All language subtitles for Lesson 1.5 Defining Institutional SwingPoints

Welcome back folks.

This is lesson 1.5, defining
institutional swing points.

Okay.

We're going to be talking about
institutional swing points.

Now you've heard me teach
in many instances where.

Swing high swing, low forms in the
price action, swing high, being a high

with a lower high to the left of it
and lower high to the right of it.

Just a three consecutive three
candle or three bar pattern.

Um, one with a high, with two
lower highs to the either side.

And then obviously the same thing
would be said just in opposite terms

where swing low one candle with a
higher candle to the left of it and

a higher candle to the right of it.

Um, that's a swing low.

Um, that's what I learned from my mentor.

Larry Williams, pretty simple, easy.

Uh, there's been a lot of patterns.

I've come across through
my development as a trader.

Um, some of them rather elaborate
that really didn't mean too much in

terms of future prognostication, but
nonetheless, they were fun to read

about initially got my hopes up, but
it didn't really deliver anything.

Uh, I'm not talking about a
swing points in that degree here.

Uh, I want you to think about
institutional swing points in terms of.

Concept.

And now it's, what's going
on behind the scenes.

I don't want to draw any charts up.

I don't want to pointing examples up.

I want you to think about it
conceptually, because we're going

to be building on these ideas.

I want you to understand that
there's really only two forms of

swing points in the marketplace.

As it relates to institutional
trading, it's in the form of a

stock run or a failure swing.

That's it.

There's nothing else.

So we're going to talk about the two.

Forms of swing points.

And we're gonna talk about the
contrasting differences between the

two and what makes them opportunities
for us as traders and how we can

see the characteristics of both.

The first one we were looking at
here is essentially the breaker.

Okay.

This is a breaker where the market
will generally make a higher.

Fail then break down and heavy rejection
at the highs many times, this is a very

surprising and deflating pattern for some
traders and everyone's experienced at

some time in their development where they.

A specific price point with
the expectation it's going

to go higher initially does.

And then once it makes that new, higher,
high, it breaks lower aggressively,

and you probably experienced it as
well, where you market, you sell a

low and it starts to break lower.

You feel good about the trade?

Now?

All of a sudden, just by moving
below a previous low, a little

bit explodes on the upside and
now you're trapped or stop down.

This pattern, in my opinion is the
most powerful, the most dynamic,

the most significant price pattern
that you need to learn conceptually.

And you understand some of the
characteristics about where it forms.

But what generally happens is when
you have a selling scenario, the

market will generally make a rally.

To an area of old resistance and
that resistance can come in the form

of how we interpret resistance as
a bear shorter block, it could be

a breaker or a mitigation block.

Um, it could be an old, low it's
returning to, or it could be in Ohio.

It's returning.

And it may fall short just by a few
pips or points initially, and start

to trade lower and retail traders.

And like myself.

When I first started, I thought that
this was most likely going to be when

the market would break down aggressively
and start trading lower and I could

be, um, expecting lower prices.

Well, the market makes one more
pass, higher, driving out that

short term high it creates and it
spooks the marketplace and it upsets

those traders that are already.

And ultimately it goes to the level
at which you would have expected it

to trade to the first time, which is
that a resistance level or in this

case, it could be a barrier shorter
block for us or could close again.

But when we see price hovering just below
a key institutional reference point, like

we learned in September, which are the
bear's shorter blocks bullets, shorter

blocks, liquidity voids, fair value gaps.

When we see these things in our charts,
we anticipate price trading to them,

to the pith or into them a little bit
like as it were for a order block.

The idea is once you see the level
and these levels are going to be

delineated with the blue lines, uh,
the diagram on the left represents

a selling opportunity or where we
expect some measure of resistance.

That could be a bare shoulder block,
uh, the short term high that forms

prior to that higher high that's
what gets many traders caught.

And if you understand.

Many times the bear shorter
block is just above that.

It didn't, it didn't trade to it,
or it leaves a little bit of a fair

value gap and price comes up and
just fall short of filling it in and

then finally drives up and closes at
that little bit of a range in that's.

When you get this breaker swing point.

Now, why is it a breaker?

The fact that it creates that
little short term low in between

the higher high and the previous.

