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YouTube transcript (oALYX0HCSYw) — Transcript

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0:32okay folks welcome back
0:34this is
0:36teaching 3.3
0:38dealing specifically with rejection
0:40blocks
0:44okay let me ask you a question real
0:45quick
0:48what do you see in this chart
0:50at major highs and lows
0:53now take a moment pause the video here
1:02okay
1:05you may have noticed
1:08these old highs being violated and a
1:11significant movement away from that
1:15and we understand this as a turtle soup
1:18or a false breakout it's important to
1:19understand that it's probably easy for
1:21you
1:22to see these in hindsight when i pick
1:24them out on the chart but you probably
1:26don't always you probably don't have
1:28that much
1:30experience seeing them
1:32come to fruition beforehand
1:35so in other words you don't see them
1:36forming in advance
1:38and it's because you haven't spent
1:40enough time going through the charts
1:41seeing how they form
1:43over and over and over again now
1:44obviously you may not have noticed these
1:46and i'm pointing them out to you here
1:48but for some of you that have been
1:50working with my content
1:52maybe you've seen other ones
1:56but these two here
1:59are the two majors
2:00okay so you have two major false breaks
2:03above and on high a nice false swing
2:05above
2:06a previous high and then a rejection and
2:09a subsequent significant price swing
2:11lower
2:12and we have false break below an old low
2:15and we have a nice significant price
2:16rally higher let's take a closer look
2:18now
2:19we have a old low here that's been
2:22violated
2:24so the cell stops below that low has
2:26been ran out
2:28so we would expect repricing on the
2:29upside looking for buy side liquidity
2:34the market trades above an old
2:35short-term high here
2:37pairing up the buys from the previous
2:39low
2:40with buy stops they can sell to with a
2:43movement above a previous high
2:46each one of these is a
2:48turtle soup
2:49the first being a turtle soup long
2:52the second being a turtle soup a cell
2:57down here we have an old load that's
2:58violated where cell stops have been ran
3:01out
3:04we have an ola over here
3:06where cell stops have been ran out
3:11we have an old high here
3:13where pi stops have been ran out
3:16so
3:17you can see significant price swings
3:19at looking at the daily chart like this
3:21and it gives you a great deal of
3:24prognostication when you anticipate
3:26every time a new high or low is formed
3:29we expect some measure of rejection
3:32that's the first anticipatory price
3:33skill set you should be working towards
3:35developing because it's the hardest
3:37one to groom
3:39in your
3:40trade psychology
3:41some of you probably understand that
3:43higher high failure swing and lower low
3:46various swing
3:47or turtle suit long and total sleep by
3:50some of you probably aren't aware that
3:52there are other
3:54distribution and accumulation patterns
3:56that take place
3:57at highs and lows let's take a look at
4:00that now
4:06okay we're gonna look at a bearish run
4:08on buy side liquidity or a turtle soup
4:10cell
4:15now obviously when you look at this
4:16price action here
4:17it should be pretty obvious after
4:19studying my material
4:21we have equal highs that's been ran out
4:23so there's buy stops above those equal
4:25highs in there have been ran out here we
4:28would reasonably expect to see what form
4:31a sweep through
4:33and a potential rejection and trade
4:35lower
4:37and that's what you would see here as an
4:38example
4:40now some of you probably can see this
4:42relatively easy
4:44in the chart formations and how a
4:47previous high or previous low has been
4:48violated in a subsequent rejection
4:51and a retracement of a longer magnitude
4:56but i want to teach you tonight
4:57a different approach to looking at
4:59distribution and accumulation
5:04okay look at this pattern here
5:08okay we're going to talk about a bearish
5:09rejection block
5:11and
5:12before we get into it
5:14the ideal setups are found in major to
5:16intermediate term downtrends
5:18and the bearish
5:20rejection block is when a price high has
5:22formed
5:23with long wicks on the high or highs it
5:25can be more than one candle that forms a
5:27high
5:28of the candle stick or sticks
