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How to Predict Forex Moves Using Directional Bias — Transcript

by MHU FX · 2,888 words · 392 segments · language en · Watch on YouTube

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0:03understanding directional bias when I
0:05say directional bias I'm literally
0:07talking about in which way price is
0:09moving and this is all based off of the
0:10daily time frame we all know that price
0:12does not move in a straight line and an
0:14uptrend price will make higher highs and
0:16higher lows and when it comes to a
0:18downtrend price makes lower lows and
0:19lower highs in an uptrend price could
0:22make higher highs consolidate higher
0:25highs consolidate higher highs and in
0:27the downtrend price could make a low
0:30consolidate low consolidate and then
0:33another low what I just showed you now
0:35compared to what I just showed you
0:37before is exactly the same thing
0:39whereever price is going to expand like
0:40this or retrace like this the agenda is
0:43the same there's going to be liquidity
0:45generated above these highs there's
0:47going to be an accumulation of orders
0:49same thing here there's going to be an
0:50accumulation of orders along the way
0:52down so every single high price makes
0:55there's going to be liquidity above
0:56every single one of these highs and
0:58price is going to run past that run past
1:00these highs and run out that liquidity
1:02on the top side so often times it might
1:04be a little dip before the rise so where
1:06it just Taps into this Taps into that
1:09liquidity manipulates that low and then
1:11runs higher it's the exact same thing
1:12happening here and exact same thing
1:14happening on the downside when price is
1:16moving higher it's most likely going to
1:18either expand and consolidate or expand
1:21and retrace but these two phases within
1:24this whole expansion the agenda is the
1:26same thing price is generating liquidity
1:28to then run it later so we take this
1:31liquidity so there's money beneath here
1:32the moment we drop beneath this low
1:35we've taken that liquidity and then we
1:37run up higher to run out the liquidity
1:38on top same thing here when price is
1:40dropping lower it's most likely going to
1:42run out liquidity some liquidity beneath
1:44these lows so for example this one right
1:46here I know this chart is getting really
1:48messy runs it and then goes higher to
1:51run out all the rest of the liquidity
1:52above these highs and then it exact same
1:54thing on the flip side there's going to
1:55be liquidity beneath these lows price is
1:57mostly going to do something like this
1:59run out liquidity above these highs one
2:01of these highs it could be all of them
2:02it could be just some of them and then
2:05run that liquidity beneath this low it's
2:07the exact same thing here consolidate
2:09consolidate Pass Run higher first and
2:11then drop taking out that liquidity on
2:13top and then taking out that liquidity
2:14on the bottom and then continue when
2:16it's move down lower so now you
2:18understand this price does not move in a
2:19straight line there's often times
2:21consolidation can take weeks can take 2
2:24weeks 3 weeks sometimes or consolidation
2:26could be one day all this is like I said
2:29is a generational of liquidity to run it
2:31later accumulating more orders same
2:33thing here we're accumulating orders and
2:34we're generating liquidity to run it
2:36later now when it comes to understanding
2:38the trend like I said price do not moov
2:40in a straight line so now this is Euro
2:42USD when price is moving up higher price
2:45is going to move higher and then there's
2:47going to be a
2:48retracement here some kind of
2:50retracement or accumulation price
2:52doesn't really retraced anywhere it just
2:54goes sideways so in other words this is
2:56accumulation of orders and then there's
2:58going to be another expansion when
2:59prices on its way down price is making
3:01lower lows then we come up high then we
3:04drop lower again then we retrace and
3:07then we drop low again and then we're
3:09having a a retracement again so like I
3:11said price does not move in a straight
3:12line what I used to do is when price was
3:15accumulating like this I would always be
3:17expecting some kind of larger
3:18retracement deeper often time price
3:21wouldn't even come back why because it
3:22didn't need to retrace because the
3:24agenda was complete which was to
3:25accumulate orders and then take it
3:26higher again now with this you have to
3:29understand that price moves from a
3:30discount into a premium and then from a
3:32premium into a discount so for example
3:34here when price runs above these highs
3:37this High over here price is at a
3:39premium price and then ideally you want
3:41to see price retrace to equilibrium and
3:44so when it retraces to equilibrium
3:45roughly about 50% let's go ahead and use
3:47this fibal to go ahead and mark up where
3:49equilibrium is or the halfway point of
3:52this whole push-up higher you would mark
3:54it up from high to low and then you
3:55would expect price to at least get to a
3:58premium price this one failed but this
3:59is where you would expect price to get
4:01to a premium price this is consolidation
4:03so whenever price is consolidating you
4:05don't expect it to get to 50% it's just
4:07an accumulation of orders where it is
4:09but when price is retracing you want to
4:11see at least some kind of trade back
4:14down into a discounted price and it's
4:16the same thing here you want to see the
4:17exact same thing so from this very
4:18highest point which is when I'm marking
