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EP7: High Probability FVGs inside of a Dealing Range (DRT) — Transcript

by Ali Khan · 2,904 words · 400 segments · language en · Watch on YouTube

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0:02all right guys welcome back and a happy
0:05e to those who are celebrating I've got
0:07quite a few slides to get through today
0:10and with the E celebrations over the
0:12weekend I've been very busy with family
0:14so I'm going to spare you the monologue
0:16today and jump straight into the
0:19economic calendar as you can see Monday
0:22New York session USD high impact news
0:25Tuesday New York session high impact
0:28news Wednesday CPI for the pound is
0:31during London Thursday New York session
0:35monetary policy and bank rate votes for
0:38the British pound 8:30 a.m. unemployment
0:41claims for the dollar Index we got a lot
0:44of news on Friday in terms of
0:47manufacturing PMI so we should expect a
0:50lot of volatility towards the end of the
0:53week moving on we have the dollar Index
0:56and daily time frame now we were aiming
0:58for the minor B liquidity above this
1:01swing High last week I said that would
1:03be a likely draw on liquidity next and
1:06we did in fact hit that if you recall in
1:10one of the previous mentorship videos I
1:14think when we were around here I said we
1:16were likely to sweep the sell side
1:18liquidity below this swing low and dip
1:21into the opening price of this down Clos
1:24candle that sat at that 25 DRT level now
1:28on this chart with t DVC we obviously
1:31left that open and price ran away uh
1:35someone on Twitter actually pointed out
1:37that we had a Divergence on the
1:40underlying Futures contracts for the
1:43dollar Index we did in fact dip into the
1:47opening price of this order block and
1:49sweeping the selli liquidity below these
1:52lows before running higher based on that
1:55I would like to see the dollar continue
1:57higher to run the buy side liquidity up
2:00here and dip into that liquidity void I
2:03like how we've dropped lower into this
2:06order block and completely rebalance
2:08this buy side imbalance and then run
2:10away breaking back above this swing High
2:13currently closing below the 25 DRT level
2:16but again as I said earlier in a
2:18previous lecture when we didn't break
2:20down the way I would have liked to have
2:21seen price break down when we were over
2:23here I said we likely to go into a Seek
2:25and Destroy and that's exactly what we
2:28have seen now again in previous lecture
2:30I was speaking about how we trade inside
2:32of a
2:33consolidation and I mean this is a
2:35beautiful example of how DRT levels
2:38really operate in the market we
2:40identified that this was the dealing
2:43Range High and this was the dealing
2:45range low the reason being is this High
2:48swept byy side liquidity to the left and
2:51then we've continued lower creating the
2:53dealing Range High and the dealing range
2:54low down here now you can see that we
2:57had these relative equal lows that sat
2:59inside side of an extreme discount and
3:01we swept that here digging into this
3:05Terminus gap which sits at the 25 DRT
3:08level I also spoke how we left this bide
3:12imbalance open over here so we didn't
3:15completely close it and this is very
3:17typical in Seek and Destroy we then run
3:20higher sweeping the B side liquidity
3:21above these relative equal highs again
3:24into our Breakaway gap which also sits
3:27around that 75 DRT level and again we
3:31just come shy of completely rebalancing
3:34the cell side imbalance why does this
3:36happen because the algorithm is leaving
3:40it open so that it can come back to it
3:42at a later date right because it's two
3:44primary functions is to run liquidity
3:47and to rebalance an efficient price
3:49action so what does that leave us well
3:52down here we have left cell side
3:54liquidity below these this swing low and
3:57we've run lower to completely rebalance
3:59that cell side balance notice how we've
4:01accumulated inside of an extreme
4:04discount below these lows and then price
4:07really rips higher back into an extreme
4:10premium and sweeping the bile liquidity
4:14Above This high and fully rebalancing
4:17this cell side and balance to the left
4:19again there's been an accumulation of
4:21shorts and Order pairing with the buy
4:24stops above these relative equal highs
4:26and then price moves from an extreme
4:28premium or all the way back down to an
4:30extreme discount it actually comes just
4:33shy of the midpoint of the extreme
4:36discount region and into this down Clos
4:39candle as an order block which also
4:41overlaps with the initial Gap that was
4:44created inside of the initial dealing
4:47range and the consequent encroachment of
4:49that level also overlaps with the
4:51midpoint of that extreme discount price
4:54then runs higher and notice here that
4:57it's not getting above the equilibrium
4:59level
5:00until this candle here the following two
5:03candles you can see how we've Wicked
5:05back down into a discount but prices
5:08failed to close back below the
5:09equilibrium midpoint and we found
5:11support at the mean threshold of this
5:14last up Clos candle which will act as a
5:16breaker where does this sit inside of
5:20the measuring gap which we find at the
5:21midpoint of the dealing range price then
5:24runs higher and breaks through the 75
5:27DRT with a close above it if we look
5:30left we have that Breakaway Gap sat at
5:33that 75 DRT level touch it perfectly
5:36there find support and then run higher
5:39to that minor buy side liquidity pool
5:41that we outlined last week over here so
5:44now we've cleared the major buy side
5:46liquidity pool inside of this dealing