5:31and price reaches up above the body of
5:33the candle
5:34or candles
5:36to run the buy side liquidity out before
5:38the price declines
5:41as you can see
5:43there are
5:44several wicks here forming
5:47potential resistance
5:49now a classic chartist would look at
5:51this as a potential continuation pattern
5:53in the form of a bull flag
5:56we talked earlier in this mentorship the
5:58falsehoods that come along with some of
6:00the classical chart patterns
6:02price does not move around because of
6:04animal patterns or supposed geometry in
6:07in price action it's based on the orders
6:10okay and
6:11looking at this price action here
6:14if this is near a overall longer term
6:16resistance level or trading into a
6:18bearish order block
6:20or an old load that may not be seen in
6:22this sample size of data
6:24but you can see prices ran up higher
6:27for a good number of candles
6:30then it starts moving into a small
6:32consolidation
6:33but more importantly i want you to look
6:34real close
6:37is there a strong likelihood that this
6:39is going to go higher
6:41based on a continuation pattern of like
6:42a bull flag or a pennant
6:44or
6:45is it showing underlying distribution
6:52notice there's no higher high here
6:56or is there
7:01take notice of the highest body
7:05in this formation and the most recent
7:07candle that traded through it
7:13price pushes above
7:15the previous highest candles body
7:21seen right here
7:23that run above the highest body's candle
7:27produces the distribution
7:29seen
7:30in the chart here
7:32price does not need to make a higher
7:34high
7:35to have a failure swing
7:37by looking at the bodies of the candle
7:39which is one of the first things i
7:40taught when i started teaching online
7:42how the foreign exchange market operates
7:45you don't need
7:47to have
7:48a great deal understanding about
7:49candlesticks except for
7:51understanding where the open high loan
7:53closes
7:54and if you follow
7:56every swing high and low and you chart
7:58the open high low and close and you deal
8:00specifically with the opens and closes
8:02you'll be able to fare it out what
8:04distribution and accumulation takes
8:06place at these turning points
8:08as you can see
8:10the real pattern here is from this
8:12previous highest bodied candle
8:15then the subsequent later
8:17higher drive higher this candle here
8:20prior to this candle moving up
8:23this candle was the highest
8:25body candle we're not paying so much
8:27attention to the wick the wicks
8:28highlight the idea of this pattern
8:30forming
8:31this pattern here shooting above this
8:33previous
8:34body or previous close is the highest
8:36close
8:38or highest open
8:39in this swing high this candle here
8:42drives above it
8:43clearing out the buy side liquidity
8:46and then rejection
8:52basically what we're seeing is
8:54distribution
8:58so what is it
8:59really to see a rejection block and what
9:01does it look like
9:03i have a crew depiction here with a
9:05single wicked candle now this is going
9:08to be
9:11better understood
9:13when there is multiple candles
9:15that form the high and multiple wicks
9:18you're still looking at the highest
9:20close or high
9:23you're still looking for the highest
9:25open or close inside the swing high that
9:28forms
9:29the wicks are just drawing your
9:30attention to a potential rejection block
9:34when you see the wick
9:36you have to build the parameters for the
9:38rejection block by finding the highest
9:40high
9:41and
9:42the highest open or close in the swing
9:45high
9:47it does not matter if the highest candle
9:50is a bearish or bullish closed candle
9:53you're still looking for the highest
9:54high
9:56with the highest open or closing price
9:59into the highest wick
10:01that frames the rejection block so once
10:04we have the rejection block defined
10:08by the highest wicks
10:09high
10:11and the highest open or close
10:14in the swing high
10:16that frames the rejection block
10:19and in your mind you should be viewing
10:21it like we have here
10:23a candle all and of itself
10:28this range
10:30is going to be a selling
10:33block
10:34in other words
10:35we treat this as a bearish order block
10:39when price trades back up to the low
10:41of that range
10:43that is your trigger
10:45now you can do one of two things one
10:47if you're aggressive you can sell at
