in

this module will give you okay.

Liquidity based bias for.

Monthly chart, bullish, weekly chart and a bullish daily chart and

straight charts, four hours or less.

We'll be correcting and retracing the lower.

This is where you anticipate the market to enter into a discount and

seek, sell side liquidity to buy.

And what we just showed you an example of was the bullet shorter blocks

that you would use in this instance.

And we're actually going to go into the dollar index and actually break it down

and show you all this, uh, conceptually protective cell stock rates or returns to

bullish order blocks or fair value gaps and, or filling out a liquidity void each

offering a potential low risk liquidity.

Buying for a target above a recent high, just like we were referring to earlier,

you're going to be aiming for something on a daily chart, preferably, and you're

going to be looking for by stopped by the marketplace on a daily high, it could

be an, it could be yesterday's high.

It could be last week's high that you can see on a daily chart.

It could be last month's high.

Uh, it could be inter we Chi.

Okay.

But try to find something on the daily chart, um, to give you a true.

In terms of, uh, framing your idea that you want to be a buyer and then preferably

look for something in the weekly chart that was supporting the higher, because

if you have something higher on a weekly chart, uh, you probably will have a

lot better odds behind your trade.

If you're looking to move into a level on the weekly chart and in preferably

obviously, um, the monthly chart, if it's bullish, you'll be in sync with

the institutional order flow that would be seen by studying that time for.

So let's take a look at the monthly, weekly and daily on the dollar

index and give a conceptual idea of what I'm referring to here.

Using bullish.

Horrible.

She take a look at the resistance levels.

See here

at equal highs here.

Okay.

And price came down and hit a, a level of.

Support.

So that happened here.

Okay.

So we know that there's equal highs up here.

So what's above equal highs.

What was taught to you in September?

It's going to be in a form of by stops.

It's tuned, clean too.

Neat and price come down, cleared out an old low, but

we're not going to talk about.

Stop runs here.

We're going to look at this as a support level.

Okay.

All we're doing is classifying this as a support price comes down and hits that.

Okay.

And we're going to wait to see if there's a willingness to trade away from it.

We see it happen here.

When that occurs this up candle violates the downcast.

Right before the level was hit at this support level.

So once we have that,

we now have a order block that's validated to.

Now we can be a buyer.

If price comes back down into this candles opening.

Where it starts to body the candle, uh, that the price level is 94, 58.

And this double check that the opening is 90.

4 58.

Yes.

Correct.

So when price trades back down into it, as you can see here, move over a

little bit more, show more data, price trades down into it on this candle.

Now it quickly moves away from it on this candle here.

But at that moment when it hits this.

Okay.

The, the low on that candle

comes in 94 0 7 94 0 7.

And the level we had here is 94, 58.

So about, uh, about 50 50.

Thereabouts in terms of movement through the level.

And again, this is a monthly, so a little bit of flexibility is necessary.

I'm looking for very easy to find low resistance liquidity

runs with a board order block.

So when price hits that this particular month is August of 2016,

So we could expect to see some bullishness in August and I'll let

you see the rest of the data here.

You can see clearly that the market did in fact trade all the way up through

the equal highs here to present time of this recording, uh, December, 2016.

And we're going to take another look at this down candle here because this order

block becomes another support level.

Remember if we anticipate bullish price here?

Doesn't that by nature support price in the form of support and resistance ideas.

So this level here, if we see a down candle offer that level, that could be

a potential bullish or block as well.

Remember, it's going to be trading down into that level.

Why are they doing this?

They're going down there to pick up.

Opportunities to get long at a cheaper price, more discount price.

So when price was a bear can locate here, that's when the order

block would have been hit again.

Okay.

And then what do we have here on this candle?

It violates this down candles high.

Okay.

And the open on that candle is the openness 95 90.

And the level is 998 on our level here on the segment.

And you can see price hits that level here.

It opens on this candle and trades all the way down, hits it.

This would be another support level to anticipate seeing prices trade higher.

So we're going to do this.

We're going to drop down into a weekly.

And we're going to start looking at this month here and we're going to put a work

align there, delineating everything to.

Right of this vertical line and I'm going to highlight big and bold, so

we can't miss it and we'll just make it a big, old, bright red color.

Okay.

So now we're going to drop down until a weekly.

And we'll see how this gives us a weekly

bias as well.

Here's here it is here.

