Supply/Demand

Question 1

Should we reuse order blocks following a break of structure?

Answer 1

No!

Question 2

What are order blocks synonymous for?

Answer 2

Supply/Demand

Question 3

What is Supply/Demand (order blocks)?

Answer 3

Zones that price marks as a level of interest where liquidity was injected to be used at a later time.

Question 4

What is the last buy to sell? What is the last sell to buy?

Answer 4

Supply/Demand

Question 5

What is required to form an order block?

Answer 5

BOS

Question 6

What is the more refined way to trade (As opposed to taking range supply or demand)?

Answer 6

Using an order block or better an order block with imbalance

Question 7

What is different for an order block with imbalance vs regular order block?

Answer 7

Only one candle in the block.

Question 8

Why are order blocks with imbalance better?

Answer 8

In theory if one candle inside of the block there is more likely to be institutional involvement.

Question 9

In a buy to sell, if the sell wicks above the buy, is it OK to include supply to the top of the wick?

Answer 9

Yes, if the wick above isn’t more than 25%ish the size of the candle. Generally, if we go to lower TF’s, we find there is supply in the wicks.

Question 10

Give a point of the confluence to a good supply zone?

Answer 10

Inducement (price fails to get into the zone, then comes back into the zone later and reacts). This could be institutional traders trying to protect their positions.

Question 11

Should we put more emphasis on an OBI block below a BOS line vs one above it?

Answer 11

Yes, always. We like to see price mitigating the previous range supply/demand.

Question 12

In a sell to buy demand scenario, is there a circumstance we can use an up candle?

Answer 12

Yes, if the candle is a “line candle”. It must have a large wick to the downside showing, even though it closed up slightly, price did try to sell evidenced by the wick.

Question 13

What is a supply to demand flip?

Answer 13

Where supply fails and price comes back and breaks structure again creating demand in its place.

Question 14

What is a range?

Answer 14

Sideways consolidation/and or correction that is easily visible on a price chart when we see sideways price action. Found on all time frames.

Question 15

What does slow movement away from a range mean?

Answer 15

Low Volume environment

Question 16

What does rapid movement away from a range mean?

Answer 16

High Volume environment

Question 17

Can ranges exist in both high volume and low volume environments?

Answer 17

Yes

Question 18

What does movement out of a range and a quick retrace back into the range indicate?

Answer 18

Likely low volume of potential wyckoff in the making.

Question 19

Describe the different pricing ranges in a range?

Answer 19

50% is the equilibrium, above is premium pricing, below is discount pricing.

Question 20

When drawing market structure in a uptrend, how do we draw the range? What about a downtrend?

Answer 20

From up to down or high to low. In a downtrend draw from low to high.

Question 21

What is range created demand?

Answer 21

Price breaks structure where it had been ranging. The previous higher low and higher high is all technically considered demand.

Question 22

What is pivot created demand?

Answer 22

We don’t get the range effect, it’s simply the last sell to buy. Same as an order block with imbalance.

Question 23

What is range created supply?

Answer 23

Price breaks structure down where it had been ranging. The previous lower high and lower low is all technically considered supply.

Question 24

What is pivot created supply

Answer 24

We don’t get the range effect, it’s simply the last buy to sell. Same as order block with imbalance.

Question 25

Is there always a range created zone?

Answer 25

Yes, if you go to a lower TF the last pivot supply/demand is a range. For example, if you see a pivot on a 1 min chart, you would find ranges on seconds charts.

Question 26

What is a method for refining range demand?

Answer 26

Price retraces into a larger range. However, we may see a smaller internal range that caused the larger break. Think of it as the real range that caused the break. This is a good way to refine our entries.

Question 27

How do we look at price from a liquidity based standpoint to give a better edge?

Answer 27

It’s how price returns to the zone. 1. Rounded return - it’s returning to the supply/demand (using supply as example) making higher highs/lows but not significant ones. We can take the curve tool and draw it out to show the liquidity. If lows aren’t being taken out on the way up, it could indicate smart money building positions. Because there is liquidity to be taken it provides the extra edge.

2. Corrective Return - Similar to rounded return. We can draw a trend line under the lows. Still showing lows haven’t been taken out and there is liquidity under.
3. V Shape return- dangerous - No structure, straight up to supply. Not what we are looking for. Typically best to be careful and wait for a better return in these scenarios.

Footnote - You could have a combo where you have a rounded return forming, then an aggressive move, then it rounds again. This could still work on MS confirmation as there is liquidity that we can see.

Question 28

What is range created demand?

Answer 28

Price is aggressively moving to the upside. Mid impulse it stops to range then continues to the upside creating a demand zone?

Question 29

What is ranged created supply?

Answer 29

Price is aggressively moving to the downside. Mid impulse it stops to range then continues rapidly to the downside creating a supply zone.

Question 30

Provide 4 confluences?

Answer 30

1. OB 2. one candle in block (imbalance) 3. ran some liquidity in creation of zone 4. flip zone (i.e. demand failed and ultimately lead to supply zone creation).

Question 31

Is it beat to use the bigger range POI?

Answer 31

YES! It’s just where we start watching for a train. If refine to much less likely to get in a trade. HOWEVER, once we come into a bigger POI - then we watch/refine. For example, wait for structure change out of bigger POI then grab a smaller OBI above and enter off reaction from that or another structure change.