For the sell side diagram on the left
when the market breaks down and takes

out that short-term low prior to the new
high that is indicating that the market

has broke those individuals that were
initially short and now they're trapped.

So when that movie takes place, what
you're seeing is the opportunity

for the marketplace to move
aggressively away from the level.

It was an initial fake-out.

And then the buy stops sometimes
also are what's targeted.

So it could be an order block.

It could be a fair value gap.

It could be a liquidity void
getting closed and it didn't

get closed the initial time.

And then surged up the second leg up
many instances by looking at your charts,

you'll have a plethora of examples
and gaining experience by looking at

hindsight, examples of how that occurred.

The one of the benefits of
looking at intraday charts.

Not that we're going to be talking about
intraday in this month, but when we

practice with intraday charts, it gives
us a lot of examples of where these types

of events take place, because this very
pattern here, this materializes, every

single day, it materializes every single
day and in every single pair it's there.

You have to study every single timeframe
and see how this pattern manifest itself.

On the bias of being bullish.

The market diagram here that we have
on the right hand side, where the cell

stops are ran out below a short term low.

Once it hits the level or at short
fall short of a support level,

the market main times will drive
lower and go right into that level.

T.

I mean, I love this pattern because
number one, I can see when it's forming.

Okay.

I can see when it's just fallen short of a
level and where we're going to anticipate

one more drive lower, or in his case, it
could be a dry higher on the bullish side.

But when we look at price, it's
important to have the key levels

or the institutional reference
points that we taught in September.

Those ideas have to
already be on your chart.

If you don't see them.

Already outlined.

You're not going to be able to
capitalize on the opportunities that

these patterns present themselves with.

So if we see cell stops being ran out,
or if we see a fair value gap below the

marketplace or a liquidity void that
didn't initially fill in the first pass

lower and then dries lower and then
closes it in all of those scenarios can

lend well to this pattern by itself.

Conceptually it doesn't do any good.

Just hearing me talk about it.

So you have to go into the charts
and literally pull out examples

of where I short-term high was
passed through just a little short

period of time, right after that.

And then it creates that re rejection
or reversal high, same thing as said

for the buy-side of the, uh, the
breaker pattern, these swing points.

If you look at them, they many times.

Outstanding entry points.

What makes them scary is the fact
that the number one question I get

about them is how do you know if
you're going to see it reversed?

If you sell above the previous high.

And that comes by experience with trusting
the institutional reference points that we

taught in September, and then throughout
the, all the free tutorials order blocks,

breakers, mitigation blocks, liquidity
voids, and now you've learned fair value.

So having these ideas in
your chart, you'll be able

to anticipate these patterns
unfolding before they actually do.

If you don't have the levels on your
chart, you're going to be surprised

by these things, but that's okay.

I already know that most of you,
aren't going to be able to see this

pattern readily before they happens.

So what can you do with it once
you see the pattern breakdown?

In the example, on the left hand side for.

Bearish Swain point in the form of a
bear's breaker when that high is broken.

And it takes out that short-term
loan between that market

structure shift, breaking point.

That becomes your trigger.

If price ever comes back up to
that level, you can be a seller.

Now the beautiful thing is we
already have a stop run on this.

Now think institutionally there
was a short term high right here.

Margaret comes down, creates a short-term
low and it rallies up to taking out

this short term, high blowing out the
buy stops, closing and a liquidity void

that didn't get filled in completely.

When this first pass came up or it came
into a bear shorter block, maybe it

fell short of their shoulder block here.

Or maybe this is just a simply an old.

Hi and price comes right back
above the old high and then

rejects and trades lower.

You don't have to fear this pattern here.

If you can't, if you don't have the
confidence to get in here and sell

that idea, like an institutional
trader would go right in there and

sell it rate as it trades through it.

Wait for it to break down.

It takes out that short term low
when market trades back up to

that trigger point right here.

That's when you would be looking for.

The wonderful thing again, is about this
pattern is we already have the stop run.

So if, if it's already stopped out,
there's individuals here, there's no

reason for it to want to come back
up and trade back in there because

these traders are already knocked out.

So we can be a seller here with a
great deal of confidence that our

stop-loss could actually be above this.

Or right at that height, the likelihood
of that coming back up there after

an aggressive breakdown, once a
level has already been arrived at

discerning that there is been an
expectation of the market being bearish.