5:48range and we've swept the major sell
5:51side liquidity pool below the dealing
5:53range low I'd prefer price to stay firm
5:56up here I feel like we've done the
5:58majority of the dam damage and looking
6:01at the Futures chart for the dollar
6:03Index we've already swept all this
6:05liquidity so I would like to see this
6:07region ideally support price we have
6:10this breaker over here and we also have
6:13this buy side and balance and I'll
6:15explain the reasoning why I think that
6:17we may want to slip lower at least
6:19initially is because of what I can see
6:22between the euro dollar and the dollar
6:24Index the first thing to note is how
6:27we've swept the buy side liquidity above
6:30this swing high but we haven't closed
6:32above it whereas on the Euro we've
6:34actually closed back below the
6:36equivalent minus CSI liquidity pool and
6:39we've dropped into the 25 DRT so we've
6:43touched into an extreme discount
6:45relative to the dealing range whereas
6:47the dollar Index is failing to get into
6:50the extreme premium of this dealing
6:52range so it could be showing weakness at
6:54the minute we have this inverse fair
6:57value Gap again that sits at that 25 DRT
7:00level and the equivalent inverse fair
7:02value Gap at the 25 DRT level on Euro
7:06now again price hasn't Clos back below
7:08this level and we've repelled this
7:11closing back Above This inverse fair
7:13value gap on the Euro and obviously
7:14closing below this inverse fair value
7:17gap on the dollar last week I did point
7:20out that we were likely to travel higher
7:23closing in this Gap and then continuing
7:26lower back below the cell side liquidity
7:28pool below this swing low we did in fact
7:31see that there a really nice reaction
7:33there of the 75 DRT level bodies closing
7:37below that we did Wick higher back into
7:41the premium end of this inverse fair
7:43value Gap but we have this high low and
7:47this higher high over here making this
7:49down close candle our breaker this
7:51breaker overlaps with this cell side
7:54imbalance which also sits around that 75
7:56DRT so we had a number of confluence is
7:59there which would push price lower and
8:02you can see how towards the end of the
8:03week we declined if we compare the Euro
8:07with the British pound you can see the
8:09pound over here is really failing to get
8:12any lower notice how we have this
8:14measuring up here at the 50% DRT level
8:17and look at all the support that we
8:19found here look at the body supporting
8:21price and then we've run away from that
8:23level we have this buy side IM balance
8:27and again I said I'd rather not see
8:28price come into this and stay firm up
8:31here we do have this inverse fair value
8:34Gap again at the upper quadrant of the
8:37dealing range so if we are to travel
8:39lower I'd like to find Support over here
8:41for the pound we are also inside of
8:45these two consecutive up close candles
8:47as our bullish breaker and the mean
8:49threshold we've tapped that nicely over
8:52here on Friday I'd like to see more
8:54symmetry in the market if I'm being
8:56honest at the minute which is why I
8:57don't really want to call longer term
8:59price PR action really when you're
9:00trading this you want to trade the lower
9:02time frames plot your DRT levels and
9:05then look for extreme premium extreme
9:06discount and look for the liquidity
9:09pools and the inefficiencies within
9:10those dealing ranges ideally 4H hour and
9:131hour liquidity pools is where you want
9:15to Target cuz we could stay inside of
9:17this consolidation at the minute we
9:19don't know right we do have the selli
9:22liquidity below these lows down here and
9:25we've already run the buy side liquidity
9:27up here so if we get back below the
9:29inverse fair value Gap then I'd
9:31anticipate this to act as resistance and
9:34this down Clos candle inside of that
9:37fair value Gap would become a
9:38distribution block sending price lower
9:41back below the swing low so that' be
9:43something I'd be looking for if we are
9:44to break down but again I'm going to see
9:47what the dollar wants to do so there's a
9:49whole lot of things that you have to
9:50wait up right and this is why Forex is
9:53quite difficult at the minute I mean we
9:55had really nice price action over here
9:57but this this is very difficult to trade
10:00choppy up and down price action the
10:02reason why we're seeing the British
10:04pound show strength versus the Euro at
10:08the minute as you can see we've already
10:09run the major buy side and we're
10:11consolidating around the extreme premium
10:14where the Euro dropped lower and we've
10:16touched into an extreme discount is
10:19because of what we can see on the Euro
10:21pound right so the pair Euro pound and
10:24with Euro being the front pair as this
10:27drops lower this is suggesting that the
10:30euro is weaker than the British pound
10:33and that's signified by this drop lower
10:36at the moment with the market conditions
10:39don't overstay your welcome so when you
10:41have a trade on don't look for home runs
10:44right you want to look for low hanging
10:47fruit objectives if you're up 2 to one 3
10:50to one close your trade right this isn't
10:52the current climate to hold on to the
10:54trades and try to squeeze out as much as
10:56you can right be sensible I know you get
10:59excited when you're in profit and you
11:01feel you want to milk it as much as you
11:03can right we've all been there but these
11:06aren't the conditions to do that in
11:09right anyway moving on to the euro
11:13dollar so this is last week's price
11:14action on the hourly time frame now I'm
11:17going to quickly go through what we have
11:19here we have the new week opening gap on
