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Identifying IFC Candle

In this chapter, we will learn how to identify Institutional Funding Candle (IFC), which is a strong indication for reversal or continuation of the market.

Understanding IFC Candle

  • IFC stands for Institutional Funding Candle.
  • It collects all money in terms of structure, not terms of the candlestick.
  • It is identified by taking out the previous major low or high and then closing below it to confirm that the market is looking for a reversal or continuation.
  • This type of candlestick is most commonly seen at the top or bottom of a structure.

Buying on IFC Candle

  • Once Market takes out liquidity, wait for lower time frame confirmation before buying or selling.
  • If Market momentum is bullish and taken out previous measure low, then create something like an IFC candle.
  • Buy on this candle as it can be your inducement or major low.
  • This move is called our single leg move.

Selling on IFC Candle

  • If Market momentum is bearish and taken out previous measure high, then sell on this candle as it can be your inducement or major high.
  • This move is called our single leg move.
  • However, if Market momentum is bullish and taken out previous measure high, this can be a short-term sell as you are selling against the trend.

Refining IFC Candle

  • Sometimes Market does not create any imbalance after taking out liquidity. In such cases, refine using demand zone created by taking out the previous candle's low.

Identifying Imbalance

  • Proper imbalance must exist in order to confirm a valid buy/sell using an IFC candle.
  • Shadow can also be used to identify imbalance.

Candle Color

  • The color of the candle does not matter. The rules for buying and selling remain the same.

IFC Candle as POI

  • IFC candle acts like a POI (Point of Interest) which can be used for buying and selling in a lower time frame confirmation.
  • Same scenario is applicable if Market momentum is bearish.

Conclusion

  • Identification of IFC candle involves taking out previous major low or high and closing below it to confirm reversal or continuation.
  • Proper imbalance must exist for valid buy/sell using an IFC candle.
  • Shadow can also be used to identify imbalance.
  • Candle color does not matter.

Identifying IFC Candles

In this section, the speaker explains how to identify IFC candles and when to sell based on market momentum.

Identifying IFC Candles

  • To identify an IFC candle, first identify the trend. If the market momentum is bearish and taking out the previous measure high, it can create a hammer or shooting star type of candle.
  • Different types of candles include long shadow and small body.
  • Once the previous measure high is taken out, you can sell into lower time frame confirmation.
  • If the same thing happens in a bullish trend, you can also sell for short term but if market momentum is bearish, you can sell for longer term.

Entry Points

  • Two ways to enter: switch to lower time frame in one minute structure or wait for Market break this low which one is a change of character and next day possible zone is here for the cell.
  • The entry points are applicable only if Market momentum is bearish and not applicable if Market momentum is bullish and Market taken out the previous High because in the first move maybe Market take a small pullback and then continue to go higher.

Entry Time Frames

In this section, the speaker explains how to choose entry time frames based on higher time frames.

Choosing Entry Time Frames

  • Choose entry time frames based on higher time frames. For example:
  • If using 15 minutes as higher time frame, use one minute for entry time frame
  • If using H1 as higher time frame, use five minutes for entry time frame
  • If using 4 Hour as higher time frame, use 15 minutes for entry time frame

Recent Low

  • Identify recent low because once Market breaks it acts like a change of character.
  • First pullback must be after Market breaks the recent low.
  • Before entry, price must be taken out of the inducement before the sell.

Valid Inducements

In this section, the speaker explains how to identify valid inducements for selling.

Valid Inducements

  • A valid inducement is a pullback that takes out the previous candle high.
  • If Market breaks this low, you can sell at this point.

Identifying Sell Opportunities

In this section, the speaker explains how to identify sell opportunities in a bearish market.

Identifying Order Blocks

  • The previous measure high is the first indication for a reversal.
  • Identify various hour order blocks.
  • Look for the last buying candle before the drop and mitigate it by identifying an imbalance on the next candle.

Entry Criteria

  • Proper imbalance available on a candle.
  • Valid proper order block identified.
  • Target will be measure low as per 15-minute timeframe.

Identifying Price of Interest (POI)

In this section, the speaker explains how to identify POI and buy/sell opportunities based on internal and major structures.

Internal Structure vs Major Structure

  • Internal structure is swift and indicates a small reaction.
  • Major structure is strong and indicates a reversal.

Identifying POI

  • Focus on measure high or low sweep when selling in lower time frame confirmation.
  • Liquidity identification is key to finding POI.
  • Only order block is not a POI; it's just additional conference for POI identification.