Price trades, gallons of that level.

Okay.

Price rallies away, one price rallies away like.

We're going to be looking for an objective to go long on this

level one here, right in here.

So how many times that price move away from this down candle is by and identified

again, we'll go back out to a monthly.

That's this level here.

So in may prices validated that order block in may.

Okay.

So we're going to move over into may.

Okay.

And here's that water block level on the monthly chart.

Surprise trades down into it here.

And we wait to see, does price want to rally away?

We're in, this is the level you have to be identifying.

Cause it's the monthly order block, the bullshitter block on a monthly level.

So we're going to broaden that one up a little.

Okay.

And then price is trading down into that.

So what are we waiting for?

We're waiting for evidence to support the idea that deed large traders

want to send price higher price.

It does that here.

It violates this down candle right here.

It's it's high as broken right there.

Okay.

Right there.

So now this quarter block on a monthly level, can we refine.

to this level right there.

Okay.

So price traits through this downstairs.

Now this down candle on a weekly has been refined from a monthly level.

So now we can anticipate this level.

If it's traded back down into it, we could be a buyer at that level.

We see that happening here, price trades down into it, noticed it down

candles, midpoint, or it means threshold

Right here.

Just pierces it just a little bit, but does not go down below

the body of the down candle.

What do we do?

We identify we're in a range.

The range is this low to this high it's trading back down into internal

range, liquidity absorbing some more buys in this down candle.

We should see the responsiveness on the upside.

Now mind you, this is a weekly chart.

Look at the body's recent.

Oh, this down candles opening.

Okay.

Yes, it trades down through a little bit, but we could be a buyer at

that level here with the expectation that we're going to see a run

where at right above these highs.

Okay.

Right.

About these highs.

So now here's when bearish order blocks are not considered this up

candle rate for this down move here.

We would not look to that as a selling point.

We don't look at that as we're going to get short here, when it trades up to that,

this up candle, we don't look at that and say, okay, we're going to get short.

Why?

Because the higher timeframe is suggesting we're going to be going higher.

Overall long-term in the long-term trend direction is going to drive a

lot more significant price action.

Then looking for cells.

In other words, we're going to be looking to be buyers on dips and

selling on the rallies to take.

So that's when you want to avoid a bear shorter blocks because you're standing

in way of institutional order flow.

So there's going to be by stops above these highs here that we're going to

sell our longs to their willing buyers.

Great.

We're going to be willing sellers.

If price gets up to that point from down here in the form of pips,

we have a range.

Of almost 300 pips, 290 pips potential range there.

Okay.

And there's nothing wrong with that.

So now also we have this level and here we can be keying off of on a

daily timeframe and we can use a four hour timeframe as well to refine.

We're going to look at this level here.

Price shows a willingness to want to move away.

And it does.

We can now identify this level here, which was the other monthly

higher bull shorter block.

We're going to refine that level to what, how are we going to refine it?

But we have this down candle right before the price moves higher.

This candle trading through the last down candle right here

that validates this down candle.

It's a bullish.

So we can borrow this level for a moment,

put it right on the opening.

Okay.

Price validates the bullshitter block right there.

Okay.

And you can see that it trades back down through it.

In this instance, we didn't get that much of a move away.

We wanna see price, move away.

We want to see that.

Preferably, what I'm looking for is a move of whatever the order block is.

Now this is a notation for your notes.

Okay.

Cause this is the first time I've included this.

If you see a move, here's your order block.

What I like to look for is two to three Heights or the range.

If you will, of the order block, I want to see at least two to

three times that as it rally.

And that'll give me a nice, decent expectation to see a retracement back

into, to get an opportunity to buy long.

We have that

there price rallies up to this point here, and then it comes all the way back down.

Into what we have this down Canada, we could have kept that there.

And it would, we would've missed any new opportunity, but look what we have here.

This down candle has traded into that older block as well.

So now we have a higher bullish older block right here, because this candles

open is higher than this candle.

So now we can refine that same level.

Just up to a higher timeframe or not a high timeframe, but a higher order block.

So now we can refine our level to that point, right there.

Price moves away trades through this candle's high right here.

Validating this as a bullet shoulder block.

Again, we're going to be looking for a rally of two to three

times to order blocks bodies.

So it has to trade about here, here, here.

So at this point here we have a valid swing.

So now we can look for, or retracement back down.

This candle's opening is 95, 85.

