Original subtitles

Welcome to lesson five folks.

Short-term trading.

Just, teaching's going to be specifically talking about low resistance.

Liquidity runs in consolidations.

Okay.

We have to preface it by a reminder of every setup that we look to execute

on and stock and the track, if you will, is based on time and price.

And the time element is going to be related to the up-to-date ranges.

Last 60 days, 40 and 20.

And we're going to be focusing on premium and discount PD erase.

So for short term trading, we work cell in the range of the last three months.

So the up-to-date range of 60 days is our look back period.

And it's going to comprise every element that we need to frame a

short-term trait or one shot, one kill.

As a reminder when we deal with time and price, price moves from a premium

to a discount array or from a discount array to a premium array in between

these two realms of premium and discount price, war key off of a time

element related to the data range.

So we're blending both time and price and element of the last 20, 40, and 60 days.

Two eight institutional reference point in the round of the Ray matrix.

Okay.

For our study and case study examples, we're going to be looking

at the cable or British pound USD.

And this is a daily.

And what we do is we define a market, whether it's it's

trending or it's in consolidation.

And obviously anyone with the average intelligence in terms of market analysis,

they can tell looking at the British pound, we have been in a consolidation.

Market's not been in a trending markets, been in consolidation.

So whenever we see a market it's range-bound or it's cannot move

outside of the current trading range that you were looking at.

At any given time on a daily chart, you're looking at a frame of about three months

again, and you'll look back three months or 60 trading days, which is the relative.

If the data range that we use for maximum definition of look back.

So when we have this framework in terms of blast 60 days, what we

do is we have to define the range in terms of a high and a low.

Now, what we do is we define the.

In the form of its highest and lowest candlestick body.

We're not concerned about the wicks so much, but we're primarily looking

at the bodies of the candles.

So I have here the lowest and the highest in terms of the candlesticks bodies.

And you can see those reference points here with the errors, and that's

going to be our range that we're going to be framing all of our analysis

concepts as it relates to one shot.

One.

Okay.

So what we'll have to do is that we have to look at the market in this range and we

can use a tool that's on every platform.

It's the Fibonacci.

So we're gonna use our fit, told to determine the 50% of the range.

And we're going to note that range midpoint.

So I'm dragging the fib from the highest body cam.

To the lowest body candle.

In other words, I'm not using the lowest WIC low in the highest

WIC high I'm looking for the highest body on the candles.

Either it's an open or close.

I don't care which one it is, but whatever, highest form of high open

or close, that's the one I'm looking for in the last 60 trading days.

And I'm looking for the lowest open or close.

And in the last 60 trading days, that gives me my defined

range in terms of consolidation.

Then I'm new to the 50% level.

And I draw a horizontal line on my daily chart.

Next, we have to determine the 50% levels of the upper and lower ranges,

anything above the 50% level, that's going to be our area, which we look

for sell scenarios either by taking profit on lungs or short position.

And anything in the lower portion we're looking for longs

or covering short positions.

Now the upper portion of the range from the highest body close or open

to the mid point that we've defined by the total consolidation range.

We measure that with the fit as well.

And I gave you two examples of where you could draw the anchor

points with your fit, but the.

And you note the 50% level on your fib and you drop a horizontal line near

by noting this we've now noted the upper range for the total consolidation range.

Next, we do the same thing by noting the 50% level or the lower range between the

mid point of the total consolidation.

To the lowest body close or open noting it's 50% level as well on the fifth.

And I drop a horizontal line on that.

Now what we have here is by defining our consolidation range in this

manner, it gives us a form of premium and discount identification.

Anything above the mid point or main 50% level or in his case, the gray

that would be deemed as a premium range and anything below it would

be deemed as a discount range.

Next, we identify the PD arrays in each new range.

Now I'm going to save us a lot of time and just apply everything

from a monthly, a weekly and daily.

Okay, so now you can see it, all of the, if the data ranges and from

a form of a premium and discount have been applied to the chart.

Now, I want you to look at this from him before we go to the next slide.

So pause the video here and really study what's been identified.

So every premium and discount array provide.

And the overall PD array matrix.

So what we're looking for is a element of time and price to

blend a setup for a buy or sell.

We understand that the highest probability trades for shorts is

by looking for any PD array in the premium range of this consolidation.

So anything above the mid point of the 50%.

I don't want a grade level here.

That's going to be ideal self scenarios.

If it is coupled with a PD array for a premium market, we are

blending both time and price.

We would look for that move to be correlated to a later.

Discount PDA Ray, when price moves that down to either the 50% level of the total

consolidation or any level below the midpoint or 50% level, the consolidation,

an example would be the fair value gap and bearish or block in the premium level

around the February time period of 2007.

And pairing that with a weekly bullish order block lien threshold

in a discount in March of 2017.

Now, when we look at their quadrants like this, where it's been broken up

into a premium and discount, we can also further define those quadrants.

Into their own respective or unique, premium and discount trading range.

And what do I mean by that?

Well, let's take a good closer look.

As you can see here, the lower quadrant can be divided into equal halves as well.

