Showing posts sorted by date for query market structure. Sort by relevance Show all posts
Showing posts sorted by date for query market structure. Sort by relevance Show all posts

Friday, April 26, 2024

Does history make a case that Bitcoin has topped? | Peter L. Brandt

Judge for yourself. It’s called Exponential Decay — and it describes Bitcoin. I hate being the bearer of bad news, but data are data. The fact is that the bull market cycles in Bitcoin have lost a tremendous amount of thrust over the years. You may like the story of this data or not — but you will have to deal with it (or at least account for it, adjust for it or just plain ignore it). In fact, I don’t like the Exponential Decay occurring in Bitcoin — Bitcoin is one of my personal largest investment positions.


There have been four major bull cycles in Bitcoin, with the current advance the fifth major bull cycle [the advance from cycle low to cycle high shown in brackets].

    Dec 21, 2009 to Jun 6, 2011 [3,191X advance]
    Nov 14, 2011 to Nov 25, 2013 [572X advance]
    Aug 17, 2015 to Dec 18, 2017 [ 122X advance]
    Dec 10, 2018 to Nov 8, 2021 [ 22X advance]
    Nov 21, 2022 to xxx x,, yyyy [high so far is $73,835 registered on Mar 14, 2024]

Now, here is where Exponential Decay is showing its ugly head.

    The magnitude of the 2011-2013 was approx. 20% of the 2009-2011 cycle
    The magnitude of the 2015-2017 was approx. 20% of the 2011-2013 cycle
    The magnitude of the 2018-2021 was approx. 20% of the 2015-2017 cycle

Worded another way, 80% of the exponential energy of each successful bull market cycle has been lost. Applied forward, this would indicate that the current bull cycle will experience an an exponential advance of approximately 4.5X or so (80% of the 22X of the 2018-2021 cycle). Taking a low for the current cycle of $15,473 projects a high for this cycle of  $72,723 — guess what — a price that has already been reached.


Well, you will ask, what about the halving? Prices have exploded upwards after every previous halving. And that may happen again. But for now we need to deal with the fact of Exponential Decay. It has happened. It is real. You may not want to believe it, but I place a 25% chance that Bitcoin has already topped for this cycle.

If Bitcoin has topped, what’s next you might ask. Of course I have no clue. But, if Bitcoin has topped I would expect a decline back to the mid-$30s, or the 2021 lows. From a classical charting point of view, such a decline is the most bullish thing that could happen from a long-term view. If you want to see an example of such a chart structure, look at the Gold chart from August 2020 to March 2024.

Do I believe the analysis just presented? I don’t want to, but the data speak for itself.

 

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Wednesday, April 3, 2024

ICT Syllabus for Beginners - How to Study ICT on YouTube | Darya Filipenka

This is my personal recommendation to study the ICT YouTube channel. I truly believe that this information is enough to understand how the ICT concepts works.  
 
 
ICT Syllabus for Beginners:

Part 1: 
Part 2: 
After Month 7: 
Part 3: 
Part 4: 
Part 5: Market Maker Models
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Wednesday, March 27, 2024

ICT Silver Bullet Strategy | Darya Filipenka

The ICT Silver Bullet Strategy is a time-based algorithmic trading model for all assets. For the 10 AM Silver Bullet strategy, focus on 10-11 AM, using fair value gaps and Fibonacci levels for entry/stop adjustments, aiming for a minimum 3R risk-reward, and exit by 11 AM to maximize profits and minimize risks. 
 

