92.

Understanding Swing Points and Impulses in Trading

Identifying Swing Points

• The session begins with a recap of identifying swing points, focusing on the significance of higher highs and lower highs, as well as lower lows and higher lows.

• Emphasis is placed on recognizing extremes during market retracements, which form impulse shapes regardless of the time frame being analyzed.

Impulse Movement

• An impulse is defined as a movement that is never a straight line down; even in extreme cases like cryptocurrency crashes, there are still impulses present.

• After an impulse, a "dealing range" forms. This involves pulling from the highest high to the last significant low to establish a trading range.

Premium vs. Discount

• The established range is divided into two parts: 0% to 50% (discount) and 50% to 100% (premium).

• Key trading rules are introduced: do not buy in premium or sell in discount. Instead, look for buying opportunities in discount and selling opportunities in premium.

Key Levels and Liquidity

Intermediate Term High/Low

• Introduction of intermediate term highs/lows based on candle formations touching Fair Value Gaps (FVG), which indicate potential liquidity levels.

• These key levels serve as critical points for traders looking for liquidity; they often coincide with FVG rebalancing without crossing the 50% line.

Trading Strategy Insights

• Observations about price movements towards imbalances highlight how traders can draw dealing ranges from low to high to identify potential entry points.

• Importance of understanding where liquidity lies within these ranges; if price moves up, it typically targets areas where liquidity has accumulated.

Analyzing Market Movements

Selling Above Open

• A strategy discussed involves selling above market open when anticipating downward movement based on previous analysis.

• Example provided illustrates how this strategy can lead to profitable trades by targeting specific levels within discount ranges.

Rejection Blocks and FVG Analysis

• Discussion transitions into rejection blocks—areas where price reverses after hitting certain thresholds—and their relationship with filled FVG.

• The concept of rejection blocks is explained through visual examples showing how they interact with previously imbalanced areas now rebalanced.

Understanding Fair Value Gaps and Trading Strategies

Identifying Fair Value Gaps (FVG) in Different Time Frames

• The process of identifying fair value gaps involves analyzing various time frames, starting from the monthly chart down to lower time frames like daily and hourly.

• On the daily time frame, specific FVG levels can be identified that have not yet been breached, indicating potential trading opportunities.

• When price approaches these identified FVG levels, it often creates intermediate term lows before making significant moves upward.

Trading Strategy Based on FVG

• Successful identification of an FVG can lead to substantial profit opportunities; for instance, a 4,671 tick move was noted as a significant gain.

• The entire trading model revolves around recognizing ranges and key levels above or below fair value gaps to confirm entry points for trades.

Entry Confirmation Techniques

• Traders should look for confirmation signals when price interacts with identified FVG levels; this is crucial for determining entry points.

• It’s essential to mark highs and lows over the past weeks to quickly identify potential trade setups based on market movements.

Risk Management and Anticipating Market Movements

• Establishing targets involves plotting ranges from discount into premium areas while identifying key levels that serve as targets until reached.

• Effective risk management is critical; without it, traders may not survive long enough to fully understand their strategies.

Homework and Practical Application

• For practical application, traders are encouraged to identify all key levels across different time frames without focusing solely on opening prices.

Risk Management in Trading

Importance of Capital and Risk Management

• Emphasizes the necessity of having sufficient capital to remain active in trading, suggesting that risking everything can lead to being sidelined when opportunities arise.

• Highlights risk management as the most crucial aspect of trading, indicating that it should be prioritized above all else.

Market Analysis and Levels

• Mentions various financial instruments including gold, NASDAQ, Euro, and Bitcoin, with specific levels marked for analysis.

• Indicates a plan to revisit these levels in the following week to assess market movements.

Bitcoin Trading Strategy

• Discusses entering a short position on Bitcoin at approximately $28,287, claiming it was near the peak before a downward trend began.