Understand MMXM In 1 Hour (W/ Time Cycles)

Market Maker Models and Time Cycles

Introduction to Market Maker Models

• The lecture is a follow-up on insights shared during the "Words of Wrom" podcast, emphasizing the importance of understanding market maker models (MXM).

• The session will cover MXM, the concept that every retracement followed by an expansion represents a lower time frame MXM, and how to implement time cycles with these models.

• The speaker encourages active engagement and note-taking for better comprehension of market dynamics.

Understanding the Market Maker Buy Model

• A schematic of the market maker buy model is introduced; it’s crucial for grasping subsequent concepts.

• Initial consolidation occurs above certain price levels, creating buy-side liquidity as traders perceive resistance at these highs.

• As the market expands lower after this consolidation, it retraces before expanding again—this pattern indicates sell-side delivery until reaching a specific point of interest (POI).

Transition from Sell-Side to Buy-Side Delivery

• Upon hitting the POI, a smart money reversal occurs where sell-side delivery transitions into buy-side delivery.

• This shift indicates that the market is now targeting buy-side liquidity engineered above previous highs.

Exploring the Market Maker Sell Model

• The market maker sell model operates inversely to the buy model; initial consolidation creates perceived strong support.

• Traders anticipate upward movement and place stop losses below recent lows, leading to potential sell-side liquidity being targeted as prices expand higher.

Smart Money Reversal in Sell Model

• At another POI, smart money reversals signal a shift towards drawing down to sell-side equity below prior lows.

• This dynamic illustrates why it's termed "sell side"—liquidity rests beneath all lows due to traders' stop-loss placements.

Conclusion on Market Maker Models

• The foundational explanation provided serves as groundwork for deeper exploration into market maker models throughout the lecture.

Understanding Market Maker Models

Introduction to Market Maker Concepts

• The speaker acknowledges that newcomers to trading and ICT concepts may find certain quotes confusing, prompting the creation of schematics for clarity.

• Emphasizes the importance of recognizing market maker models as opportunities within market movements, encouraging viewers to take screenshots for better understanding.

Analyzing Market Movements

• Focus is directed towards a gray box on a chart where the market expands higher before retracing with two downward candles, indicating engineered equity.

• Retail traders may misinterpret this retracement as a signal to short the market, placing stop losses above recent highs; however, the market is actually drawn towards higher price levels.

Anticipating Price Levels

• The anticipation of a low forming is discussed as part of smart money principles, leading to upward movement toward engineered liquidity from previous price actions.

• Acknowledges that original consolidations may not always appear clean but emphasizes understanding that markets are drawn towards levels above current prices.

Understanding Retracements and Expansions

• Highlights that retracements formed by expansions in opposing directions signify lower time frame market maker buy models.

• Describes how overall structure consists of expansion-retracement-expansion cycles, illustrating both bullish and bearish scenarios in trading.

Bearish Market Dynamics

• In bearish examples, after an initial drop and subsequent retracement into a gap area, sell liquidity is created which can be targeted later when higher time frame order flow remains bearish.

• Discusses how until specific price levels are reached, every retracement higher serves merely to engineer sell liquidity for future attacks.

Implementing Time Cycles with Market Maker Models

Understanding Time Cycles

• Introduces three time cycles on a schematic and explains their relevance in determining order flow based on previous cycle highs and lows.

Key Liquidity Insights

• Encourages viewers to refer back to earlier cycles' highs/lows for anticipating key market reversals based on current cycle dynamics.

Bullish vs. Bearish Scenarios

• Explains how if bullish signals arise during current cycles while taking out previous lows indicates potential reversals toward prior cycle highs.

Defining 'Cycle'

Understanding Time Cycles in Trading

Importance of Time Cycles

• Selecting the appropriate time cycle is crucial for traders focused on current session buyers, as daily cycles may not be relevant.

• The choice of time cycles is subjective; traders can utilize various previous cycles (90-minute, daily, weekly) based on market behavior.

