Original subtitles

Okay folks.

Welcome back.

This is teaching number five of eight for the ICT mentorship

content for December, 2016.

Deal with specifically the reinforcing of liquidity voids and

when to anticipate ranges to fill.

Okay.

I, liquidity void is a range in price and delivery where one side of the

market liquidity is shown in wide or long one-sided ranges or candles price.

Typically we'll want to revisit this porous range or void

of contrary and liquidity.

Can we, we're going to look at an example of a liquidity void and when prices

in a small consolidation or a trading range, we call this price in balance.

In other words, prices in point of equilibrium, at some point price war,

eventually move out of the consolidation.

When this occurs, we know that there's our participation in the form of smart.

Smart money is the only one that has the deep enough pockets to cause price, to

move out of consolidations or move at all, really in any significant manner.

This causes a price imbalance, or as we call it, displacement

price can stay away from that drop down aggressively, where

there was only two or three cases.

That moved away from that consolidation, that rain.

I can stay open for a while.

There's no specific time limit on how long it's going to take

for these voids to close in.

And that's one of the re repeating questions I get a lot.

Is there a way to know how long it's going to take for these w uh, to fill in with

avoid would be in terms of how fast and when can we reasonably expect it to fill?

Uh, that's all going to be.

Uh, germane to what you're seeing in the market at the time you see the voids,

uh, they can stay open for months.

I can say open just for a brief session intraday and it can close it in.

It's all going to be relative to what you see in price action around that before.

Now, when I say void, what am I specifically looking at?

And we're referring to it's this small little area of price action, where it

was only delivered on the downside.

We have, we have long bodied candles where price has only

been delivered on the downside.

And it has a small little gap in between the two biggest downcast.

This is what we've framed as he liquidity void.

Now this is a one-minute chart because at one minute charts got, and give

me the opportunity to show you how there are pockets in these big runs.

And not that this is a big run in terms of how many pips it moved,

but it's a big move away from that consolidation in relative terms.

So the shaded area that consolidation price moves aggressively away from that.

When we see this, this is indicating that they're smart money in the

marketplace, and they believe that prices wanting to go lower now

because there's smart money there.

Their orders are going to be larger than ours.

And that means their participation is going to have to be scaled in

that can't facilitate their entire net short position all at one price.

So they had to gradually work that position.

Yeah.

It may require them to take a little bit lower entry.

Sometimes they may be to push it higher and run back above that consolidation.

And you take it in the form of running out by stops and they

can sell to those by stops.

But that's not the point of this teaching.

We're going to specifically deal with the liquidity.

When we have that liquidity void and it's broken down like this,

what is it basically saying?

There's a void of buy-side liquidity.

That means the market's aggressively moved away from that

consolidation that shaded in.

And because it repriced aggressively lower, it was all on self side.

Liquidity only very little buying took place in that rundown.

So.

The nature of a liquidity void is that we'll probably see with a great deal.

Probability of move back up into that 1 0 4 76.

Which would cap or fill in the entire liquidity void that we see in the form

of those two big candles that dropped down away from that consolidation.

But remember, it's a void of buy-side liquidity that causes

downward ranges like this, which is what we call a liquidity void.

In other words, we expect price to come back up and trade right back over there.

Same price levels that we see here between 1 0 4 76 and 1 0 4 50 there.

Okay, let's take a closer look here with a five minute chart, that same

consolidation you see this time.

It's only showing as one big five minute candle that drops down aggressively.

That same area is denoting, a liquidity void.

And again, it's the absence of.

Or buy-side liquidity and they're running lower, aggressively repricing.

So prices jumping down into that 1 0 4 42, 1 0 4 30 range before

they start seeing buyers again,

but pay attention to these loads down here.

We're gonna take a look at something while price is showing a short-term

support level like this, what's going to be building up below those.

Sell stops.

So if we anticipate price potentially going up and closing in that range,

that we've identified here as a liquidity void, what we're seeing there

is a big single five minute candle that's bearish sometime in the future.

We expect to see that entire range of that down candle, that big, long,

thin candle that we've identified here is a liquidity void that will be

covered back over at some future time.

In other words with that range with bullish price action, no more to there's

going to be a bullish candle or bullish price swing that covers that entire range.

That's identified here with the liquidity void when it does that price action

has been balanced out and I've worked.

It's been a complete and uniform delivery of price action.

It's been offered on the down move and it's been offered on the move.

You see here, the cell stops below those loads get ran and price runs up.

And at this point here, you would reasonably expect to see that

liquidity boy completely closed in.

Sometimes it does.

And then sometimes it doesn't sometimes it'll come right back down, run an area

of liquidity, again, that same equal lows, and then it runs up and hits it.

And that last portion noted here.

You can see where that fills in the liquidity.

Closing right up on that 1 0 4 76 level, looking at this price action here, you can

see there's several trades that you've, could've taken even on both sides of the

marketplace, but the ultimate draw on price was to get up to that 100, 4 76

level closing and that liquidity void

note again, the stops that were ran below that low here.