3:00 AM - 4:00 AM New York Time
  1. A Silver Bullet trade begins with a directional move either up or down.
  2. Fair Value Gap (FVG): After the directional move, a Fair Value Gap is left behind. This gap is an important indicator for the Silver Bullet trade.
  3. Market Structure Shift (MSS) after taking liquidity. A Market Structure Shift is a shift in direction of price delivery. When price is going in a direction and shifts to the exactly opposite. It occurs when price takes out previous short-term lows or highs within a trend. Identifying these shifts allows for an understanding on which side of the market to be trading with. A Market Structure Shift must be energetic and leave behind displacement to ensure that market is looking to reverse.
  4. Displacement is a location in price where someone with a lot of money comes into the marketplace with a strong conviction to move price higher or lower very quickly. Displacement is characterized by strong and quick price movement that leave behind Fair Value Gaps.
  5. Entering the Fair Value Gap: Once the Fair Value Gap is identified, we enter inside it. This means we take a position in the market.
  6. Target and Exit: I aim for Asian Session Liquidity Level or Higher Time Frame Premium/Discount levels.
10:00 AM - 11:00 AM New York Time
The first thing we think about is the previous New York PM session. If, within the first 30 minutes after the market opens, we're not close to the PM range, we focus on the London Session Raid. This refers to the time between 2:00 AM and 5:00 AM, which is shown on the ETH chart. During the first 30 minutes after the market opens at 9:30 AM, we check where we stand compared to the previous PM session or London session. The market might go up or down, or it might stay stable. Then we wait for the Displacement between 10:00 AM and 11:00 AM, which sets the stage for the Silver Bullet setup.
  1. Every day between 10 AM and 11 AM EST, identify an obvious pool of liquidity that has not been tapped into or engaged.
  2. Wait for displacement (use 1-3-5 minute charts) towards liquidity pool between that time. Find a Fair Value Gap (FVG) on the opposite of the targeted liquidity pool.
  3. Wait for price to trade back into the Fair Value Gap and then reprice out of the FVG towards the targeted pool of liquidity.
After identifying the Market Structure Shift (MSS), I recommend drawing an Optimal Trade Entry (OTE) retracement from the Swing Low (High) to the Swing High (Low). The optimal entry point for trades is typically at the 62% retracement level of that range. Once the trade is entered, the first target is typically set at the -27% extension level, and the second target is set at the -62% extension level.

2:00 PM - 3:00 PM New York Time
The first thing we focus on is the morning and lunch time trading sessions. Our goal is to identify the AM Session Buy Side and Sell Side Liquidity (BSL/SSL) or Lunch BSL/SSL once the PM Session starts (from 1:30 PM to 4:00 PM). This will serve as our reversal point during the afternoon Silver Bullet, where our target will be the opposite liquidity of the lunch/AM session. If it's Friday, our target can be 20-30% of the weekly range. This is known as the T.G.I.F. setup according to ICT.
  1. We wait for the Displacement between 2 PM and 3 PM EST, which sets the stage for the Silver Bullet setup.
  2. We look for a clear pool of untapped liquidity. It's recommended to pay attention to the liquidity levels during the AM and Lunch sessions.
  3. Find a Fair Value Gap.
  4. Wait for the price to trade back into the FVG and then move out of the FVG towards the targeted pool of liquidity.
Once again, we usually consider the AM Session BSL/SSL or NY Lunch BSL/SSL as our clear liquidity pool that has been taken. Then we wait for Market Structure Shift (MSS) and displacement.
 
Consider the 6 hour, the 90 minute, and the 22.5 minute cycles.
Expect highs and lows on the 1 minute chart around Micro-Quarter turns.

Reference: 

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Monday, March 18, 2024

ICT Draw on Liquidity | Darya Filipenka

Liquidity is the lifeblood of the markets. Liquidity is what allows anyone to buy or sell for a profit or a loss. It is what creates opportunity in the markets. While liquidity may not hold much significance for a retail trader, it is of paramount importance to big players who must carefully consider it in order to execute positions successfully. In an non-liquid market there are few buyers and sellers, and trades may take longer to complete, and prices can be more volatile. To help you better understand what liquidity is, I have drawn some simple diagram. It illustrates why we refer to certain levels as 'liquidity'. The point is not that the models themselves are liquidity, but that when a certain price model appears, liquidity is attracted at key levels and price points.


So what is the use of liquidity for us traders? Good question. Liquidity helps us determine where the price is likely to go next. You can learn to trade only using liquidity levels, it's not difficult, but the risks and potential profits will not be so attractive. In order to get a high-quality trading idea, using the liquidity, you need to apply the market structure on the Higher Time Frames, order blocks, and Premium/Discount zones. This helps to understand what kind of liquidity will attract the price and where we should enter into the trade and where we should exit.

How to identify the Draw on Liquidity (DOL)? As a day trader, the DOL can be PWH/PWL (Previous Week High/Low), PDH/L (Previous Day High/Low), or session High/Low from Asia, London, or New York paired with EQH/EQL (Equal Highs/Lows) with a Low Resistance Liquidity Run (LRLR) condition. EQH/EQL (Equal Highs/Lows) are large pools of liquidity so institutions will always draw towards those levels to take out retail.

