Supply Demand FLIPS🔥 | Smart Money Concepts | SMC | Episode - 8 | Flip Patterns | ICT — Transcript

Full transcript

1. 0:05hello Traders welcome to yet another
2. 0:07episode of the free spart money Concepts
3. 0:10course in this episode we will learn an
4. 0:12advanced tutorial on a rather
5. 0:15interesting spart money concept which is
6. 0:17regarding the identification and
7. 0:19utilization of flip patterns and flip
8. 0:21zones so in this video I will talk about
9. 0:24flip zones the different types of flip
10. 0:27entry models and I will also give you
11. 0:29the important rules to identify and Mark
12. 0:32valid flip zones these are powerful
13. 0:34Concepts in smart money strategies and
14. 0:36neglecting them in your trading may
15. 0:38leave you lagging behind the changing
16. 0:40market trends so by understanding and
17. 0:42utilizing these essential techniques
18. 0:45you'll gain the adequate expertise to
19. 0:47identify high probability flip setups
20. 0:50and you will also be able to make
21. 0:51well-informed trading decisions so if
22. 0:54these series of videos are useful for
23. 0:56you then give this video a thumbs up to
24. 0:58show your support and make sure to
25. 1:00subscribe to our Channel and also enable
26. 1:02the Bell notification to get all the
27. 1:04latest updates so without wasting any
28. 1:06time let's get started as the name
29. 1:09suggest the term flip in the flip
30. 1:11pattern indicates a market transition
31. 1:14from one direction to the other thereby
32. 1:16implying a change in the market
33. 1:17sentiment this could be a shift from
34. 1:20bullish to bearish or vice versa flips
35. 1:22are often viewed as crucial turning
36. 1:24points or areas where the Traders have
37. 1:27potential opportunities to capitalize on
38. 1:29the changing Market market dynamics the
39. 1:31flip trading entries are considered as
40. 1:33an effective method to enter quickly
41. 1:35during Market declines or surges so how
42. 1:38can you define a flip pattern you can
43. 1:41think of a flip pattern as a particular
44. 1:43price pattern or configuration on the
45. 1:45price chart that indicates a potential
46. 1:48shift or flip in the market Direction
47. 1:51flips signal a transition from an
48. 1:53existing Trend to a possible reversal or
49. 1:56it indicates a shift in the market
50. 1:58sentiment so the overall idea of a flip
51. 2:00pattern is simple a flip pattern
52. 2:03involves reacting to a significant Price
53. 2:05Zone in the chart and then effectively
54. 2:07breaking through it these significant
55. 2:09price zones could be support or demand
56. 2:11areas order blocks gaps important highs
57. 2:14or lows Etc now the flip patterns are
58. 2:17majorly divided into two main categories
59. 2:20these are reversal flip patterns and
60. 2:23continuation flip patterns we will talk
61. 2:25in detail about each one of them first
62. 2:28let us look at how we can spot a
63. 2:30reversal flip pattern let's imagine a
64. 2:33bullish Market structure with a
65. 2:34consistent formation of higher highs and
66. 2:37higher lows in prices to identify a
67. 2:39valid flip pattern we have to consider a
68. 2:42few key criteria first of all the price
69. 2:45should face a rejection from a higher
70. 2:47time frame Supply zone so when you mark
71. 2:49the structure on higher time frames like
72. 2:511 day or 1 hour or any higher time frame
73. 2:54based on your trading style you'll be
74. 2:56able to identify such price zones where
75. 2:58we can expect the price price to face
76. 3:00some resistance these could be major
77. 3:02resistance areas unmitigated higher time
78. 3:05frame bearish order blocks price gaps
79. 3:08daily weekly or monthly highs Etc all
80. 3:11these levels or zones can act as a
81. 3:13supply Zone and reject the prices now
82. 3:16after encountering a resistance at the
83. 3:18supply Zone and declining the price
84. 3:20should retest the last form demand Zone
85. 3:22and then move upwards showing a
86. 3:24rejection from this demand Zone but the
87. 3:27crucial thing to make sure is that the
88. 3:29price should not not establish a new
89. 3:31higher high but instead the price should
90. 3:33break through the previously tested
91. 3:35demand Zone this break of the demand
92. 3:37Zone forms a new Supply Zone which is
93. 3:39referred to as a flip Zone this flip
94. 3:42zone is marked on the basis of an
95. 3:44imbalance formed while breaking through