If we see evidences that we've already
seen a stop run here, if we seen a move

start to break lower at, or just below
that, that resistance level, this is

going to launch traders into believing and
like, you know what it feels like as well.

You want to see price action moving in
your favor, maintenance times, the new.

So this dropping off,
we'll get traders short.

Where's their bicep.

Let me place right above this high.

So this pass through clears out
that buy-side liquidity, that

they can engineer new shorts on.

So when we see it returned back up to this
level here, it gives a great deal of calm.

Even on a daily timeframe that we're
most likely not going to see price trade

back up to this level here, because it's
already done its job of knocking out

those players that are already short.

They don't want to give them an
opportunity to get a good price in a

short they've already done that themselves
by knocking out the initial bears,

this breaking point here, we want to
be selling at that point right there.

So when we look at price, we're
looking for this pattern for ourselves.

This is the highest, most probable
condition to be a short seller in the

marketplace, because it has a built in
advantage, even though it's the most

fearful thing for you right now, you
don't want to sell above an old high

because you haven't practiced enough.

You haven't seen the effects of looking
at institutional order flow on a higher

timeframe or any other timeframe for
that matter, that frames, the support

ideas around these particular raids on.

The same thing has said just an
opposite terms for when you're

looking to be a buyer, you want
to see a short term, low form at,

or just above a key support level.

It could be a bull shorter block.

It could be a liquidity void
that hadn't filled in on this

past here that does here.

It could be an old load.

It just simply runs down below.

If it's an old low, there is no limit
to time between this low and a new load.

It's for.

Okay.

In that re in that regard,
there's no, there's no time limit.

Like, you can look at an old low here and
it could be six months and then finally

it trades down below that low and then it
runs, that's still the same pattern here.

Okay.

Um, ideally you want to see something
that has this recently created a low,

came back a little bit, a few days,
maybe a week, and then it drives one

more time through it and hits your.

Institutional reference point.

It could be again, trading down
to an old high, or it could be

a lower low, and it trades down.

But the main thing is if you want to
see a low, that makes no real sense,

stopping there and giving a little
tiny little bounce and then expect

that drive lower closing in on that
real level you're having on your

chart, which constitutes support.

Just like we mentioned that
we're here, the opposites said.

Any buyers over here on this little
pop is going to have their protective

cell stock just below that low.

We want to think institutionally
about accumulating those cell stops.

So if they're going to sell it to
us, we're going to be a buyer and

we're gonna be buying it at a deep
discount with the expectation.

Now here's the thing you want to see an
immediate response away from that level.

You don't want to see a trade down below
this low and hang around for a while.

Okay.

You don't want to see that.

The problem you're going to encounter
is because we're trading on a daily

timeframe as position traders.

We're going to have to wait a long time.

Sometimes for that confirmation,
it may, it may require the whole

entire daily range before the
daily candle creates the WIC.

So this many times will become the wick.

The market will trade down, make that low
here and then wick away from that low.

And then you'll see what many
people get excited about as a

hammer or some kind of a doji.

Okay.

And I'm not teaching classical if
you want to call it that candlestick

patterns, but the idea is.

Candlestick traders trade.

The candle sticks that have
formed institutional traders.

We trade it when it's a bold faced candle
before it becomes that that wick or that

hammer or a doji, it takes a great deal
of confidence that he buying down here

below an old, low, whereas retail traders.

They all have reasons to justify
why something should be done

after some form of confirmation.

If you're demanding confirmation,
you're not going to get this entry now.

But you can get a favorable entry point

by waiting for a market
structure shift here.

So when the market structure shifts
on the bullish side here, all eyes

go back to this reference point here.

We're not worried about coming back down
here again, we don't care about that.

We're worried just simply for
a return to this level here.

So again, the same mindset we said about
the sell side or bear Spreaker on swings.

This, we know this has already
been a raid on cell stops.

There's no expectation or reason
to believe that the market needs to

come back down into this level again,
because it's already done its work.

It's cleared out.

The cell stops in the markets
quickly rejected the market.

If it does give you an opportunity to come
back down into this breaking point, we

can be a buyer here with the exception.

That there may be a bullish
order block over here.

It doesn't have to come back down to
this level, just like it doesn't have to

come all the way back up to this level.

