Read Orderflow By Using Time Cycles (PXH/PXL) 🪄

Introduction to PXH and PXL

Overview of the Lecture

• The lecture focuses on the concepts of PXH (Previous Cycle High) and PXL (Previous Cycle Low), emphasizing their significance in understanding market movements.

• The speaker acknowledges that newcomers may find daily charts confusing, questioning why prices behave as they do.

• The goal is to enhance understanding of algorithmic time and price delivery through shared theories, urging full attention for maximum benefit.

Importance of Focus

• The speaker emphasizes that this lecture could be transformative if participants engage with the material seriously.

• A critique is made against theories that only explain market behavior retrospectively, highlighting the importance of predictive analysis.

Market Analysis and Anticipation

Real-Time Examples

• The discussion includes anticipation of market movements based on previous analyses shared with mentorship groups.

• Attention is drawn to specific price levels in the Dixie index, particularly regarding liquidity above equal highs.

Price Objectives

• Observations are made about price reactions at certain levels, indicating potential support or resistance zones.

• There’s a focus on whether current price actions will lead to a swing high or low, which can signal future market direction.

Understanding Time Cycles

Schematic Representation

• A schematic illustrating three time cycles is introduced, showing how previous cycle highs and lows inform current order flow.

• Emphasis is placed on analyzing high and low points from prior cycles to predict future movements.

Fractal Nature of Theory

• The theory discussed applies across various time frames, reinforcing its fractal nature—effective from daily down to lower time frames.

Measuring Order Flow

Interbank Price Delivery Algorithm (IPA)

• IPA refers to how price reacts at previous cycle highs or lows; these reactions are crucial for identifying potential reversals in order flow.

Understanding Monthly Cycles in Order Flow

Overview of Monthly Cycles

• The speaker discusses the concept of order flow and its potential changes, introducing a schematic that includes monthly cycles where each new month represents one time cycle.

• It is explained that during the current monthly cycle, price will reference previous monthly highs and lows. A bullish market anticipates a run on previous cycle lows to purge sell-side equity before moving higher.

• In contrast, a bearish scenario involves running above previous cycle highs followed by reversals targeting lower sell-side liquidity.

Daily Chart Analysis

• The analysis shifts to the daily chart, noting that since the yearly opening for 2024, the market has been repriced higher into specific price levels before reversing and offering sell-side equity.

• The speaker emphasizes how understanding these schematics can change one's perspective on time and price dynamics significantly.

Price Levels and Market Behavior

• Key price levels are annotated on the chart, highlighting how prices reached previous month's highs and lows at critical times (e.g., February 14th).

• Observations are made about whether breaking above a previous cycle's high will act as support or lead to reversal; this logic is crucial for predicting future movements.

Candle Analysis

• The discussion focuses on analyzing specific candles (like up-close candles), extending their ranges to predict market behavior based on historical data.

• The importance of recognizing when markets consolidate within certain ranges is highlighted, particularly around significant dates like March openings.

Implications for Future Movements

• The speaker notes that if prices remain below key candle levels without displacing upwards, it indicates weakness in trading back into those ranges.

• This leads to speculation about potential further declines towards lower targets such as February lows or even yearly openings based on prior cycles' behaviors.

Conclusion: Analyzing Market Trends

• A straightforward approach is presented for determining market direction by observing reactions to previous cycle highs and lows.

Analysis of Euro and Dixie Market Dynamics

Current Market Positioning of Euro

• The Euro has fallen below a significant price level (BC), indicating bearish institutional order flow. Observations suggest that the market is respecting this level, with sell-side pressure anticipated until the Euro trades above this BC again.

Key Price Levels and Patterns

• The Euro has reached December lows, which are viewed as suspicious due to their proximity to the monthly gap. This positioning raises questions about potential low formations within this context.

• A critical observation is whether a low will form inside the monthly gap, potentially aligning with a high on Dixie. Displacement above certain highs would signal a possible reversal in trend for the Euro.

Daily Chart Insights

• The current price action suggests that the market is reacting at key levels where previous highs were formed. Confirmation of these levels will be essential for validating bullish or bearish theses moving forward.

• After reaching 50% of the daily BC, there’s an emphasis on candle closes rather than wicks, suggesting that significant price movements are more relevant than mere spikes in volatility.

Understanding Premium and Discount Ranges

• Discussion around premium and discount ranges highlights how new definitions can help identify trading opportunities. The focus is on how prices interact with various resistance levels established by previous trading activity.

• For a bullish outlook to materialize, it’s crucial for the Euro to displace above specific price ranges while observing corresponding movements in Dixie.

Yearly Trends and Repricing Mechanisms

• Analyzing yearly trends reveals that since January's opening, the Euro has been repriced lower through identifiable expansion legs followed by retracements, indicating ongoing bearish sentiment.

• Various imbalances and rejection blocks have acted as resistance points for pricing; understanding these dynamics is vital for predicting future movements in the market.

Breaker Patterns and Market Behavior

• Notable patterns such as lower lows followed by higher highs indicate potential breaker formations within market structure. These patterns provide insight into future price behavior based on historical data.

• The concept of nested breakers illustrates complex interactions between different time frames and price actions, emphasizing how past cycles influence current trading decisions.

Anticipating Future Movements

• Attention shifts towards whether specific price levels will act as support or resistance going forward. If February's high holds as support, further upward movement may be expected toward relative equal highs.