And that in itself can be viewed from a premium and discount for me.

When we see these elements here, anything that forms as a discount PD

rate and a discount range from this view or perspective, this is going to

be high probability, short covering objectives, or it's going to be high

probability, new long positions, and any first profit would be best taken along.

Once it enters the pre.

Range of this, uh, PD Ray matrix.

Again, moving up the same thing can, can be applied to the new

quadrants that's shown here.

Ideal longs are entered at the discount level or a net discount

range and taking first person.

Would have to be best applied by taking your first long exit in the

premium range of this PD array matrix.

Now, what you're looking at is a daily chart.

So in the form of a four hour or one hour, you'll see that there's going to

be premium PD res in those lower four hour and one hour timeframes that you

could pair up first objectives for.

I'm giving you the elements to look at through the scope of a daily chart.

And, um, finally we can apply it to this area as well.

Each path is further divided into new halves, but we're looking at

it in the form of an algorithmic way of defining premium India.

So when markets are creating discounts like this, again, this

discount range is shown here.

They're high probability longs, and again, a four hour or one hour premium

PD at REA as defined here, you can't see them daily, but you would drop

down into a lower timeframe, four hour, one hour to take first profit

on your lungs that you used to get entries on by buying in the discount.

Yeah.

Now we're above the mid point of the total consolidation range.

So now, even though we're above it and technically any overall premium

market, we can still take longs, but it has to be defined in the scope.

As we're showing here, we have the overall consolidation.

We divided it.

Half then we divide those halves into halves as well.

So we have quadrants.

Then those quadrants are divided in half as well as we're showing here,

incremental increases moving further up the overall consolidation range

by buying in the discount range.

And again, taking first profit in a lower four-hour one.

Yeah.

Premium range coupled with a PD array that's premium based.

In other words, if we were buying, for instance, the bullish order block

means threshold here in a discount.

Now, overall we're in a premium market, but this is still a possible long

entry because we're in a lower portion of that total larger premium range.

So we still have room to reach for high.

Premium PD arrays.

And obviously we have rains that reach for much higher objectives.

So looking at it like this, framing it, what would otherwise

be deemed as overbought?

We don't view it like that.

This is why indicators do not work from a algorithmic perspective.

Looking at price ranges like this.

It gives us a greater definition on how we can frame entries and classify them as.

Oversold or undervalued entries for longs or overvalued or

overbought entries for shorts.

In this case, we could take a example of the daily bullish

or block means threshold.

We could be buying there and in once price trades up into the premium range,

we could look for a four hour or one hour premium PDA rate, the couple and exit.

And moving further up the consolidation range.

We have a new discount and premium PDRs matrix, and we could define this as well.

And then what we're doing is we're coupling the range as defined by

premium and discount with actual or.

In the form of fair value gaps, bears, order blocks, weekly rejection blocks,

all those things to the left of our chart.

We're looking back that 20, 40, and 60 trading days for the up-to-date range.

So we're blending both time and price in the form of premium and discount.

So we're blending the elements of time and price.

We're looking at the market and the scope of overbought oversold,

but not in the context of.

We're looking at it, algorithmically in the scope of quadrants that are

broken down into premium and discount.

And by itself it doesn't mean anything, but when price trades down to a PD

array, whether it be a discount or a premium, if we trade into that element,

whether it be a bullshitter block, a breaker, any of those things from the

PD array matrix that we've taught you.

If you're looking for a long.

The highest probable entries for longs again, are entering in the

discount range and coupling it with a premium range PD array.

It doesn't matter that we're in a premium range of the role consolidation

because pride can move back and forth and oscillate from the highest portion

and many times make us slightly higher, high and return back inside of the.

And it can go to the lowest low move outside the range a little bit and come

right back in the middle range as well.

So we're anticipating the oscillation effect of price while it's in

consolidation, but in that consolidation, there's smaller consolidations.

So we're able to look at price in the view of overbought, never sold without

the element of indicators or relying on mathematically derived number crunching.

What we're looking for is range defined in the overall context of

the consolidation as we've had here, we're in eight, the upper half of the

portion of the larger consolidation.

And by itself that would many times filter out by signals from anyone else that

would look for over about we were sold.

But for us, we can frame this with the oversold condition,

even in the element of a premium.

It's a discount market in a overall premium market that

still has room to go up.

That's basically, in other words, a layman's way of approaching

a definition, but whatever we do in terms of entry or exit.

We're looking for elements to frame the discount PD at Ray's.

That means bull shorter blocks breakers.

A fair value gets below us in price, uh, trading below an old

low to take ourselves stops.

We're using those ideas to frame long positions and taking first profits

at a four-hour one-hour basis.

Once it enters the premium PDA Ray matrix range.

And finally at the top of the load larger consolidation, we can see that there is

still an opportunity where one could be a buyer, but the opportunities fall off

precipitously in terms of probabilities.

And you can see now that the premium array area in order for PDA Ray matrix.

Bear shorter blocks, old highs, um, bears, breakers, bears, mitigation

blocks, uh, all those ideas.

