2016-2017 Mentorship Flashcards
What are the elements of a Trade Setup?
Generally:
- Expansion = Judas Swing
- Retracement = New York Session
- Reversal = London Swing
- Consolidation = Asian Range
Reference Point: PD Arrays
-
Daily Range Structure
- Price Equilibrium
- Manipulation
- Expansion
- Reversal
- Retracement
- Consolidation
In bullish Markets, what ifa low is run?
It’s most probably a SL hunt to gather orders and go higher.
Premium-Discount
What is Fair Value?
- Equilibrium.
- Banks only buy and sell from Equilibrium, Discount, Premium.
Premium-Discount
Where do you want to buy, sell and target to?
- Buying into Premium from Discount.
- Selling into Discount from Premium.
Protraction, Judas Swing When do they happen?
- 00:00 GMT
- 08:00 -09:00 London Session
- 14:00 New York
As a Day-Trader in what direction do you need to trade?
- Weekly & Daily.
What is Institutional Order Flow (IOF)?
- In bullish markets we want to see price supported by down closed candles.
- In bearish markets we want to see price finding resistance by up closed candles.
What do we want to see at Equilibrium?
- We want to see a new order block in our direction before we engage.
- A FVG in our direction before we engage.
At what time are valid PD Arrays printed?
- In current or previous London or
- In current or previous NY Session.
They will be re-capitalised.
SMT Divergence
What are Symmetrical Market Conditions?
- USDX makes a lower low.
- Foreign Currencies and Index Futures do a Higher High.
This confirms the current price action and the underlying “trend” is likely to continue.
SMT Divergence
What are Non-Symmetrical Market Conditions?
- USDX makes a lower low.
- Foreign currencies and Index futures fail to do a higher high.
This is SMT. This does not confirm current price action and the underlying trend is likely not to continue.
Trendline Phantom
How can Market Makers capitalise on this fallacy in Price Analysis?
- Wait for the 3rd touch to fail.
- Look for a OB or PD Array between point 2-3.
- Wait for a shift.
- Expect a liquidity run below the OB or PD Array between point 2-3 and then a run into the real direction.
- At the 2nd point of trend line rests usually the liquidity pool. -
H&S: How to trade them?
- In a bullish market, when you see this pattern, wait for the neckline to be broken. That’s a liquidity run to pair orders and rally higher. The high (Head) of the pattern is the target.
- In a bearish market, when you see this pattern, wait for the neckline to be broken. That’s a liquidity run to pair orders and rally lower. The high (Head) of the pattern is the target.
What is the Interest Rate Triad?
- 30 Year T Bond Market
- 10 Year Note Market
- 5 Year Note Market
The three interest rates should confirm each other. If there is SMT that highlights Smart Money participation.
What is a Reclaimed ICT Order Block?
Bullish Scenario
Reclaimed block is a candle or bar that was previously used to buy price and a short term bounce confirms minor displacement. in the buy side of the curve, these old blocks or down candles will be reclaimed for new longs.
Bearish Scenario
Reclaimed Block is a candle or bar that was previously used to Sell Price and a short term decline confirms minor displacement. In the Sell Side Of Curve - these “old” blocks will be reclaimed shorts.
What do we want to see in a bullish or bearish market before considering a trade entry?
- We want to pair our orders within a liquidity pool.
- We want to see a liquidity pool raided to position ourself with the BIAS.
What are the IPDA data ranges?
3-4 Month Major Market Shifts
1. 60-40-20 Trading Days Look-back
2. 60-40-20 Trading Days Look-Forawrd
Liquidity Pools within the Data Range will be targeted.
IPDA
When do you anticipate a major shift?
20-40-60 Look forward
- We anticipate a major shift in the 20 day range, 40 days or 60 days.
- If it didn’t do in the first 20 days then it will do it on the 40 days marker, if not then at the 60 days marker.
Open Interest
What does it mean when price moves lower and Open Interest is declining?
- If open interest has a 15% or more decreasing, the central bank doesn’t take on risk.
- As price goes lower and lower, Open Interest decreases because they are taking profit as it goes lower. Then we hit a HTF level and they get out.
(If open interest is increasing, the central bank is taking on risk.)
Open Interest
What if in bearish markets, during a consolidation, Open interest increases?