Interbank Price Delivery Algorithm and Order Flow

Understanding the Cycle IPDA

• The Interbank Price Delivery Algorithm (IPDA) is based on previous cycle highs or lows, which are critical for measuring order flow. A bullish price should find support at the previous cycle's high after breaking above it, while a bearish price should find resistance at the previous cycle's low after breaking below it.

• The concept of IPDA is straightforward; however, traders often overlook it due to their focus on various price patterns and harmonic formations. Recognizing this algorithm can enhance market analysis significantly.

Time Relevance in Price Formation

• Time plays a crucial role in price formation. Understanding that specific price ranges form at relevant times can change how one perceives market movements. This insight allows traders to view markets through a new lens.

Current Cycle Analysis

• During the current 90-minute time cycle, it's essential to determine if the previous cycle's low will act as resistance for further declines. If higher timeframe orders are bearish and liquidity below current prices remains untested, this influences market behavior.

• The high of the current cycle is likely to form within the low of the previous cycle when bearish conditions prevail. This relationship indicates where potential retracements may occur.

Variable Time Cycles

• Traders can adjust their analysis by changing time variables from cycles like years or months down to shorter intervals such as days or even minutes. This flexibility allows for tailored strategies based on different trading styles.

Bullish Continuation Profiles

• For bullish scenarios, traders look back at previous highs during current cycles to identify potential lows forming at those levels. This approach helps predict upward repricing towards higher objectives not yet reached in bullish markets.

Intraday Application of Order Flow Theory

Focus on 90-Minute Cycles

• To apply order flow theory intraday, emphasis is placed on 90-minute cycles during trading sessions (AM and PM). These cycles are particularly volatile and provide significant insights into market dynamics.

• The choice to focus solely on AM and PM sessions stems from personal experience indicating these periods yield more volatility, especially for index futures trading strategies.

Session Characteristics

• Each session has unique characteristics that influence accumulation, manipulation, or distribution within smaller cycles nested inside larger ones. Understanding these nuances aids in better predicting order flow movements.

Specific Time Windows

• For effective analysis during different sessions:

• In London sessions: Focus on Asia’s high/low rather than 90-minute cycles.

• In morning/PM sessions: Utilize detailed insights from identified 90-minute windows for enhanced decision-making.

Morning Session Breakdown

• Key morning session windows include:

• 7:00 AM - 8:30 AM: First window

• 8:30 AM - 10:00 AM: Second window

• 10:00 AM - 11:30 AM: Third window

Understanding Price Delivery and Market Behavior

Introduction to Price Delivery Concepts

• The discussion begins with the speaker reflecting on the timing of examples shared, noting they occurred within 48 hours after a specific thread release.

• Emphasizes the value of time, stating it is their most precious resource, and expresses gratitude for sharing insights that could be kept private.

Key Examples of Market Behavior

• Introduces a continuation example from Thursday, highlighting market behavior between 8:30 to 10 AM where a high formed before selling off.

• Describes how price traded above previous cycle highs during the 10 to 11:30 window, reinforcing the importance of understanding price ranges as support levels.

Analyzing Market Sessions

• Discusses how price action remains within established ranges after breaking above previous highs, illustrating foundational logic in algorithmic price delivery.

• Notes that Thursday's PM session was messy due to consolidation and time distortion caused by being a day prior to NFP (Non-Farm Payroll).

Observations During NFP Week

• Highlights that despite low probability environments like NFP week, foundational logic still applies in analyzing market movements.

• Details how prices remained inside certain ranges during specific time windows while also indicating moments when markets began expanding or retracing.

Friday's Market Dynamics Post-NFP Release

• On Friday post-NFP release, there was significant manipulation followed by consolidation; market behavior shifted around key times such as 9:30 AM and again at 10:30 AM.

• Explains how prices rolled over after trading below previous cycle highs and discusses the initiation of sell programs once certain thresholds were crossed.

Market Analysis and Trading Strategies

Understanding Market Cycles

• The discussion begins with the concept of predetermined market cycles, emphasizing that specific price levels should be reached within a session. The speaker suggests fractalizing this logic to apply it to 90-minute cycles.

• A critical reference point is identified as the previous cycle's low, which is essential for determining price movements before the end of the current cycle. The timing of reaching this low is highlighted as significant.

• Despite some irregularities in market behavior (referred to as "coring outside of the lines"), there are warning signs when certain thresholds (bxh) are broken, indicating potential shifts in order flow.

Analyzing Trade Execution

• The speaker transitions to analyzing a trade executed during the morning session, suggesting that reaching the previous cycle's low right before session close is not random but indicative of underlying market dynamics.

• A specific trade model (market maker sell model) is discussed, focusing on how prior annotations and understanding of market structure informed trading decisions during a PM session following economic data releases.

Key Trading Insights

• The execution strategy involved monitoring price action relative to previous cycle highs and lows. The speaker notes that aligning time and price was crucial for making informed trading decisions.

• Emphasis is placed on marking ranges on charts, particularly identifying premium and discount areas based on previous cycles' high-to-low measurements. This helps in understanding potential market movements.

Importance of Equilibrium Levels

• Traders are encouraged to pay attention not only to high and low points but also to equilibrium levels (50% range). Recognizing these can provide insights into future price actions.

• The analysis concludes with reflections on how initial concepts from daily charts translate effectively into minute-by-minute trading strategies, reinforcing consistency across different time frames.

Final Thoughts and Recommendations

• The speaker expresses gratitude for audience engagement throughout the lecture while encouraging viewers to revisit complex topics until they achieve clarity in their understanding.