Liquidity + DRT = PROFIT (This actually works) — Transcript

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1. 0:00So, one of the things I get asked all
2. 0:01the time is how do I keep my trading as
3. 0:04simple as possible and is it possible to
4. 0:07just use one time frame to look for
5. 0:09entries and exits? And the truth is,
6. 0:11yes, absolutely you can. To do this, you
7. 0:13need to understand the two important
8. 0:16concepts. Number one, liquidity, and
9. 0:18number two, dealing range theory. If
10. 0:21you're new here, my name's Ali Khan and
11. 0:23I've been trading for around 10 years
12. 0:25and eight of those years I spent
13. 0:26learning and dissecting algorithmic
14. 0:28price action, ICT smart money concepts,
15. 0:31and I developed something known as
16. 0:32dealing range theory. And now, I'm
17. 0:34teaching it publicly. Now, I'm going to
18. 0:36quickly go over this example. I actually
19. 0:38took a trade this morning as well on
20. 0:40Euro, so I'm going to break that down.
21. 0:41But first, I'm just going to show you a
22. 0:43quick clip that I posted on my Instagram
23. 0:45story explaining my thought process
24. 0:47before the fact. Just on the charts
25. 0:49looking at the dollar index at the
26. 0:51moment. Can see these two equal highs
27. 0:54over here and then we have two equal
28. 0:57highs over here as well. Um price is
29. 1:00currently reacting from that 50 DRT
30. 1:02level and you can see the inversion cut
31. 1:04there. So, I'm looking for price to run
32. 1:06higher to read the buy side liquidity
33. 1:09above the dealing range high. Now,
34. 1:11obviously, in that video, I'm explaining
35. 1:14what's happening here in the New York
36. 1:15session between 7:00 and 10:00. What I
37. 1:18want to first do is is I want to look
38. 1:21and observe what actually transpired in
39. 1:23price. So, essentially, I can clearly
40. 1:26see here that we have equal highs above
41. 1:28the market. Automatically, my eyes are
42. 1:31going to go to this as a potential draw
43. 1:33on liquidity. Now, the lowest low inside
44. 1:36of all of this range occurred here in
45. 1:38the London session. Now, prior to these
46. 1:40highs and lows forming, we can see that
47. 1:43we had the Asian range high here. This
48. 1:46is a key liquidity pool because it's
49. 1:48inside of the Asian session
50. 1:50and we have the Asian low down here at
51. 1:538:00. Now, in the New York session, I've
52. 1:56got the benefit of looking at what
53. 1:58transpired in London and it allows me
54. 2:01to, number one, see what price has
55. 2:03already done, where it's already
56. 2:05visited, and number two, where it's
57. 2:07likely to visit next. Now, I'm just
58. 2:09going to remove all of this and the
59. 2:11first thing that I'm going to look at is
60. 2:13what happened inside of London. Where is
61. 2:15the London key liquidity high and low?
62. 2:18And we can see that. This is London's
63. 2:20high and we can see that this is
64. 2:22London's low. Now, this low here was
65. 2:25going to be our new dealing range low.
66. 2:27Why? Because we raided sell side of the
67. 2:31Asian liquidity and also this small
68. 2:33short-term low down here. It's also
69. 2:35worth noting that this low down here we
70. 2:38didn't actually close below it. So,
71. 2:40that's one clue that first the market is
72. 2:42going to turn around and we obviously
73. 2:45see that transpire throughout the rest
74. 2:46of the London session. Now, the parent
75. 2:49dealing range high is going to be these
76. 2:52equal highs up here. But, I'm more
77. 2:53interested in the London dealing range.