It could just come right back up to
an area over here where there'll be

another or a block to trade-off up,
depending on how aggressive the selling

was away from this high or where the
buying was in terms of magnitude.

You may never get that return
back down to this price point.

You may just keep on screaming.

And at some time it's going to happen and
it's going to be a missed opportunity, but

I want you to think about the marketplace
and two conceptual ways as it relates

to swing point, you have a breaker.

Which is what we're describing here.

And I'm giving you the
classification of it.

And I'm teaching this one first, because
this is the one I trade predominantly

because it's based around the pattern
I like to trade, which is a turtle

suit, a false break above it, old high
rejection, and quickly it moves away.

And if I don't get the entry off,
like I want to, I always give it

an opportunity to get back in here.

So it's like a two chance.

And many times you don't get second
chances and trading, you know, you

either miss it and you never get it
again, or you take it and you lose money.

And here, this pattern is in my opinion,
the best pattern in, in market structure.

When you're looking for, uh, uh,
institutional evidences to what

should be taking place in price.

When you see this pattern on
fold and you learn to anticipate.

You're going to have the highest probable
entries for all your setups, because

you're actually entering at the lowest
possible point for buys and you're selling

at the highest possible point for sells.

And yes, it takes a great deal
of conviction to do that, but

it also doesn't demand it.

You can wait for this pattern to
give it to you by waiting for the

breakup of the market structure
here, which is ironic because.

You don't get that same, forgiving
this with the next pattern we're gonna

talk about, which is the failure swing.

Alright.

This is the failure swings.

Form of institutional swing points.

And again, I understand that, you
know, you probably understand this a

little bit, but I'm giving you some
additional points because if we're

going to start breaking the market down
into modular form, where we can go in

and start utilizing these things, not
just speak about them in broad terms.

I want you to narrow your focus
to only two ways of dealing

the marketplace when it.

We already mentioned
the breaker swing point.

And now we're talking
about the failure swing.

The failure swing is when you identify
when there is a resistance level

and it trades through it breaks down
and it comes back and retest it,

it can't make another pass through.

Now, this level could be up here.

It could have been just touching it here
and then failed to make another pass.

It's the same thing and same conditions,
but we're focusing primarily on is the

ability for the market to get back to
this high and make a higher high, or

the fact that it makes a failure swing.

We don't ever know with
great deal of conviction.

If we're going to get the breaker set up.

So while this may be unfolding,
we could be anticipating this high

being taken out to be a seller.

But many times what'll happen is,
is the market will come up and

fall short and then break lower.

And that's a missed opportunity.

We can't be a seller at a high price.

We may have may have even second
guessed this entry as a short, but we

are demanding a breaker to occur, which
would be selling about this old high,

but it doesn't give it to you here.

That would be a missed
opportunity, but it doesn't mean

there's no trading opportunity.

The same thing can be said for the buyer.

We have a support level down here,
the market trades down into it,

make trade through it, or the blue
line representing our support level

could be down here right at the low.

It's not important as it relates
to where the actual level is.

What we're anticipating is is the
market's going to probably make

another pass through and retest this.

Again, we're aiming for and trying
to get breakers, swing points.

If we don't get the breaker swing
point, that's not a problem.

We have an opportunity to trade
off of this pattern as well.

If we get the buy, set it up like this,
and it retraces off of the level that we

are anticipating seeing support at, and
it comes back and starts to come back

down and fails and makes one more pass up.

If it takes out this short term.

Or on the sell side takes
out this short-term low.

We have another opportunity

because what we have here is the market's
already shown and willingness to do what

it's running an area of liquidity out.

It's track traders above
here and traders below here.

So sellers are stuck down
here and buyers are stuck up.

They're not giving them an opportunity
to get out there quickly repricing here.

So now when we understand that think like
an institutional trader, if you know,

you have a guy on the hook or a fond on a
hook up here and he's, he's long now, if

you can reprice the market and go lower
with it, leave them holding the bag up.

And were vice versa.

They sold on some weakness down
here, because again, think like those

turtle traders long-term position
traders, they're selling on a breakout

they're selling below 20 period Lowe's
and buying above 20 period highs.

So if we can see this phenomenon taking
place where they move away from a low,

aggressively Cain down, but failed to make
a low and then broke through a short-term

high in an area where we anticipate
bullishness on an institutional.