Analyzing Market Sessions

• Observing how price moves between range lows and highs helps identify key liquidity points across different sessions.

• Key levels such as Asia High and Asia Low are essential reference points for anticipating market reversals during trading sessions.

Liquidity Pools and Price Levels

• Traders should document or mark significant price levels to understand potential liquidity pools that could influence market movements.

• Focus on Asia High/Low and previous day's high/low to gauge potential smart money reversals during trading sessions.

90-Minute Cycle Breakdown

• The first 90-minute cycle starts at 7:00 AM, serving as an accumulation window; subsequent cycles serve manipulation and distribution purposes.

• Each session has defined 90-minute windows that help traders navigate intraday price action effectively.

Objectifying Market Analysis

• Using specific time windows allows traders to objectify their analysis amidst fluctuating price actions and candlestick patterns.

• Recognizing when a high or low from a specific cycle is breached can signal potential market direction changes based on smart money activity.

Identifying Smart Money Reversals

Understanding Market Structure and Smart Money Concepts

Inversely Correlated Markets

• The concept of inversely correlated markets is introduced, emphasizing the importance of recognizing these correlations during specific points of interest to anticipate smart money reversals.

Market Structure Shift Patterns

• A market structure shift pattern occurs when a high is displaced with speed, indicating potential imbalances that can lead to retracements followed by upward expansions.

Importance of Highs and Fair Value Gaps

• The significance of highs formed within a bearish fair value gap (CB) is discussed; this setup can signal a market expansion after taking out previous cycle lows.

Interbank Price Delivery Algorithm (IBDA)

• When the market displaces above a high, it indicates a switch in the IBDA from selling to buying, suggesting higher prices are likely next. This pattern is considered one of the strongest reversal indicators.

Bullish Breakers and Support/Resistance Dynamics

• The last up-close candle before a downward move acts as a bullish breaker, confirming low-risk buy opportunities. True resistance turning into support requires alignment with specific frameworks rather than random price movements.

Balanced Price Range and Market Maker Models

• The discussion transitions to balanced price ranges within market maker buy models, highlighting how movements from previous cycle lows to highs indicate anticipated higher prices.

Bearish Fair Value Gaps and Short Entries

• An original consolidation leads to manipulation above previous cycle highs, forming bearish fair value gaps that set up for short entries when displacement occurs below key levels.

Support Turns Resistance: A Conditional Framework

• Support turning into resistance works under certain conditions; true support/resistance dynamics are only effective when structural frameworks are present alongside imbalances.

Simplifying Entry Patterns through Framework Application

• Understanding how to apply these frameworks allows traders to identify simplistic entry patterns effectively. New traders may find initial concepts complex but should focus on historical data for clarity.

Real Market Application of Concepts

Understanding Real-Time Market Execution

Critique of Online Trading Education

• The majority of online trading educators focus on hindsight analysis, showcasing past trades rather than executing live trades.

• There is a lack of real-time execution demonstrations, raising questions about the credibility and effectiveness of their teachings.

Analyzing Real-Time Executions

• The speaker emphasizes the importance of understanding market behavior leading up to trade entries, not just the entry points themselves.

• A specific low point in a fractal 30-minute cycle is highlighted as crucial for recognizing smart money activity.

Fractal Cycles Explained

• The concept of 90-minute cycles is introduced, with specific time frames outlined (11:30 AM - 1:00 PM).

• The significance of lows formed during these cycles is discussed, particularly how they serve as support levels in subsequent price movements.

Market Behavior and Price Levels

• Observations are made regarding market reactions at key price levels post-candle formations, indicating bullish sentiment.

• The speaker discusses managing positions based on market behavior and potential stop-loss strategies.

Monitoring Market Reactions

• Attention is drawn to buy-side equity pools and their impact on market movement; consolidation periods are noted as critical for timing expansions.

• Real-time data from March 25th serves as an example to illustrate live market conditions versus retrospective analysis.