78. 2:56So, from the London's high and the
79. 2:57London's low. Now, what this allows me
80. 2:59to do is to mark my dealing range levels
81. 3:02or my DRT levels, right? For those
82. 3:04familiar with dealing range theory,
83. 3:06these relative equal highs up here, we
84. 3:08can class this as a type two dealing
85. 3:10range. Now,
86. 3:11I'm just enlarging this a little bit and
87. 3:14let's see what actually happened. After
88. 3:16we made the low in London, and again, if
89. 3:18you're familiar with my work between
90. 3:203:00 and 4:00 is where we anticipate a
91. 3:23turn and this came in at 10 minutes past
92. 3:263:00, so within that 3:00 macro. We then
93. 3:30see the market reprice higher. The first
94. 3:32thing that I'm looking for is do we have
95. 3:34the legs to close back above the 25 DRT
96. 3:36level? And we see that here, right? And
97. 3:39do we have the legs to get up to the 50
98. 3:41DRT level? And we also see that. Now,
99. 3:44the market obviously doesn't close
100. 3:45through that 50 level over here. We drop
101. 3:48back down and we start consolidating
102. 3:50around that 25 level. And then we see
103. 3:52the market displaces higher. Notice at
104. 3:55that 50 DRT level we leave this fair
105. 3:58value gap, right? The market then drops
106. 4:01into the consequent encroachment. It
107. 4:03nails it, overlapping with the 50 DRT
108. 4:05level, and then we make a run for the
109. 4:07highs. Now notice this is outside of the
110. 4:11London session, and we don't take the
111. 4:13initial high here. So the market goes
112. 4:16into a holding pattern. This is time
113. 4:18distortion between kill zones. Then at
114. 4:217:00 the macros kick back in, and we see
115. 4:24this movement lower, completely
116. 4:27balancing this fair value gap. Now if we
117. 4:30look left, we also have
118. 4:33a fair value gap here, right? This area
119. 4:36is balanced. And notice the bodies of
120. 4:38the candles here, they do not close
121. 4:41below the consequent encroachment of
122. 4:43this sell-side imbalance. When I'm
123. 4:46bullish, I want to see the bottom half
124. 4:48stay open whenever I see anything like a
125. 4:50balanced price range or an inversion
126. 4:52fair value gap in this case, right? And
127. 4:54then what happens? And then we see the
128. 4:56market turn around and run and close
129. 4:59through again the 50 DRT level and this
130. 5:03buy-side imbalance. We then drop, nail
131. 5:07that 50 DRT level right there, and then
132. 5:09we run higher. Again, stay inside of
133. 5:12this pocket. What's happening here?
134. 5:14We're building layered buy-side
135. 5:16liquidity, right? Now above that 50
136. 5:19level, we also have
137. 5:22this small fair value gap here, this
138. 5:24sell-side imbalance. Now notice what
139. 5:27happens here. This is the beginning of
140. 5:29the New York session here at 7:00 a.m.,
141. 5:30right? We drop lower and we clear
142. 5:33sell-side and balance this area of
143. 5:36price, and then the market turns around
144. 5:38and it goes back through this sell-side
145. 5:41imbalance. This becomes an inversion
146. 5:43fair value gap, right? Look Look the
147. 5:45bodies there. They're telling the story
148. 5:48that the market doesn't want to drop any
149. 5:50lower and then we nail the 50 level and
150. 5:52run higher. And then we drop back down
151. 5:56and again nail the premium high of that
152. 5:58inversion fair value gap. Inside of that
153. 6:01inversion fair value gap, you see this
154. 6:03down close candle. This is our high
155. 6:05probability order block. Now, what time
156. 6:09does this occur?
157. 6:11Between 8:50
158. 6:14and 10 past 9:00, we have a macro that
159. 6:17forms.
160. 6:18Where's it going to reprice to?
161. 6:21Higher to all that buy side liquidity
162. 6:24that was engineered between London and
163. 6:26New York and then ultimately the parent
164. 6:30dealing range high in the form of the
165. 6:31equal highs up here. I'm just going to
166. 6:34show you here a screenshot of the
167. 6:35entries that I took on Euro.
168. 6:38But I was actually watching the dollar
169. 6:40index and basing my entries of what I
170. 6:42was seeing unfold here in price because
171. 6:44for me this was much cleaner price
172. 6:46action. And essentially what I was
173. 6:48aiming for was
174. 6:49these relative equal lows down here and
175. 6:52the relative equal lows down here. So
176. 6:54this would have been our dealing range
177. 6:56low. Now, because we had this huge move
178. 6:59here
179. 7:00and this was basically when Trump
180. 7:02tweeted about the Iran war.
181. 7:05Now, I ended up closing this trade
182. 7:06manually over here. I still think that
183. 7:09we're going to come down and fill in
184. 7:10some of this but because we're inside of
185. 7:13all of this consolidation right now, I
186. 7:14didn't want to really overstay my
187. 7:15welcome and you can see how we really
188. 7:17traveled back higher. And this is
189. 7:19another entry here inside of the London
190. 7:21session. Sorry, London close. And you
191. 7:24can see how like the market's now
192. 7:25turning around as well.