How do I find the next Draw on Liquidity? First thing, price is always either re-balancing or taking liquidity. Price is going from Premium/Discount array to P/D array. Hence, you must annotate your P/D zones to know If price re-balanced or will re-balance, you must also annotate your liquidity and P/D arrays. To find the next draw on liquidity, you can follow a displacement, use the reaction on a P/D array.

External range liquidity refers to the buy side liquidity above the range high and sell side liquidity below the range low in the current trading range. It Is associated with liquidity runs that seek to pair orders with pending order liquidity, which is in the form of a liquidity pool. External range liquidity runs can be low resistance or high resistance in nature. As a trader, you want your trades to be In low resistance conditions, meaning you don't want any resistance in your path of profitability. While Internal Range Liquidity is the liquidity inside the defined range (External Range Liquidity), This could be In form of any institutional reference that we can use as entry such as order blocks, fair value gaps, volume imbalance, and more.
 
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Saturday, March 9, 2024

ICT Market Maker Buy Model and Sell Model (MMXM) | Darya Filipenka

These six videos of the ICT Market Maker Buy Model (MMBM) and Sell Model (MMSM) series on @I_Am_The_ICT / YouTube Channel is all you need to understand the market:
 
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Wednesday, March 6, 2024

ICT Advanced Market Structure | Darya Filipenka


ICT market structure refers to the way the market behaves and shifts based on various factors such as institutional order flow, imbalances, and key levels. It is represented in a series of either higher lows and higher highs = bullish, or series of lower highs and lower lows = bearish, and the actual turning points that include highs and lows within it (intermediate highs and lows). 
 
The market trades in a generic pattern or rhythm and it is easy to read if one is aware of the basic structure price tends to move in.
  1. Generally, the market trades from short term low (STL) to short term high (STH) back to a new short-term tow (STL). As these STL’s and STH's form, they will develop a 'market structure' of price action.
  2. Any short term low (STL) that has higher short-term lows (STL) on both sides of it is considered an Intermediate term low (ITL).
  3. Any short term high (STH) that has lower short-term highs (STH) on both sides of it is considered an intermediate term high (ITH).
  4. Any Intermediate term low (ITL) that has higher intermediate term lows (ITL) on both sides of it is considered long term low (LTL).
  5. Any Intermediate term high (ITH) that has lower intermediate term highs (ITH) on both sides of it is considered long term high (LTH).
The highest time frame will act as a Long-Term Perspective. This time frame will show you Higher Time Frame (HTF) Levels which will offer Trade Setup Opportunities. Trade ideas will be built upon levels derived from the HTF.
 

The mid-level time frame will act as an Intermediate-Term Perspective. Following the Trade Setup Opportunity found on the HTF, the mid-level will give you more definition in terms of structure based on that HTF Level. Managing trades will be done via a mid-level time frame.
 
The lowest time frame will act as a Short-Term Perspective. Following the Trade Setup Opportunity found on the HTF and insights given with the mid-level. The Short-Term Perspective will give you even more definition in terms of structure. Timing trades with entries will be done via the lowest time frame.
 
ICT Advanced Market Structure pairs very well with the ICT Market Maker Buy Model and Sell Model.
 
 
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Wednesday, February 21, 2024

Turtle Soup Day In Day Out │ Max Singh

The Turtle Soup trading strategy was developed by Linda Bradford-Raschke and published in her 1996 book Street Smarts: High Probability Short-Term Trading Strategies. 
 

The strategy’s name is a reference to a well-known strategy called Turtle trading, taught by Richard Dennis and William Eckhardt in the 1980s to a group of novice traders called the 'Turtles'. 
 
 

Linda Bradford-Raschke inverted the reasoning behind the original Turtle strategy in order to develop a short-term trading method using false breakout reversals at key levels. The strategy can be used on 1 hour, 4 hour or daily charts. The method is simple but requires understanding of order flow and market structure. 