The low on this candle is 95, 87.

So it's only two pips away from that.

The high on this candle is 95, 86.

So it still was only one PIP away from that.

But we always add pips to our levels to get in, to cover the dealing spread.

We also see another higher down candle that's higher than this one.

We have to move our level up to that new down candle.

Every time it creates a new down candle, that's going to

be the new potential Bosch.

Bryce trades down into it here.

So there's another opportunity to be a buyer here.

So that's what we do from a higher timeframe to a lower timeframe, refiner

entries, and our levels with this in mind, price makes a run through.

Even after taking this level out here, you can take partial profits out here.

Okay.

Take a little bit more profits out at all.

Weekly high here.

Remember, we're looking for weekly highs, take profits at,

and then leave a little bit on.

And when price comes back down, we can now add back on the positions

we took off here and here.

Add them here as new longs and its price rallies through to

external range liquidity, which is this high here entering it.

Internal range liquidity at this bull shorter block here.

The range again.

About 310 pips

just to get first profit here.

Okay.

And then you're gonna look for an expansion to continue to take out

this high here in this high, here for what external rings liquidity.

What's going to be above these highs by stops.

So you're gonna be looking to sell to those participants that would

have an interest of buying them.

Above these highs, refining it further into a daily timeframe.

You can see all these levels get much more refined.

You can see the reactions about these levels again and now

because these are weekly levels.

We can see the reaction at them on a daily basis.

The levels are traded back down into.

What was shorter block, the weekly level that we transpose over here until

it daily, we can see that this down candle to down camels on the row on

any timeframe, you have to blend them together to get one full quarter block.

In this case, it's two down candles as one full Bush or block.

So we can refine that here.

You used the wicks and the bodies to look for that as well, but we're

going to focus primarily on the open.

You see a headset here.

And this is all during the election, which I personally was on the sidelines.

It did not do any trading.

And then recently we had this down cam that we talked about prior to this

week's trading that week ending December 16th, 2016 in a pre-market analysis.

I told you to focus on this down candle prior to.

This big move up.

I said that we would look for the mean threshold of this down candle.

Why?

Because I don't think we're going to get down to this down candle wasn't

necessary because I viewed this as a run on stops, which we'll talk about

in the next teaching, but we traded right back down into the middle point

of this down candle or mean threshold.

And then we expected to see what happened.

External range, liquidity above this.

And then continue higher reaching into the higher timeframe levels.

We were looking for a 1, 2, 3, 1 to three 50 and then 100 fours next, ultimately

one to five, one to seven, still in the cards for dollar index longterm.

So you can see how dynamic working from the monthly levels to the weekly levels.

Refining them waiting for confirmation to there is a displacement by smart.

And then simply waiting for those levels to be Retraded down into, and you can

refine these as small as you want, but going into as low as a five minute chart,

if you want the ultra really, really low risk entry and small stops, but you're

looking for the direction for the monthly, the weekly and the daily, they get you

a directional bias and only focusing on those hard timeframe directions.

Those order blocks are the ones that you buy.

Those order blocks also.

Um, we'll keep you from taking focus on the bear shorter blocks because

while bears or blocks or the last up can the rate for the down moves

that you see in price, those are good objectives to take profits at.

Okay.

Um, if you hit a bearish order block during a time of day when profit taking

shouldn't take place, guess what?

You may not get that run above and over.

You may end up having to take profits at that bare shoulder block and then wait for

Asia and prank effort and let London to retrace a little bit and then dry through.

And then you'll see that run on a new hire high or capturing

external range liquidity.

So there's a lot of factors to get to keep in mind.

This teaching was to focus your attention more on only getting on the long

bullet, shorter blocks when the monthly and the weekly and the daily show.

You clear indications that the market's being accumulated and

only using bear shorter blocks.

Okay.

To take profits when time, day is an impact.

But if time of day is not in, uh, in effect, you don't even

consider the bear shorter block.

You might expect him to pause and consolidate there, but you're looking for.

The dry price through an old high to absorb external range liquidity, because

they're going to look to take profits at a higher price, not just an old

high or inside of an old high, they're going to try to build a premium in and

expand that range because it's going to draw in more participation, more

excitement in the form of the funds.

And that's what this business is all about.

Drawing allocations from large institutional traders that trade

managed funds and a larger position.

So with that guy to wish you good luck and good.