Love the thread and want to thank you for posting that video as it was quiet inspiring to watch.
I really like your analyses and pair’s and will be looking to get with grips in regard to Cot report. But before i do that i need to polish of other areas that i am struggling with.
I can’t fully understand market structure even after watching ict tpds pt6.
Note sure what market flow is for.
Market strucutre i think is a mast for me before i move forward with my trading.
Thanks for following. I have not watched the TPDS PT6 video so I can’t shed any light there. Let me first say that I am a higher timeframe trader and my view on the daily/4 hour is always transferred down through the smaller timeframes. I watch the 4 hour chart to view the weekly moves and I then lie in wait to trade in sync with that higher time frame move that I am stalking. I am therfore not too concerned with what is happening with regards to market flow and market structure on the lower timeframe charts until I start looking for my entry.The example below should clarify this.
Below I have attached 3 charts of EURJPY that more or less convey my understanding of market flow and market strucure on the daily chart. Chart 1 starts off with key support levels at 95.00 & 90.00 drawn from the weekly chart.
[I](Click links below the charts for better image quality)[/I]
Chart 2 is a daily view of price reacting to the key support level at 95.00. Price trades as low as 94.10 (point 1).
Price then runs up and forms a swing high at point 2 at 97.30.
Price then trades softer back towards key support at 95.00 (point 3).
At this point you could pull you fib tool from the low at point 1 (94.10) to the high at point 2 (97.30) and look to go long at the 61.8%, 70.8% or 78.6% fib levels at ± the big figure 95.00. This is not WRONG but it is an aggressive entry. At this point market flow is still bearish on the daily chart (price is still making lower highs on the daily chart). In terms of market strucutre yes you could be anticipating a higher low to form on the daily chart at point 3 (95.00) but how do you know that the bounce from 95.00 was not just that… a bounce in a market that is in a down trend. Enter market flow and market structure.
In chart 3 we see that price reacted off of the key support (95.00) at point 3, traded past the swing high at point 2 (97.30) and formed a new higher high at point 4 (97.80). When price traded past the swing high at point 2, market flow turned bullish on the daily chart. This is where your bias has now been changed to long and now according to market structure you can now expect and anticipate the formation of a higher low at point 5 (95.80). This is the low risk entry.
Had you entered as soon as price traded to 95.00, you would be trading against the trend and odds are you would have been stopped out since price went as low as 94.10. You could have then entered at point 3 however market flow was still down at this point and while this entry would have worked fine in this example, this will not always be the case. Had you entered at point 3 you would have seen your trade run into profit and then reverse quite some ways against you. If however you had the patience to wait for market flow to turn bullish on the daily chart and then anticipate the formation of a higher low, your entry would have been at point 5 at approximatley 95.80 (80 pips higher than 95.00) but notice how small the drawdown on your trade would have been. You would have been in negative profit for perhaps 30 minutes. After that price just kept on going one way.
You have 2 choices with regards to your stop placement. One, you have a 100 pip stop below the swing low at point 3 or two you use fractal theory and you drill down to the 15 minute chart and apply the [U]same[/U] concepts we have just discussed on the daily charts above for your entry and look to enter with a 30 pip stop. Your take profit objectives would be taken from the daily chart.
Sometimes you will not get a pullback and the formation of a higher low, sometimes price will just run away, it happens but my understanding of market structure and market flow is that it should give you the lowest risk entry. It is not bulletproof, sometimes you will get it wrong but it tilts the odds in your favour and should have you trading with the momentum and the flows from the higher timeframe charts.
Shaunfx, first of let me start of by thanking you, really thanking you for taking the time to explain this in detail with superb examples!!! and numbering each move is a neat touch that made it that much easer to follow.
This resonated with me very well and has drilled in a little more in my head:D ( This is what Ict was taking about on his webinar with Chris Lori)!
Now i get the higher time frame S/R
Get the Fractal formation and anticipation of a pullback to get in at ote, after the bounce(talking about point 3 here).
One small clarification about market structure if you don’t mind. When price goes past that point 2 (which is a swing high) is that where the market structure turn to bullish? OR is it when the price form’s swing higher then point2, which is point4. I.e market structure turns bullish when price form’s higher higher swing point4. So based on example once point for comes in to play we then pull a fib in anticipation that price will most likelty retrace in to OTE?? hope this all makes sence
Thanks once again for great explanation and superb examples!
Getting in a point 3 is still considered an aggressive entry since market flow is still bearish when point 3 forms. When price goes higher than point 2, only then does market flow turn bullish and from that point onwards you may start looking for retracements to get long such as point 5.
Your are mixing up market structure and market flow. When price goes past point 2 then [U]market flow[/U] becomes bullish.
Market structure is the anticipation of a higher low. ie you anticipate a higher low to form at point 5 by pulling a fib from point 2 to point 4 because market flow has alerted you to a change in direction.
I think of it this way, market flow keeps you trading with the current flows of the market. Market flow will alert you to a change in direction.
Market structure has more to do with trend. What is the trend? A trend is defined as price making higher highs and higher lows in an uptrend and lower highs and lower lows in a downtrend.
If you are in a downtrend you use market structure to anticipate the formation of a lower high.