Great.

Before the void was closed.

That low with these buying opportunity.

And also you can see right before that load is being shown here with the arrow.

There was a short term low that price dropped down below to hit that same one

oh four ten two one oh four oh five level.

Uh, the, uh, the biceps that would be below 1 0 4 10 on that

initial short term, low weight above that bold arrow, um, denuded.

For the last low before drives up to ended at 1 0 4 76 level that run on

those cell stops, what was necessary for them to facilitate new longs.

So that way, if they're going to take out the one to 4 76, they're going

to make it worth their while they're gonna pick up some buy orders around

1 0 4 0 5, 1 to four big figure to identify what data feed you're looking

at, but on this here for the Forex LTD platform for demonstrating, uh, the

feed shows a 1 0 4 0 5, thereabouts.

And then price growing next, a runoff 75 pips up to a one to 4 76

and closes in that liquidity void.

Seeing again, just on a 15 minute timeframe you see now that big one,

single 15 minute candle drops lower, but away from that consolidation,

again, denoting that liquidity void.

And you can see now a little bit.

Friendly on the eye where the runs on those 1 0 4, 10 and 1 0 4 0 8.

Cell stops would have been on the 15th and on the 16th of December.

But notice also here we have something that's a little bit, um, interesting.

I want to show you there's two times that trades up into that 1 0 4 76

level, but this time it trades a little bit higher than the first time.

The first time I hit it, it was around, uh, 1500 December 16th.

The second time I hit it was on the 19th of December.

When we see this second time run up into that, it just pokes his head

above the previous time it went above 1 0 4 76, but look at the two candles

immediately after the run into 104 17.

There's two down candles.

One has a little bit longer WIC, and then the next candle, it gaps down at

the opening and creates a bearish candle.

I want you to look at something specifically in here.

You see that little space right there for the bodies.

Don't close in.

What is this?

This is a gap.

Okay.

It's a price gap.

So if price gaps in here, how can we use this information?

We see that the liquidity void has been closed in.

They made a run one more time in the 1 0 4 76 blowing out the level two times.

Closing the void.

And if we know that they gapped down or made that liquidity void

away from that consolidation around that 1 0 4 80 institutional level,

that's what it's moving away from.

It trades back up into 1 0 4 75 or thereabouts two times the trades there.

We know that it's more likely to trade lower because it's moved aggressively

away from that 1 4 80 level.

And it's tried a couple of different times to get up.

And remember pricing in on an institutional level has

to happen in graduated terms.

In other words, it can't, it can't be done on the first pass.

It goes to a level, it runs away from our level.

Let's say it like that first day runs away from 11.

In this case, it moves lower from 100, 4 80 and then it works its way up.

Gradually up into that 100, 4 75.

Once and then sells off.

Why did sell off here initially on the 16th of December, because they priced in

some more selling, so they build more of a natural position there, then price trades.

One more time up in that 1 0 4 75 level 1, 4 76.

On the 19th of December.

And then we see price immediately, two bears candles, but one

gaps down a little bit.

What is it showing you there again, an aggressive move that it

wants to go lower, but now it's giving you a golden opportunity.

This is where we're going to talk about gaps.

A little bit more liquidity voids are.

Yeah.

During price trading, where it extends across the, uh, this distinct range.

When we see a gap where price has closed from one came on and gaps

into another opening of another candle, and that separation between

the two price don't have a closure.

In other words, it doesn't have a range closing that in it creates a common.

What can we do with this common gap?

Well, we have a inclination that we're going to be moving lower.

So if we're going to be moving lower and we see a gap here, we

can put an order in here, the cell with a limit order at 1 0 4 70.

So in that price gap, we can be a seller at that specific price level at 1 0 4 70.

Look at the reaction there.

Once it closes in neck.

The only the body closes it in, it wakes up into the body, but the bodies

of the up candle as it closes that gap, that's all that's necessary.

Very, very little draw down and immediately it trades lower and reprices,

it makes it run down below the equal lows that's been formed on the 15th of

December and the 16th of the second.

Scene a little bit more information here in this 15 minute timeframe you can see

once that 1 0 4 76 level had been hit.

The gap had been closed at a entry at 1 0 4 70 with the ideal use of a common

gap price makes it run for 1 0 4 0 4 cell stops where we can take a cover

on positions that are short there.

Cell stops are used to pair up short covering.

And price makes one more like lower making a run out on one of the 365.

So again, one more time, pairing up, sell stop orders with BICE to cover on shorts.

Everything that I'm showing you here is this the reverse

with when the market is both.

And I'm going to give you examples in your PDF file.

So don't be, uh, feeling a little bit lost here because there's a lot of

examples that I can give you on, uh, gaps in liquidity voids and order blocks.

And you have a lot more information coming to you in supplementary

teachings the last week of December, because there's no trading on the

week of Christmas while we're doing this mentorship, but I will be.

Daily teachings and it'll fill up your PDF file.

So your PFL is going to be rich with a lot of content that can't

be shown here for the sake of time.