Sunday, 29 May 2022

Look Here First

 Before entries follow the three step, a pending order at OB wont work and even than price can hit SL, use stop loss.

1. look for a liquidity grab / Imbalance rebalance
2. wait for a BOS (break of structure) with a FVG
3. then Retest of OB (order block) is our entry.
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ICT defines the two major time zones as:

(1) London 0200 hrs. - 0500 hrs. NY Time
(2) New York 0700 hrs. - 1000 hrs. NY Time

I believe he defines the Asian time zone as 2300 hrs. - 0200 hrs. NY Time.

Keep in mind that he is not saying these are the only times the markets are open, these are just the times when he is looking to see what he is looking to see (FVGs, Liquidity Runs, Market Structure Points, Significant Highs and Lows, etc.)

And for the indices, he would also include 0830 hrs. - 1200 hrs. NY Time. and 1330 hrs. - 1615 hrs. NY Time.

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To simplify - If one wants to trade
1) London killzone - start looking trading opportunities 7am London time - 1h before official session open and be aware that alot more volume comes in when it opens officialy - (8am London Local Time).
2) If one wants to trade NY killzone - start looking trading opportunities 7am NY time - 1h before official session open and be aware that alot more volume comes in when it opens officialy - (8am NY Local Time).
Also with NY gotta keep in mind NY Stock Exchange open, (09:30 local NY time) - even more volume. So NY has kind of like a 2 official sessions.

If theres no opportunities on first hour of the killzone then one can wait for official session open to look for more/cleaner confirmations and being aware that first session official hour can be trap move (but not always, sometimes also countinuation) to get traders on the wrong side of the market.

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Feel free to build/develop Your own system that You like, only a certain type of price behaviour You wanna see, that You know that fits Your personality and only trade that what You can see, what might work for me might not suit for You.
ICT talked about Your "bread & butter" setup constantly in hes older videos thats uniquely Yours in its own way - once it clicks and once You find it/develop it further, then You only know what Youre looking for .. like you see it, its there and thats all You need, just 1 move Youre looking for and that 1 move can build Youre whole trading career! Be it OTE, Judas swing, higher timeframe breaker block setup, only a certain session liquidity grab followed by LTF BOS & retest, daily candle raid, LTF equal lows/high liquidity range setup, whatever it is. Go find it, backtest, forwardtest and make it uniquely Yours that You can follow and take without hesitation!

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To see what I am talking about requires you to spend some time on the charts, like I did, and look at the OB on the HTF and zoom into LTFs to see the BOS. I went further to also look at the tick charts.

How did I reach to the conclusion of the Order Block and Break of Structure?

I studied the BOS more on this thread (and other sources) and I was satisfied with it as a tool that I can use. As for the OB theory I knew it for a long time but I wasn't satisfied with it. I believe earlier on this thread I questioned the OB as a strong tool to use (as it is not respected at times). So I sat down and highlighted an OB where price returned to and respected it (on a HTF). Then I zoomed down to LTF to see what is happening around that OB and I took notes of what I saw. The obvious things I noted - liquidity grab (some), displacement, FVG, the BOS and where it happens (near Support/Resistance).

The first thing you need to understand is the meaning of an OB.

ICT defines a Bullish OB as:
1. The Lowest Candle or Price Bar with a Down Close (bearish);
2. That has the most range between Open and Close;
3. And is near a "Support" level.

He goes further and say its validation is when that Last Candle or Bar is traded through by a later formed Candle/Bar. In terms of Price Action you can see a breakout from that Last Candle/Bar (it doesn't have to be one opposite candle/bar - it can be many opposite candle/bars). You want to see a displacement that follows that Last Candle/Bar. In a BOS price breaks through the previous Low or High (a displacement).

Take this knowledge about the OB and combine it with the BOS that is explained on this thread and use the HTFs and LTFs to see my conclusion. Like I said even ICT briefly mentioned it on one of his series videos.

Bear in mind of the fractal nature of the market - a wave is subdivided into smaller waves and so on and so on. Also a Candle/Bar in HTF is is divided into candles/bars which can be seen in LTFs.

For an illustration just pick an OB in a HTF (preferably H1 and above) and show me the pair and time-frame and then I will break it down for you. I don't want to select an OB and show you the break-down to suit what I'm saying. Note if the OB candle/bar has a wick (and/or the candle prior) you are highly likely to see a BOS of the lower degree. So to make it harder for me choose an OB candle/bar (and prior candle/bar) with no wick for price to pass through. Why select from a HTF? I don't have past tick data to break it down any further below M1.

The best way for you to see all of this is through spending some time on the charts (research and practice, practice, practice). Always bear in mind of the fractal nature of the market.
Attached Images (click to enlarge)
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It is not necessary to mark a daily candle and inside that h4, and H1 then m30 till m1

Simplest is mark htf only and wait price to reach there and see the reaction and capitalize it. I.e, weekly, daily, h4 or m15 choose any one you like.

What you have to mark:
- imbalances as price comes back to rebalance them, wait for a bos and return to ob is entry

- Order blocks, breaker blocks, as price sweeps them for Liquidity, but when respects wait for a bos and retrum to ob is entry (then price creates new imbalances)
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