 
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Monday, January 15, 2024

The ICT Judas Swing | Michael J. Huddleston

The » Judas Swing « is an engineered false price run meant to trap traders into taking positions in the wrong direction. Traders can use this to catch the high or low of the day and sometimes even the week if the proper narrative is in play. A Judas Swing can happen either in the London or in the New York session; however it is most common during the London session. During the London session Judas Swing price action usually trades above or below the week's opening price and manipulates buy or sell stops. The Judas Swing usually runs into keys levels such as the previous week's, the previous day's High/Low and the previous session's High/Low, into premium/discount levels, and into imbalances (Fair Value Gaps, FVGs).
 
The concept of a Judas goat leading sheep to slaughter can be applied to price action in trading.
The London session Judas Swing can set the session's or the day's high or low. 
This will come as a quick spike price action hunting for buy or sell liquidity. 
 
► The London Session Judas Swing - Bearish Scenario
The London Judas Swing refers to a false move in the market during the London session that tricks traders into believing the price will continue in a particular direction but then reverses. Focus on trading and identifying the London Judas Swing between New York midnight to 5 AM (New York Local Time).
 
  • Mark Highs and Lows of the Asia Session: Identify the highest and lowest price levels reached during the Asia session.
  • Mark New York midnight candle opening: Identify the opening price of the candle at New York midnight (NY 00:00).
  • Check price trading above New York midnight: During the London Kill Zone (typically from the start of the London session until around 5:00 AM NY local time), check if the price is trading above the opening price of the candle in New York midnight.
  • Check for Liquidity Grab at Asian high: If the price is trading above the New York midnight opening during the London Kill Zone, check for a liquidity grab at the Asian session high.
  • Identify Market Structure Shift: Look for signs of a market structure shift, indicating a potential change in the market direction.
  • Find a favorable entry point (e.g. a Fair Value Gap): Based on the market structure shift and liquidity grab, identify a favorable entry point that aligns with the anticipated market direction.
  • Target: In an ideal scenario, set the target at the Asian session low or any visible sell-side liquidity, aiming for a profitable trade.
► The London Session Judas Swing - Bullish Scenario
Here’s a step-by-step breakdown for the bullish scenario, focusing on identifying a liquidity grab at the low of the Asian session during the London Kill Zone, finding the Market Structure Shift (MSS), determining a favorable entry point (FVG or IFVG), and setting the target at the Asian session high or buy-side liquidity:
 
  • Identify Liquidity Grab at Asian Session Low: During the London Kill Zone (between New York midnight to 5 AM NY local time), observe if the price trades above the New York midnight opening and check for a liquidity grab at the Asian session low.
  • Find Market Structure Shift (MSS): Look for a significant change or shift in market structure, such as a clear indication of a potential bullish movement.
  • Determine favorable entry (FVG or IFVG): Based on the observed market structure shift and liquidity grab, identify a favorable entry point (FVG) or an improved favorable entry point (IFVG) that aligns with the anticipated bullish movement.
  • Set Target: In this bullish scenario, set the target at the Asian session high or any visible buy-side liquidity, aiming for a profitable trade.
► The New York Session Judas Swing - Bearish Scenario

  • Time Frame: Focus on trading from 7:00 AM to 9:00 AM (New York Kill Zone)
  • Price Condition: Confirm the price is trading above 7:00 AM and the NY Opening.
  • Buy Side Liquidity Hunt: Wait for a move higher to trigger buy orders (liquidity hunt).
  • Market Structure Shift (MSS): Look for a significant shift indicating a potential bearish direction.
  • Favorable entry (FVG or IFVG): Identify a strategic entry point aligning with the expected bearish movement.
  • Target: Aim for sell-side liquidity or visible sell-side order clusters.
► The New York Session Judas Swing - Bullish Scenario
  • Time Frame: Focus on trading from 7:00 AM to 9:00 AM (New York Kill Zone)
  • Price Condition: Confirm the price is trading below 7:00 AM and the NY Opening.
  • Sell Side Liquidity Hunt: Wait for a move lower to trigger sell orders (liquidity hunt).
  • Market Structure Shift (MSS): Look for a significant shift indicating a potential bullish direction.
  • Favorable entry (FVG or IFVG): Identify a strategic entry point aligning with the expected bullish movement.
  • Target: Aim for buy-side liquidity or visible sell-side order clusters. 

Understanding the ICT Judas Swing.
 
 Ritchie Naso, a 40-year veteran NYSE floor trader:
 » Algorithms control the stock market. «
 
Reference:
 
 
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