We have to sit back and simply
just wait, because we'll understand

that this movement could have
been moved down to an order block.

That's bullish.

This could be a bare shoulder block.

This could be a move that goes into a
old high, the run out by stops here.

It could be an older hide is
not being shown in this diagram.

Just like this could be an older law.

You know, to the left of the truck,
wouldn't be shown in this diagram, but

we're seeing the evidence is that they've
already did the manipulation down here.

We don't know that for certain, until
we see the retracement back up here.

So all this retracement
here, this is a gray area.

We don't know for certain, if this is
going to stop here or if it's going to

continue up and give us a break or swing.

Just like, we don't know that
there's going to be a continuation

to go lower, to have a S uh, a
breaker swing point for buys here.

We don't know if it's going
to go down below that low.

I never know that for certain.

I never knew that I anticipated the
most optimal entry I'm looking for that

scenario, but it may not give it to me.

So if it doesn't and it starts to
run the other way, I'm just simply

going to put my eyesight right here
for the buy and here for the cell.

If I can't get a retracement back here
on an idea for a short, if I don't

see anything to justify a short here.

And sometimes that occurs, sometimes I
just, you know, I don't get it right.

And I'm human just like anybody else will.

If I can't get a short off there
and I don't have strong convictions

to sell, there is no problem.

I'm going to just simply wait for that
swing point right here to be violated.

And then I'm going to be aiming
for this level right there.

That's where I'll sell.

If I'm going to sell at this level
here, I can have great confidence that

myself can be protected with a buy
stock where you're above this short-term

high because it's inside this area
at which they had already ran the

stops out when the form of buy stops.

So if my buys stop is here now, they're
not going to come back up there and

give these opportunity to get off.

They're not going to let them out.

So I can be a seller here with my
stop here and look for lower prices.

Same way can the same thing can be said.

If I don't know with great deal
of conviction, that this is a good

buy or I miss it and it takes off.

It's no problem.

I'm waiting for this little
swing point here to be broken.

Once that high is broken, I
can wait for price to come back

down to this level right here.

When this level is retreated to down
here, I can be a buyer with a great

deal of confidence that my stop-loss
can be placed just below this low,

because it's going to be in an area
where they had already ran the self.

Now, this is probably very 1 0 1 ICT.

Okay.

But I want you to come away with
this idea that the institutions

go into the marketplace to
trap, or they go into knock off.

That's what they do.

They are in the business of knocking
the funds out when they're going to be.

And they'd like to put them in on
the wrong side when they have pending

orders that allow them to be offside.

For instance, in this case
here, funds could have buy

stops here with expectation.

If it goes out there thinking this could
be a long-term trend following by program,

where they can hold onto it for many
months, the institutions will drive the

price up there, take those biostats in.

But when those biostats become
market, where's the buy there.

With the expectation they're going to
reprice aggressively and then go short.

I may read it wrong.

Just like you're going to read it wrong.

I may be looking for a breaker
scenario up here where it makes

a pass above this old high.

I may be looking to sell this
old high on turtle suit and

it may never give it to me.

And I may not be astute enough
watching price to see this as the

scenario to really be selling it.

So if I miss it.

Just like, you're going to miss it too.

And you see this breakdown in here.

No problem waiting for it to
trade back up to this level here.

And that's where your shorts going to be.

And your par your position is
going to be protected with a

stop loss rate above this high.

It's going to be in an area
where it's already been traded

to with manipulation by staff.

They've already been violated here.

They're not going to come back
up to take those out if it

does, you're probably wrong.

Anyway, you want to be out.

Same thing is said over
here, just in the opposite.

When the market comes down here and
rejects me, you may not see that initially

as a rejection, you may anticipate one
more pass, lower to get the ideal, buy it.

It doesn't do it.

And if you can't get this off as a long,
and it starts to take off, no problem.

You go right back to this price point
here and wait for it to come back down.

You can be a trader.

It takes a long fishing there
with your stop-loss right here.

Again, with the expectation that
if your stop-loss is already

below this low you're in an area
where they already ran out cells.

So there's no reason for them to want to
come back down here again, especially if

they have a very dynamic price response
here, the magnitude of which they move

away here and the magnitude at which
they move away here indicates that

they have already trapped a sizeable
number of orders, net long here and

sizeable orders that are net short here.