96. 3:46the demand Zone we will talk about how
97. 3:48to Mark a flip Zone in a short while it
98. 3:50is vital that we closely monitor this
99. 3:52newly formed flip Zone since the
100. 3:55likelihood of price returning back to
101. 3:57retest this zone is very high it is
102. 3:59usually recommended to place a sell
103. 4:01limit order within this Supply flip Zone
104. 4:03to enter into a short trade position
105. 4:05when the price retest the flip Zone the
106. 4:08same principles apply in a bearish
107. 4:10scenario in case if the market is
108. 4:12consistently making lower highs and
109. 4:14lower lows thereby indicating a bearish
110. 4:17market Trend then we will wait for price
111. 4:19to find a support on a higher time frame
112. 4:21demand Zone and then move higher this
113. 4:24devance Zone could be an unmitigated
114. 4:26higher time frame bullish order block a
115. 4:28major support level price gaps daily or
116. 4:31weekly or monthly lows Etc as the price
117. 4:34decline lower it should react with the
118. 4:36last form Supply Zone on the same time
119. 4:39frame that we are analyzing and then
120. 4:41move lower but the crucial part is to
121. 4:43make sure that this price reaction
122. 4:45should not establish a new lower low or
123. 4:48it should not form a bearish breakoff
124. 4:50structure but instead the price should
125. 4:52break through the previously tested
126. 4:54Supply Zone this break of the supply
127. 4:56Zone will form a new demand Zone which
128. 4:59is called our flip Zone marking the flip
129. 5:02zone is based on price imbalance formed
130. 5:04during the supply Zone break we should
131. 5:06closely monitor this flip Zone because
132. 5:08there are high chances that the price
133. 5:10could return back to retest this Zone it
134. 5:12is a usual practice to place a by limit
135. 5:15order within this demand flip zone so as
136. 5:17to enter into a long trade position when
137. 5:20the price retest the flip Zone here I
138. 5:22would like to highlight a key point a
139. 5:25flip pattern wouldn't exist without a
140. 5:27reaction from the last demand or Supply
141. 5:30Zone at least some of you might look at
142. 5:32this and ask me isn't this a change of
143. 5:34character although the flip patterns
144. 5:36share similarity with change of
145. 5:38character pattern not every change of
146. 5:41character is a flip but on the opposite
147. 5:43every flip is a change of character
148. 5:46actually a flip is a specific type of
149. 5:48change in the market dynamics where the
150. 5:50price reverses and establishes a new
151. 5:53structure this pattern as I have already
152. 5:55mentioned is characterized by a clear
153. 5:57rejection from the last Supply or demand
154. 5:59Zone followed by a subsequent break of
155. 6:02that price Zone creating a flip Zone
156. 6:05setting up trades for the flip pattern
157. 6:07is similar to those setups that we have
158. 6:09for a change of character pattern
159. 6:11thereby allowing the use of both
160. 6:12aggressive and conservative entry types
161. 6:14with the flip zones we will not dwell
162. 6:17deep into each of these entry types in
163. 6:19this video we will talk about all the
164. 6:21entry types and risk management
165. 6:23strategies in the next season of smart
166. 6:25money Concepts but now let's briefly
167. 6:28analyze the flip pattern through a
168. 6:30detailed Candlestick analysis and come
169. 6:32up with some rules to identify the best
170. 6:34reversal flip patterns it is observed
171. 6:37that the flip patterns Effectiveness is
172. 6:39greatly enhanced when the price reacts
173. 6:42aggressively and push away from the
174. 6:44demand or Supply Zone and then swiftly
175. 6:46breaking through either the last demand
176. 6:48zone or the last Supply Zone thereby
177. 6:51leaving behind an inefficiency we have
178. 6:53already made a video about
179. 6:55inefficiencies or imbalances or fair
180. 6:58value gaps in this course you can check
181. 7:00it out if you want to know more if you
182. 7:02have spotted an imbalance or
183. 7:04inefficiency in price while breaking the
184. 7:06supply or demand Zone then all you have
185. 7:08to do is to find the extreme candle
186. 7:11formed during the price pullback from
187. 7:12the supply or demand Zone before the
188. 7:15price break through the supply or demand
189. 7:16Zone you can mark the highs and lows of