Understanding Manipulation Cycles

• Explanation of FC (Fundamental Change), detailing its two-stage delivery event occurring at specific times (2 PM and 2:30 PM).

• Observations on aggressive market movements following liquidity runs highlight the importance of timing in trading decisions.

Market Dynamics and Trading Strategies

Understanding Trader Behavior

• Many traders tend to chase market movements, believing they must act quickly to capitalize on upward trends, often leading to impulsive decisions.

• The speaker emphasizes the importance of observing market velocity and speed below certain price levels as indicators for potential downward movement.

Real-Time Market Analysis

• The analysis is conducted in real-time without hindsight, showcasing the significance of each annotation made during trading sessions.

• A specific horizontal line is monitored as a critical price level for taking partial profits while confirming the presence of a sell program.

Resistance Levels and Market Trends

• The speaker anticipates whether prices will find resistance at key levels, indicating potential further declines in the market.

• If prices displace above a certain level (CB), it would signal an invalidation of the current sell program, prompting exit from positions.

Observing Market Patterns

• As time progresses towards the end of the trading day, there’s an expectation for significant down-close candles if resistance holds.

• The speaker notes that all premium arrays functioned as resistance during sell-offs, reinforcing their strategy for anticipating lower prices.

Reflecting on Trading Insights

• The speaker addresses skepticism about his methods and highlights a specific time window where significant market movements occurred.

• He illustrates how algorithmic precision can be observed through historical data analysis, emphasizing its undeniable nature.

Importance of Journaling Experiences

• Experiencing "light bulb moments" in trading can lead to profound insights; documenting these experiences is crucial for future reference.

• Maintaining a journal helps track progress and reflections on learning moments shared by mentors or during personal trading experiences.

Continuous Improvement in Trading Skills

• Traders are encouraged to persist despite challenges; consistent improvement based on self-assessment is vital for success.

Trading Insights and Strategies

Importance of Quality Over Quantity in Trading

• Emphasizes the significance of not overextending oneself in trading; one good trade per day on a demo account is sufficient.

• Mentions that traders should avoid trying to do more than necessary, reinforcing that quality trades are more valuable than quantity.

Sharing Passion and Support

• Highlights the importance of sharing passion and support for those struggling in trading, suggesting that encouragement can be uplifting.

Breakdown of a Specific Trade Example

Long Trade Analysis from May 3, 2024

• Introduces a long trade taken on May 3, detailing the anticipation for market movement towards liquidity levels.

• Discusses original consolidation patterns observed during a downward trend leading up to the trade.

Market Dynamics and Price Levels

• Identifies key price levels (e.g., 18,000) as significant based on historical data and market behavior.

• Describes signs of reversal observed at specific times which influenced the decision to enter long positions.

Technical Analysis Techniques

Understanding Market Structure

• Explains how market structure influences trading decisions; focuses on recognizing patterns rather than being swayed by individual candlestick movements.

Anticipating Price Movements

• Details how alignment with anticipated price movements is crucial; emphasizes waiting for confirmation signals before acting.

Time-Based Liquidity Considerations

Analyzing Cycles and Imbalances

• Discusses time-based cycles affecting price action; highlights how certain highs form within specific time frames can indicate future movements.

Smart Money Concepts

• Introduces concepts related to smart money strategies, emphasizing buying opportunities during discounted prices before potential upward responses.

Recognizing Divergence Signals

SMT (Smart Money Technique)

Market Analysis and Insights

Market Displacement and Anticipation

• The market has clearly displaced above a significant red line, indicating a bullish trend. An "upgr scandle" (likely a typo for 'upward scandal') formed the high just before reaching this price level.

Final Draw and Time Distortion

• Anticipation is building for the final draw to equality, which is expected to be reached soon. The speaker notes that time distortion is occurring, with consolidation phases typically leading to expansion.

Conclusion of Discussion

• The speaker reflects on sharing valuable insights throughout the discussion, emphasizing that attentive listeners may uncover new understandings from the content presented.

Engagement and Feedback Request