They're not going to want to let them off.

And if they are.

How can they get out of
their short position?

If they aggressively reprice higher,
they're going to collapse their

trade by doing what, buying it back.

They're going to reprice quickly.

So that way they forced them to buy
back at a higher price where they

can now start scaling off their
position that they bought down

here and down here at a net profit.

And the opposites being said here
where they could quickly reprice here.

Smart money sells here and sells here.

So if price aggressively moves lower,
those that are long in this point

here, they're going to want to collapse
their trade and they have to sell it.

So they're not going to sell it down here
where the smart money can buy it back

after being short from this point here.

So when we look at price, I want you
to think again, in two institutional

swing point theories, you have a break.

Which is the ideal, most optimal
trade entry pattern there is in the

marketplace because it's absolutely
the deepest discount by, and the

absolute most premium to sell.

It's scary to do it.

It's absolutely uncomfortable
when you first start doing it.

And I know what that feels like.

It's scary, but that's the whole
purpose of getting into a demo account.

When you learn to do those
types of things, you can not

learn it doing this live.

That's all part of this mentorship.

You have to be practicing in a demo
where you can literally go into your

step in front of the marketplace.

Once it rolls into a new high,
sell it, get that responsiveness

of seeing what happens in price.

Sometimes it'll keep on going.

Okay, no problem.

You're going to be wrong, but you're
going to know right away that you're

wrong and you don't have a hundred PIP.

Stop on.

You can have a relatively modest stop.

1.8.

When you're right, you get immediate
feedback and it's very encouraging.

It's confidence building.

And usually if you enter on the
right side and you're selling an old

high, it's amazing because you'll
see how fast the market tanks.

If you buy an old low, and you're doing
it on a breaker set up, and it's a

swing point in the form of a breaker,
you're going to be able to see dynamic

rallies just like that, takeoff.

And then there'll be.

So don't think in terms of classical
chart patterns like head and shoulders,

or think in terms of, um, bear fights
and bull fights, things like that.

Only try to convince yourself
that there's only two real ways.

The market's going to turn around.

It's going to be on a breaker
where they run stops, or it's

going to be a failure swing.

Both of them are indicating a manipulator.

But they both have to be
used slightly different.

The first one being the breaker
swing point, that is the ideal one.

You want to be looking for that scenario
all the time on any timeframe, not just

the daily chart, but any timeframe,
but if you can't get the breaker, don't

fear or be upset about missing that
mood, because it still gives you the

opportunity to get in there because
they're only going to turn them on.

One of these ways, that's it.

And nothing else happens in price.

I challenge you to go in and, and show me
something where it doesn't do this because

I can tell you it's either a breaker or
it's a fairy swing every single time.

It's never anything else.

So you're, you're limited.

It's really just two
conditions in the marketplace.

If you're going to be a seller,
how are you going to be a seller?

You're going to be selling it at
OHI, or you're gonna be selling

it on a retracement back to
a break in market structure.

That's it.

If you're going to be a buyer
are going to be buying an old.

Or are going to be buying on a return
or retracement back to a market

structure, a break to be a buyer at
support there it's just that simple.

Nothing else can happen.

There's no, there's not 50,000
patterns and be looking for,

there's not all these different
candlestick patterns to memorize.

Okay.

New dark clouds covering this and
no inverted hammer that it's just

simply understanding where are the.

Relative to old institutional order
flow, reference points, key support

resistance on high timeframes.

How is the market behaving at that level?

Was it able to pass through it and did
it reject if it went up to it fell short,

it's probably gonna make more, more pass
higher and it might give you that break.

Right?

If it doesn't give me a break or,
and it gives you a fair swing.

This is how you trade them, but there's
nothing you need to worry about in a demo

account while you're teaching yourself.

If you're, if you're worrying about
rushing to get in with live money,

it inordinately characteristics
between these two swing points.

You're going to hurt yourself.

You're going to be frustrated.

You're not going to be able to focus
and you're going to end up chasing

price or blowing your account.

And then you're gonna be frustrated
or taking, taking completely out

of the marketplace where you can't
fulfill your dreams as a trader.

So hopefully this has been
insightful to you guys.

I'm going to wish you good
luck and good trading.

I'll talk to you again in the next lesson.