190. 7:19this candle using a rectangle and this
191. 7:21will be our flip Zone it is even better
192. 7:24if this extreme candle is followed by a
193. 7:26large bodied imbalance candle but just
194. 7:29keep in in mind that the breakout move
195. 7:31should be associated with a price
196. 7:32imbalance we will understand the reason
197. 7:35for this in a short while now it is
198. 7:37crucial to recognize the fact that the
199. 7:39strength of demand or a demand Zone can
200. 7:42be assessed by the level of rejection
201. 7:44that it provides to prices and its
202. 7:46ability to drive price to new higher
203. 7:49highs if the demand associated with the
204. 7:51zone is weak and it fails to generate
205. 7:54substantial momentum and eventually
206. 7:56leading to a break through the Zone then
207. 7:58it signals a shift and control towards
208. 8:00the new Supply zone or we can say that
209. 8:03the beers are gaining dominance so as
210. 8:05SMC Traders we can concentrate on
211. 8:08trading the supply side of Market in
212. 8:10these situations on a similar note the
213. 8:13strength of a supply Zone can be gauged
214. 8:15by the level of Rejection it provides in
215. 8:17pushing the prices to form new lower
216. 8:19lows if Supply turns out to be weak and
217. 8:22it fails to produce substantial price
218. 8:24momentum and thereby eventually leading
219. 8:26to a break through the Zone then it
220. 8:28signals a shift and control towards a
221. 8:30new demand Zone which indicates that the
222. 8:33Bulls are gaining traction so as an SMC
223. 8:36Trader you can focus on trading the
224. 8:38demand side of Market that is look for
225. 8:40long trading setups now let's outline
226. 8:43some rules and other criteria for
227. 8:46identifying valid and high quality flip
228. 8:48patterns and zones in the market I will
229. 8:51discuss four essential rules that you
230. 8:53can follow in order to identify valid
231. 8:55flip patterns and zones with a high
232. 8:57probability of success the first rule
233. 9:00states that for a reversal flip pattern
234. 9:02to be considered valid the price must
235. 9:04first mitigate and reverse from a higher
236. 9:07time frame Supply or demand Zone this
237. 9:09rejection from the higher time frame
238. 9:11Supply or demand Zone indicates the
239. 9:13possibility of a change in the market
240. 9:15sentiment thereby setting the stage for
241. 9:17a potential flip to occur in other words
242. 9:20the price should react from a
243. 9:21significant Supply or demand level
244. 9:24before forming the flip pattern so if
245. 9:26the price fails to mitigate a higher
246. 9:28time frame Supply or demand Zone and
247. 9:30then simply forms a flip pattern it
248. 9:33cannot be considered a valid flip
249. 9:35pattern now let's talk about rule number
250. 9:37two this rule states that for a valid
251. 9:40flip pattern to occur the price must
252. 9:42react from a supply or demand Zone
253. 9:44create a pullback and then break through
254. 9:47the supply or demand Zone without a
255. 9:49pullback or any rejection of price from
256. 9:51the supply or demand Zone the pattern
257. 9:53cannot be considered as a valid flip
258. 9:55pattern moving on to rule number three
259. 9:58this is a very important criteria that
260. 10:00needs to be satisfied it states that a
261. 10:03high quality flip pattern should create
262. 10:06a significant imbalance or inefficiency
263. 10:09when flipping a demand or Supply Zone
264. 10:11this imbalance or inefficiency should be
265. 10:13associated with a clear change of
266. 10:15character or in other words it should
267. 10:17involve a swift powerful price movement
268. 10:20that invalidates the previous Market
269. 10:22sentiment let us understand the reasons
270. 10:25why this is very important imbalance
271. 10:27represents an inefficiency between
272. 10:29buyers and sellers leading to a
273. 10:31disequilibrium in prices that needs to
274. 10:33be filled often imbalances are seen as a
275. 10:36gap within the candles these are also
276. 10:39known as fair value gaps to understand
277. 10:41this better we will consider two
278. 10:43scenarios if a three candle sequence as
279. 10:47shown here lacks gaps between the high
280. 10:49of the first candle and low of the third
281. 10:51candle in case of a bullish scenario and
282. 10:54if a three candle sequence lacks a gap
283. 10:56between the low of the first candle and