4:20up right here and I'm marking up this
4:22low this low right there you want to see
4:24price drop into a discounted price so
4:27when it runs Above This high again that
4:29means all of this is premium action it's
4:31at premium and then you want to see it
4:33drop down into a discounted price before
4:36it rises again they F to get back above
4:38the high and it crashed beneath these
4:39lows now your at discounted price then
4:43you'd want to see price get up into a
4:45premium price and I know I've marked up
4:47from this high to this low ideally it's
4:50this High to this low as our range this
4:52is our low this is our high we dropped
4:54beneath this low beneath this low so now
4:57Euro USD is at a discounted price you
4:59would anticipate a move back higher into
5:02at least an equilibrium ideally into a
5:05premium price before price drops so from
5:08the highest point to this point here the
5:10lowest point let's go ahead and mark up
5:11you can see price trades beyond beyond
5:15this level here it trades beyond all of
5:17this it trades Beyond equilibrium which
5:20is 50% up into a premium price which is
5:23all of this action up into here this
5:25also helps with directional bias because
5:27if you see price trading at a discount
5:29counted price you can't be looking to
5:31hold those cells for too long price will
5:34often time turn around back up into a
5:36premium price before looking to go short
5:39again and so this is exactly what it's
5:41done so you need to understand in which
5:43way the direction price is going so for
5:45example Euro USD is currently selling
5:47off we've traded beneath this low we've
5:50retraced up into a premium and we traded
5:51beneath a low again it's at a discounted
5:54price so you're expecting a retracement
5:57and then once it gets into a point where
5:59it's at equilibrium or higher this is
6:01when you can start to expect price to
6:03turn around so let's go ahead and move
6:05it to the most recent one now because we
6:07traded beneath this low we have our new
6:09Range now which is this high and
6:12potentially this low so now we're going
6:14to go ahead and mark up where our
6:15equilibrium is so you can see right now
6:17let's go ahead and mark up so it's nice
6:19and neat right here you can see we've
6:21traded up into equilibrium this is good
6:24this is where you want to see it retrace
6:26to minimum if it's not accumulating if
6:29it's not consolidating if it's retracing
6:32like it is now this is a retracement
6:35it's like an accumulation higher that's
6:37just basically retracement is an
6:38accumulation higher in a Cell so now
6:41there's a few more things you can add
6:42onto this to understand that price is
6:45going to be going in a certain direction
6:46one thing you can look at is looking at
6:48where the large plays are so for example
6:51the large plays would be a big pushup up
6:53higher you get a small little selloff
6:55large push-up higher and a small little
6:57sell off here to here that's a big buy
7:00buying action and we have small selling
7:02action once again we have big buying
7:04action and we have small selling action
7:06again so want all of this big buy plays
7:08this is how you know price is bullish
7:10until it runs the low and then we start
7:12getting larger sell candles this High to
7:15this low large sell candle now so in
7:17other words where you're seeing the
7:18large plays is where most likely price
7:20is going to go to so look at this again
7:22large play to the downside massive play
7:24to the downside again so you're seeing
7:26all these different large plays to the
7:28downside this is a another last play
7:30forgot to mention this one but you can
7:31see there's little Interruption there's
7:32a little bu candle in here but really
7:34and truly it's just one play to the
7:36downside so now you get large plays to
7:38the downside so it's telling me that
7:40that price wants to drop off so that's
7:42another thing you can use you can look
7:43at these large plays where are the large
7:45plays in the market you can even use
7:47your ruler tool from the low to the high
7:49you can see 193 Pips and this
7:52retracement or consolidation was 92 Pips
7:55once again let's go again from the low
7:56to the high 185 Pips
7:59that's about 250 Pips when it comes to
8:02retracement the retracement if that was
8:03250 the retracement was 160 that's
8:06smaller again then we get another
8:08massive move to the downside 283 Pips
8:11this should also help you to know where
8:13price is going so for me then I'm
8:15looking at Price dropping off selling
8:18off because the large plays are to the
8:20downside another thing you can use to
8:23help you with the directional bias is
8:25institutional order flow institutional
8:27order flow is all about in which way the
8:29banks are buying or selling if you're
8:31bullish whenever price drops into a sell
8:34candle you want to see some kind of
8:35buying so for example this is a sell
8:37candle a whole sell play down here I'm
8:40going to go ahead and mark up the open
8:42until the wick high and then I'm going
8:43to expand it out to the right and
8:44whenever price drops into the high to
8:47the open or into the sell candle really
8:49then you want to see buying and once
8:51again you see another sell candle in
8:53here I want to mark up the very highest
8:54point to the lowest point B it out to
8:56the right now you can see whenever price
8:58drops into a sell candle I want to see
9:00buying and obviously this one failed to
9:03get to this high so this here was
9:05telling us that institutional order flow