If you are in an uptrend you use market structure to anticipate the formation of a higher low.
I know the videos go into detail about short, intermediate and long term highs & lows with regards to market structure but we wont get into that detail here. I also do not use the fractal indicator, I use my eyes to hone in on swing highs and low of my choosing. I look for key highs and lows that have formed. In my example below I have more or less highlighted the daily swing highs and lows on the 4 hour chart, this should further clarify this for you.
That was very helpful Shaunfx, really great , with really cool examples!
Thank you so much ! Appreciate it. I will keep on avidly following your thread and seeing your progress with great interest!
GLGT:)
Thanks Wanted. No problem, glad I could be of some kind of assistance.
This weekend I was watching TDPS Part 6 and I got 35 minutes into the video and was confused when ICT was referring to market structure to what I know as market flow and I now see why you were reffering to it as market structure. I have prepared 2 charts for ICT to have a look which I will post below and hopefully his answer will clear up a few things.
Hi ICT, if you could please take a look at the below screenshot and clarify my question with regards to market structure vs market flow. The question is typed on the screenshot itself. Thanks!
[I](click on the link below the image for better image quality)[/I]
Please Michael if you could help us out in clarifying this market structure and market flow that would be really big help. I tried to find a video specifally dedicated to market structure and market flow, with lots of examples, but have been unable to do so. However i now understand the idea behind power of 3 and mostly it has a lot to do with market structure. As once fractal is formed at known res/sup and price reverses we wait for 3 bar fractal and from what i understand the 3rd bar brakes markets structure to the upside, so after the 3 bar fractal we go in and start hunting for entries in the 4th bar/day.?
The chart below explains my question. I am just asking why ICT is referring to market flow as market structure. What is the difference from being a buyer at D and E, vs a seller at B. But this still does not change the concepts, I am just seeking further clarification. If this is confusing then rather ignore my question.
The question to ICT is diffidently a valid one, hope ICT can pop by and give us his thoughts on this or even make a video on it if he has time! Would be nice if he could number the moves like you Shaun i find that really easy to follow.
Shaun, Now that you seen Part 6 of the series does this make better sense to why I shorted the Aussie? Looking for the possible stops, if triggered then Daily is Bearish and possible continuation on lower…At least I think I am doing this correctly…Keep up the good work this thread is becoming a goldmine…
[B]AUD/USD 15M Chart[/B]
I’m just curious if I’m doing this whole Market Maker Profile correctly. I studied the video and went with the Aussie since this is what you were going over in this video.
At this time on the Daily Chart we are in a Bearish OTE setup. Zoom down to a 15M Chart shown below, you can see we are in a Market Maker Sell Profile with the Daily OTE at a previous High and previous Resistance level. Since this Market Maker Sell Profile has been underway we recently went into a Bullish OTE. There is no way of knowing if this Bullish OTE will hold or fail so we take some profits and set stop to breakeven to let the market determine which direction it wants to go next…Correct?
To me if this is going to be a long term Bearish Market, but I take 50% off at this point, then it seems like I left a lot of profit behind. Is there a certain way you look at these MMP’s to determine Long Term trades and not just the Short Term trades? Curious to how you go about this, deciding if it’s a 50-150 pip hall or possibly hold out for a 600 pip move.
Its apparent to me that price is winding town in to triangle for a big move on a weekly. Down or up.? Don’t know! what i do know is that price spike was news related and it was that Aus decided to keep interest rates unchanged! and some other positive data that came out of there as well, but mainly interest est rate.
Hi Wannabee, the MT4 COT indicator is the standard COT index. No different from what you would find on barcharts.com or trade navigator etc. The data used is from the CFTC, everyweek I download the file and update it manually. If you take a look at my post on the USDCAD this should give you an idea what I look for. It is not an entry tool, price action will show you when the reversal is forming. I don’t use COT to forecast a particular week, I use this to anticipate a change in trend.
If you take a look at the mockup I did here, your 15min AUDUSD chart was a good live example of what I was referring to. That OTE zone is where you look to take further profits and set your stop to breakeven as you have said.
The answer to your next question is that I have not looked at these MMP’s enough to answer that. This is something that would require many hours of looking at charts and eventually you will see it. Your best bet is to markup as many charts as you can. If you looking for the intermediate to long term trade I personally would start at the 4 hour and work from that.
Eurcad has had a nice reaction off of the 78.6% fib on the daily chart. We have since had another 78.6% reaction off of the 4 hour chart which would have been a good entry. The high at 1.2770 looks like a good target.
Very Nice Shaunt. Excellent trade, i went on my charts and can see how aggressively it shot up to the upside after retrace. A++. Limit order is a nice touch and nice tight stoploss @50 pips. Just relax and wait and if price get’s to that area then it get’s you in without you worrying about missing it. Did you nase this trade only on HTF Support price bouncing off then your job was to indety the retrace nice big round handle at 126 fig. Or did you use COT along with other tools? Congrats.
hey Shaun, just checking up.
How is your trading going are you still in the move of gbp/jpy.
I kinda forgot to ask, what was your premise on entering eur/jpy. ?
Was it MS Break and key level reaction and any price dips where just retraces in to ote to get in sync with htf?