11:22Sunday and this is delineated with this
11:25blue box we obviously have the days of
11:28the week here deline ated with these
11:30vertical dotted lines we've got the 75
11:33DRT level the 50 DRT level and the 25
11:36DRT level from the higher time frame we
11:39have this daily inverse fair value Gap
11:41and the minor SSI liquidity pool that we
11:44were reaching for last week this dotted
11:47line here is CPI and you can clearly see
11:50how that was the manipulation for the
11:53week on Wednesday so let's run through
11:56what actually transpired on Monday you
11:58could see that we had Monday's high run
12:01here on Tuesday and we had Monday's low
12:05run here on Tuesday and we run that
12:07minor selli liquidity pool to the left
12:11leaving this down Clos candle yes the
12:14consecutive down Clos candles but this
12:16smaller candle is inside the range of
12:18this larger down closed candle this down
12:21Clos candle sits at that minor Celli
12:23liquidity low and obviously below the
12:26lows on Monday so you can see how we
12:28were consolid dating around the premium
12:31high of the order block and the 50% DRT
12:34level on Wednesday price runs higher
12:37after CPI digging into this cell side
12:40imbalance left on Friday if we grade
12:42this range you can see that price didn't
12:45want to close above the first quadrant
12:48of this cell side imbalance I have a
12:50separate teaching about this on the
12:52YouTube channel if you want to go and
12:53check that out the clue here is that we
12:55didn't want to close back above the
12:57lower quadrant so this suggests weakness
13:00we couldn't even get to the consequent
13:02encroachment of this sell side imbalance
13:04and then price displaces lower over here
13:07back through that 75 DRT level and then
13:11look at the price action over here
13:12around the 75 DRT level we go into this
13:16consolidation but if you look closely
13:18what else can you see at this 75dt level
13:22well if you look left you can see that
13:25we have this small Gap that also
13:27overlaps with that 7 5dt level and look
13:31at Price being held here like a brick
13:32wall this is also a balanced price range
13:35we have sell side delivery so we've
13:38repriced lower then we redelivered back
13:41through that range and then we
13:43rebalanced through this range so this is
13:45a very strong level of resistance and
13:48just look at the bodies over here this
13:50is telling you the story this is a
13:52algorithmic signature for smart money is
13:55giving them all the time in the world to
13:56get into it and then one final time over
13:58here when time aligns right but I'll
14:01leave that one for your studies price
14:03reacts off that balanced price range and
14:06then drops lower closing back below this
14:09swing low leaving this gap which is
14:12going to become what a breakaway Gap but
14:15I'll get into this in a second again we
14:17close back below the 50% DRT level and
14:21what does price do goes into a
14:24consolidation again at that 50% DRT
14:27level just like we had here on on the
14:29left let me zoom in here on Thursday and
14:32Friday's price action and I want to
14:35bring your attention to this swing High
14:37down to this swing low so this is going
14:40to be our dealing range notice how the
14:4350% DRT level or the equilibrium
14:46overlaps with the 50% DRT level from the
14:48higher time frame note where that
14:50Breakaway Gap formed at the 25 DRT level
14:54then we have a measuring up at the 50%
14:56DRT level and again look price failing
15:00to close above that 50% DRT level and
15:03back into this cell side imbalance we
15:05have institutional order flow entry
15:07drill here that goes above this high
15:10this high and just dips into the cell
15:12side IM balance before repricing lower
15:15notice what we see at the 75 DRT level
15:18we have this Terminus Gap currently
15:20price is consolidating inside of this
15:22area I like how we have these three
15:25consecutive down closed candles as a
15:27potential order block and we finding
15:29support currently above it we have equal
15:32highs over here which sits above
15:34equilibrium of the dealing Range High to
15:37the dealing range low and then if the
15:39dollar really does want to drop then we
15:41have all the buy side liquidity above
15:43these relative equal highs and these
15:45equal bodies up here again with this
15:47cell side imbalance to the left but this
15:50for me would be a shortterm draw on
15:52liquidity I am also noticing this small
15:56by side imbalance that sits inside of
15:59the three down closed candles over here
16:02we may want to dip into this and then
16:04run higher I do like how we've also run
16:07above this swing high so now we have a
16:10low high lower low with this up Clos
16:13candle here that will act as a potential
16:16bullish breaker so there's a few levels
16:18that overlap here as Confluence from the
16:20higher time frame down to the lower time
16:22frame and we've already dipped into the
16:2425 DRT level over here obviously if this
16:28gives up the ghost as ICT would say and
16:30it drops lower than I'm going to sit on
16:32my hands and wait for more information
16:34so it'll be interesting to see what
16:36transpires this week of course next week
16:38we'll review again price action and I'll
16:40give you a little bit more study points
16:42and observations that we have seen
16:44throughout the week so I hope you guys
16:47have found this one insightful if you
16:48found this useful then please drop me a
16:51comment below I always value your
16:53feedback and hopefully I will catch you
16:56again in next week's lecture take okay
16:59guys

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