9:06was to the upside but then price fa to
9:09get above this high and when it fa to
9:10get above this high that means then
9:12we're going to start to see we have
9:13institutional order flow switching too
9:15and so all that literally means is
9:17whenever price gets up into a buy candle
9:20you want to see selling this a whole
9:22massive buy candle up to the upside so
9:24this whole candle here is a massive up
9:26close candle so when price comes back up
9:28into the buy candle you want to see
9:31selling and all I've done now I've
9:32marked up this whole buy candle you
9:34don't necessarily want to see price
9:35close be closing above the 50% Mark of
9:38this whole upward play eventually after
9:41price closed beneath this low it then
9:43retraced up into it and then it dropped
9:45off and then we can do the exact same
9:47thing here look at this again another
9:48play to the upside from the low to the
9:50high and then when price gets up into it
9:53again so let's delete this one for now
9:55your USD traded up higher when it was at
9:57a discounted price came up into to this
9:59whole buy play Whenever price moves up
10:02higher into these buy plays here you're
10:05seeing that drop off and this is the
10:07beginning of this drop off price has
10:09ried up higher back up into this area
10:11here and we're potentially dropping off
10:14and going for the downside you can
10:16utilize all of those things to
10:18understand the directional price and one
10:20other thing we can use to understand
10:22directional Buys in other words Which
10:24Way price is going is looking at
10:26short-term highs and short-term lows
10:29this is going to be something we cover
10:30deeper later on in the program but for
10:32now I'm going to give you guys a quick
10:34brief example of how to use the
10:36short-term highs and short-term lows
10:38Concepts to know where price is going to
10:39go this Candlestick here this high is a
10:42high between two lower highs so in other
10:45words this Candlestick right here the
10:47candlesticks beside it both of them are
10:49lower than this one it's a high between
10:51two lower highs this low here is a
10:55short-term low so that's a short-term
10:57high this is a short-term low a
10:58short-term low is a low between two
11:01higher lows when price trades through a
11:04shortterm high this is often a sign that
11:07price wants to either retrace back up
11:09into the range or go up and make new
11:12highs there was a short-term High here
11:13what happened price ried above the high
11:16and then we contined to push up higher
11:18there was another short-term High here
11:20price ried above the high and we
11:22continued to push up higher and each
11:24time whenever price did this price did
11:26not run through a short-term low why
11:28because these lows being protected so
11:30there's a short-term low right here a
11:32low between two higher lows there's
11:33another one here a low between two
11:35higher lows and we have another one
11:37right here a low between two higher lows
11:39so these lows are being protected and
11:41Highs are being violated this is a sign
11:43that price is pushing higher so that
11:45just literally means then you can then
11:47further Target these highs Target all
11:50these different highs along the way
11:52because price is pushing up higher on
11:53the flip side you have a short-term low
11:55so this is a short-term high you can see
11:57price do not run above the high but we
11:59have short-term lows this is a shortterm
12:02low it's a low between two higher lows
12:05along the whole push-up price did not
12:07violate any one of these laws until when
12:10this happened right here we violated
12:12this low and then this was our early
12:15sign that price was going to turn around
12:18and then eventually we got down to these
12:19lows where we were violating more
12:20short-term lows and we violated the main
12:23one which is beneath this low right here
12:25when price violates these short-term
12:27lows often times it will do it with a
12:29larger Candlestick and when it does with
12:31a larger Candlestick they will normally
12:33leave an error of inefficiency which is
12:36also going to be something we talk about
12:37later on in the program which is going
12:40to help you guys with your directional
12:41buyers so these areas of inefficiency
12:43from this low to this candle sticks High
12:46there's uneven trading that's what an
12:48inefficiency is some people know it as a
12:49fair value Gap as well or an imbalance
12:52and then when you extend it out to the
12:53right you can see when price gets to it
12:55we see that drop off price drops off and
12:58once again look when it runs out these
13:00short-term lows often times they do it
13:02with a larger Candlestick and often
13:04times they'll leave an area of
13:06inefficiency where there uneven trading
13:08once again we're going to go ahead and
13:09Mark that up as well from this low to
13:11this high and we expend it out to the
13:13right and you can see price then rallies
13:15up into it and it drops off and then one
13:17more time look at this guys once again
13:19look at another inefficiency here when
13:21it runs out this short-term low here a
13:23low between two higher lows I'm to mark
13:25up the inefficiency over here we trade
13:28beneath the low but then the key thing
13:30here is what does price do when it gets
13:33to this level are we going to drop off
13:34for continuation or are we going to
13:37close above this area here of the
13:39imbalance which means we're going to
13:41retrace back up into the range

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