They're going to be much more influential in terms of price action, and you'll

see much more dynamic price action from that side of the spectrum.

And you can see that in the form of the weekly rejection block prices

traded from in March of 2017, we saw also a move away from the fair value

gap and bear shorter block again.

And.

Largely hinged on the fact that we were in an upper portion of the overall

consolidation and we made it up into that last smallest portion of the

premium market or premium PDA matrix, the shaded area that says premium that's

the highest portion or last little segment of price in this consolidation.

So anytime price reaches up into that, it's going to have a much more.

Impactful response and price when it trades to a various PD.

Or a premium PD rang.

So we see that happening with a weekly rejection block.

It also took out an old high formed in February.

So there was many instances there where you can see why

price had a strong rejection.

Also keying off of that last midpoint that's dividing the premium

and discount levels noted here.

Uh, we had a really significant sell off and it trades all the way back down

into a daily bullish order block means.

Then we had a a hundred PIP move that we called for in our day

to day, uh, meetings in charts.

And you see the response, it trades right back up to what

the daily bearish order block.

And it also overlaps with the premium 50% level.

So there's a lot of things that you need to be able to look at conceptually,

and you have to do it on your own time.

I can give you a plethora of examples over and over and over again, but this is.

Teaching that I've given you enough that if you break your charts

down and do your own study, yes.

This is the part that requires your work just takes study time.

It takes you, uh, wanting to be in the charts, looking for it because I'm not

going to be there when we separate.

You're glad to do these things on your own.

You have to find these, these opportunities on your own, but by

having this element, what we're doing is we're looking for low resistance.

Liquidity runs from one PDA Ray to another.

From a discount to a premium, but we're coupling it with looking back over

the last three months, because one shot, one kill uses in excels inside

the last three months of trading.

So when we look back the last 20, the last 40 and Alexis, 60 trading days, it

gives us framework to say, okay, where is the premium PDA Ray matrix leading

me to, in terms of what I can sell.

And what I can reach for, for longs, the couple my exits with, or

where my discount PDA Ray matrix.

And where are those levels?

I can cover my short set and I'm going to look back over the last 20, 40,

and 60 days to pair those things up.

I'm also now applying ranges in terms of.

PDA rate matrix, whether it be a premium or discount market.

So it allows me to build context of what I'm looking for as an entry and how I can

look for my first objective in targeting

now in an ideal world, the best buys are going to be in the lower

portion or lower half of the overall consolidation and in the lower quadrant.

In other words, the discount matrix.

And the highest probability trades for selling short or taking long

exits are going to be in the premium range, divided by the upper portion.

So in other words, that last quadrant that's going to be your best self.

The highest probability cells are highest probability, uh, exits for lungs.

That's going to be your best scenario.

That's where the algorithm that's going to reach for, for selling or exiting online.

And any long position in here.

Again, you have to take it with a grain of salt.

You have to know the overall ranger in, because just because you see a train

to a down candle, you have to have, I understand that it has a room to go up.

And in this case you can see what the daily bullish or block means.

Threshold.

That 100 pep rally was a response off of yes, a PDA rate discount.

Bull shoulder block, but it trades out to a daily bearish or block, but it

trades up into that bear shorter block.

Once it gets into the premium range, that also gives us a high probability target.

Now, yes, it's one shot, one kill scenario, and we're trying to trade

the weekly range, but one shot, one kill is not defined by getting in on

a Monday and getting out on a Friday.

One shot, one kill is a couple of days of trading and short-term trading.

It can be as little as one day.

And as long as a week.

And finally, when we look at the range in the middle, uh, this

can be the areas of where you're going to get chopped up the most.

Um, because if you're looking at a range incorrectly, uh, if you've

already defined the range and you're looking at PDR, Ray of premium and

discount that have already been traded to Lawrence, if you look at a down

candle in a discount market, normally.

That may be a bullet shorter block, but if it's already been traded to the

likelihood of it being a bullshitter block with high probability falls off,

because it's already been used, we want to use a new PD array in a discount

or premium market that has not been traded to because the algorithm knows

the price has been there once before.

So it's going to seek new liquidity and expand to allow the banks to take

participation in a move higher or.

So looking at the range like this, as we defined it, if you're trading in

the middle of the range like this, and you're not strong in your directional

bias or where the market may reach for next and onwards, understanding

where open float is, where's the buy stops and the sell stops.

If you're not really strong with that, if you're trading in this range here, you're

going to get chopped up a lot over time.

You'll learn how to better approach these specific premium discount ranges.

When you look at the outer rim, when we were just showing the previous

slide, the higher you can get up in the overall consolidation in

a premium market, the better your short positions are going to be.

And the easier it's going to be to reach for a profitable discount

PDR array, the lower you are in the total consolidation, the better your

discount long entries are going to be.

And it's easier for you to get to a profitable premium PDRs.

Blending the two time and price working in a range environment.

Like this gives you context and you can find very easy, low resistance

liquidity runs between one PD array to another and understanding

the element of time and price.