10:49that price
10:50and put a significant stop loss above
10:52that
10:53particular price level
10:55or you can wait for the trade through it
10:57a little bit
10:58and i'll leave that up to you in terms
11:00of
11:01all the additional insights that we'll
11:03be sharing over the mentorship about
11:04entry patterns
11:06or
11:07you can wait for it to trade above that
11:09level
11:10and if it moves significant amount above
11:12that
11:14highest open or close in this case is
11:16the highest close or that bullish green
11:18candle
11:19if it trades above that particular
11:22level and it does not trade to a higher
11:26wick
11:26high you could be a seller on a stop
11:31below that level
11:33so that way you can be selling on
11:34weakness
11:35this is one of the few times i use
11:37selling on a stop as an entry pattern
11:45what it looks like in the charts
11:47here's one example here
11:49we have a candle with a wick
11:52we use the highest body
11:55reference point being open or closed in
11:57this case it's going to be the open
12:00and price trades above it just a little
12:01bit
12:02violates that doesn't make a new hire
12:04high
12:05and it makes it run eventually for the
12:07sell side liquidity below the
12:08marketplace there
12:13so rejection block for the bullish side
12:16of the marketplace
12:17is obviously
12:19in ideal scenarios it's in major
12:21intermediate term uptrends
12:23and a bullish rejection block is when a
12:25price low has formed with a long wick or
12:28wicks it could be formed over multiple
12:30candles
12:31and the low or lows of the candle stick
12:34or candle sticks again it's not limited
12:36to just one candle
12:38and price reaches down below the body of
12:40the candle
12:41to run the sell side liquidity out
12:43before price rallies higher
12:47again we frame the rejection order block
12:50in this case the bullish rejection order
12:51block
12:53it's going to be the lowest wick
12:55low
12:56and the lowest open or the lowest close
12:59that makes that swing low
13:01on the time frame you're looking for the
13:03pattern
13:05once you identify that you have framed
13:07the bullish rejection block
13:11and we treat this as like a bullish
13:12order block
13:15when price trades back down into the
13:17high of the block
13:19we can be a buyer
13:22just below it
13:23or we can wait for price to trade
13:25through if it's a little bit longer term
13:27time frame uh we wait for it to trade
13:29through it by a little bit and then we
13:30can be a buyer i want to stop just above
13:33that particular level here
13:36again the trigger is that high
13:38or the lowest open or the lowest close
13:41in that swing low but the key is it has
13:44to be a swing low that has a wick or
13:46wicks
13:50in price action this is what it looks
13:51like
13:54price makes a previous low with wicks
13:56mark comes down trades down just below
13:58the bodies of the candle
14:00and then we see a strong rejection
14:01because of a massive accumulation that
14:04comes in it's not always required to see
14:05a higher high for a failure swing
14:08which would be a turtle soup cell
14:10or
14:11requiring always a lower low for a
14:14rejection for a turtle sheep long
14:16we can anticipate
14:18levels like this to be taking profits at
14:21if we're short in this case
14:23if the market had been trading in our
14:25favor on another type of setup
14:27we could look at the take profit
14:29objectives to be covering the short just
14:31below
14:32the lowest open or close in the previous
14:35swing low
14:36don't always demand that price gets
14:38below the wicks
14:39it's really the bodies of the candle
14:42that the closest thing to institutional
14:44understanding you're going to get
14:47when you're using retail price delivery
14:49mechanisms like
14:51the platforms we have to trade through
14:53from retail perspective hopefully this
14:55has been insightful we're going to have
14:56a lot more information as we go along
14:58and we start talking about specific
14:59entry techniques
15:01we'll be revisiting all these things as
15:03well and amplifying them
15:04but i want you to go through your charts
15:06and look for examples of rejection
15:09blocks in their subsequent price moves
15:11after their formation till next time
15:12wish you good luck and good trading

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