193. 7:27And that's coming in again 10:50
194. 7:30to 11:10. So you're going to get another
195. 7:32macro that forms here inside of the
196. 7:35London close session. If you see where
197. 7:37we currently are right now in price, if
198. 7:39we drop down to the 1-minute time frame
199. 7:41here.
200. 7:42Because this model is so universal, it
201. 7:45can be applied on any time frame because
202. 7:47price is fractal. Here we again we have
203. 7:49equal highs. This is our again another
204. 7:51type two dealing range.
205. 7:53And we take the high to the low, and you
206. 7:55can see right there that 25 DRT level.
207. 7:57I'm going to make this
208. 7:59uh a little bit thicker.
209. 8:02You can see from again from the high to
210. 8:03the low at the 25 DRT level, what do we
211. 8:05have?
212. 8:07We've got this suspension block, and the
213. 8:09consequent encroachment of that block
214. 8:11also overlaps with the 25 DRT level.
215. 8:13There's another entry. Now, there's
216. 8:15another macro at the 30-minute mark that
217. 8:18will spool price and run through to the
218. 8:21London session. So, I suspect these
219. 8:23highs will be attacked next. But, if
220. 8:25you're looking for a really simple easy
221. 8:27model based on one time frame and
222. 8:29looking for only a few little moving
223. 8:32parts, then it doesn't come really
224. 8:34better than dealing range theory and
225. 8:35understanding liquidity concepts. You
226. 8:37don't need all the higher time frame
227. 8:40arrays, the blocks, the order blocks,
228. 8:42the breakers, all that kind of stuff. It
229. 8:44is good to obviously have knowledge on
230. 8:46that. And throughout the rest of the
231. 8:47year on this YouTube channel, I'm going
232. 8:48to be giving you a whole lot more detail
233. 8:50and insights on those specific things
234. 8:52anyway. But, my real goal here is just
235. 8:54for everyday people who can really
236. 8:56understand higher levels of algorithmic
237. 8:59price action, but very, very simplified.
238. 9:02And this is what I intend to do with
239. 9:03dealing range theory and why it was
240. 9:05created in the first place. So, if you
241. 9:08want more videos like this and you want
242. 9:10me to continue doing this kind of stuff,
243. 9:11then please like, subscribe, and hit
244. 9:14that notification bell so you don't miss
245. 9:15any future stuff. I hope you found this
246. 9:17one insightful. Thank you for watching,
247. 9:19and I'll catch you in the next video.
248. 9:21So, I came to edit this and thought I'd
249. 9:23just do a quick update and
250. 9:25uh show you exactly how we ended up
251. 9:28raiding the equal highs in that type two
252. 9:30dealing range high and how we utilize
253. 9:32the DRT levels coupled with inversion
254. 9:36fair value gap. So, we had the
255. 9:37suspension block here on the 25 DRT.
256. 9:40Price traveled through it all the way
257. 9:41into this buy side imbalance over here.
258. 9:44Again, showing a willingness to to move
259. 9:46higher. It wasn't quite ready to read
260. 9:48the highs up here and then retrace back
261. 9:51into the 50 DRT level coupled with the
262. 9:54inversion fair value gap here. And then
263. 9:56hovered between the 50 and the 75. So,
264. 9:59we just touched it right there. And then
265. 10:01retraced into two down close candles
266. 10:04here. Nested at that 50 DRT. And note at
267. 10:08what time this reaction comes in. So, we
268. 10:11have 12:50.
269. 10:13And then we have
270. 10:1510 right over here. And you can see the
271. 10:19subsequent reaction at that macro time.
272. 10:22So,
273. 10:23we can utilize these DRT levels with
274. 10:26time, liquidity, and inefficiencies. And
275. 10:29this gives you a real x-ray vision of
276. 10:31what the market is actually doing
277. 10:33without having to overcomplicate
278. 10:35everything. And this works across all
279. 10:37asset classes from all time frames. This
280. 10:39is very much a universal model. And the
281. 10:41precision that you can see is always
282. 10:43quite staggering. So, the more you study
283. 10:45this and the more you research it, the
284. 10:46better you will get at identifying how
285. 10:49these dealing ranges form, how to plot
286. 10:51the dealing ranges, and where high
287. 10:53probability setups are going to form in
288. 10:56relation to time inside of these dealing
289. 10:58ranges as well. So, that was just a
290. 11:00quick bonus for you there. Anyway, I'll
291. 11:03catch you soon.