In bearish markets, when there is an consolidation and open interest increases, expect a bearish continuation. Central Bank is selling heavily.
10 Year Notes In HTF Analysis
What are the two primary cycles in the seasonal for treasury notes?
- Bearish for the 1st half of the year.
- Bullish for the 2nd half of the year.
What is the correlation of USDX, YIELDS, T-Note?
- US Dollar Can rally when yields increase & Treasuries prices drop.
- US Dollar can decline when yields decrease & treasuries prices rise.
10 Year Notes In HTF Analysis
What is a High Probability Scenario?
High Probability Scenario
- If the 10 Year Treasury Note rallies (yields/Interest Rates drop) causes Investors to avoid the Dollar based assets.
- This gives a context to look for quarterly shifts in the marketplace.
What if the 10 Year T-Note & Dollar move in tandem?
- Low Probability Conditions.
- If they move in tandem, in the same direction, expect a large consolidation. It’s not going to be a trending environment. We want to look for previous highs and lows to be violated and a return into the range.
When can we expect a trending environment?
If the 10 year T-Note is bearish and Dollar Bullish, we can expect a trending environment.
When are you going to look for a trade that is explosive and trending?
- When the 10 year treasury notes seasonal tendency is in effect and it’s supported with the contrary in price action you see in the dollar index. Long-term positions.
If this doesn’t happens:
1. If we are not seeing this condition, that means it’s going to be high probability for short-term trades and day trades and highly unlikely for long-term positions.
2. If we see the absence of the seasonal tendency in the 10 year T-Note around June-July, then we are going to be focusing on where the highs form seasonally in the seasonal tendency for the 10 y T-Note to get ourselves in sync with the opposite, being a bearish 10y Note trader.
How do you know the seasonal tendency is most likely going to occur?
- Start looking to qualify the swings in relationship to the Dollar Index.
- Are we in Sync? Is there SMT?
- Does the 10year YIELD support the move? Are they declining or increasing? (YIELD Declines = 10 y T-Note Price INCREASE)
What are Interest Rate Differentials?
It’s the difference of the Interest Rate of a Country for a given currency Pair.
- If USD has a rate of 5.25% and EURO 3.75% the EURUSD will be weak as the dollar is bought by investors.
- Funds seek to trade high yielding currencies and place that against a weak yielding currency. They buy strong pairs and sell weak pairs.
How do you select a Forex Pair for Trading?
- Select a country with a High Interest Rate.
- Select a country with a Low Interest Rate.
- Determine the Forex Pair coupling for trades.
- For example: AUD 1,5% vs US 0,75% (AUDUSD)
- Look for strong Support on HTF Charts. (Macro, Large Moves)
- Wait for Smart Money clues it is being bought.
- Seasonal tendency &/or Open Interest to confirm.
- USDX directional confirmation qualifies the setup.
What are the Key Inter-market Relationships?
- USDX UP = Gold DOWN
- GOLD UP = AUS&NZD UP (Gold Exports)
- OIL UP = USDCAD DOWN (CANADA Export Leader)
- DOW UP = Nikkei Index UP
- Nikkei DOWN = USDJPY DOWN
- Yields DOWN = Currency DOWN (Money Seeks Yield)
- Gold DOWN = USDCAD UP
What are seasonal tendencies and what aren’t they?
- Seasonal tendencies are merely a proverbial “roadmap” of past performance.
- They are not to be viewed as a panacea or be all end all concept.
- We don’t force the seasonal tendency, we have to confirm it with our technicals to support the tendency.
What is the OIL-CAD (Futures Contract) Correlation?
OIL - CAD$ move in tandem.
Seasonal Tendency and Quarterly Shift.
If we have a seasonal tendency that suggest bullish prices, when the markets already predisposed to go higher because it’s in a bullish market and it’s in a time of the day when the market should be bullish and it’s also at a time when the market is indicating that interest rates are supporting that bullish idea, it’s also supported in the dollar index.
When all these things come together they dovetail into a beautiful tapestry where you’re going to see a profitable outcome in your analysis.
What are Ideal Seasonal Tendency, High Probability Conditions?
- When the market goes into the direction of the seasonal tendency.
- We want to pair the strongest futures contract with the weakest - or opposing seasonal tendencies.
Which PD Array has precedence above all other PDA’s?
The BREAKER has precedence above all other Arrays.