284. 10:58high of the thir candle in case of a
285. 11:00bearish scenario then these are examples
286. 11:03of efficiency in the market this means
287. 11:05the price action is balanced and there
288. 11:07is no imbalance or inefficiency that
289. 11:10needs to be filled conversely the
290. 11:12presence of a gap within the first and
291. 11:14the third candle as shown in these
292. 11:16scenarios signifies an inefficiency or
293. 11:19imbalance in prices that need to be
294. 11:21filled in order to balance the price
295. 11:23action or to make the market efficient
296. 11:26therefore the presence of an imbalance
297. 11:28during the Supply or demand Zone break
298. 11:31will increase the probability of the
299. 11:33price returning back to fill this
300. 11:35inefficiency which will in turn improve
301. 11:37the chances of our flip Zone being
302. 11:39tested I hope things are making sense
303. 11:42now the last rule that is Rule Number
304. 11:44Four emphasizes that a valid and high
305. 11:47probability flip Zone must be
306. 11:49unmitigated it means price should not
307. 11:51test our flip zones when moving to break
308. 11:54through the supply or demand zones flip
309. 11:56zones are considered as onetime use
310. 11:58thing just like like orderflow or order
311. 12:00block areas we will focus on only those
312. 12:03trading opportunities when the price
313. 12:05first enters a flip Zone once a flip
314. 12:07Zone has been mitigated meaning the
315. 12:09price has moved Beyond its boundaries
316. 12:11and the inefficiency associated with it
317. 12:14has been filled it will lose its
318. 12:16significance as a trading area and we
319. 12:18will not consider it as an area or price
320. 12:20of interest for our future trades and
321. 12:23subsequent retests of flip Zone may not
322. 12:25offer the same trading opportunities as
323. 12:27the initial trade entry now we can use
324. 12:30aggressive or conservative entries when
325. 12:32trading with the flip setup as I have
326. 12:34mentioned before we will cover different
327. 12:36SMC entries and risk management
328. 12:38strategies in the second season of this
329. 12:40SMC course but to give you a general
330. 12:43idea while trading the reversal flip
331. 12:45setups take a short trade from or within
332. 12:48the supply flip Zone and take a long
333. 12:50trade from or within a demand flip Zone
334. 12:52and price pulls back to fill the
335. 12:54inefficiency formed during the breakout
336. 12:57now that we have extensively disc
337. 12:59discuss the reversal flip pattern let's
338. 13:01explore the specifics of the second flip
339. 13:03pattern type which is the continuation
340. 13:06flip pattern the continuation flip
341. 13:08pattern can be divided into two types it
342. 13:11can be either a supply to demand flip
343. 13:13pattern or a demand to supply flip
344. 13:15pattern let's begin with the supply to
345. 13:17demand flip pattern the supply to demand
346. 13:20flip pattern is a type of continuation
347. 13:22flip pattern that involves a price
348. 13:24transition from a supply Zone to a
349. 13:27demand Zone as the name suggest it
350. 13:29implies a shift from a supply Zone to a
351. 13:31demand Zone this flip pattern indicates
352. 13:34a decrease in the selling pressure and
353. 13:36an increase in the buyer control or
354. 13:38dominance thereby suggesting a potential
355. 13:40continuation of the bullish Trend
356. 13:43Traders sporting this pattern can seek
357. 13:45opportunities to enter long trade
358. 13:47positions as the price reverses from the
359. 13:49supply Zone and move towards a demand
360. 13:52zone now let's look into the scenario in
361. 13:54Greater detail for this let us consider
362. 13:56a bullish Market where the price has
363. 13:58mitigated the extreme demand zone or the
364. 14:01extreme bullish order block and begin to
365. 14:03reverse thereby continuing its upward
366. 14:05movement towards the next unmitigated
367. 14:07higher time frame Supply Zone however in
368. 14:10this scenario an interesting twist
369. 14:11unfolds instead of respecting this
370. 14:14unmitigated Supply Zone and reversing
371. 14:16lower the price sharply surges upwards
372. 14:19breaking through the supply zone so this
373. 14:22break of the supply Zone indicates a
374. 14:24lack of bearish momentum to sustain the
375. 14:26selling pressure it also implies that
376. 14:28the bulls have taken control thereby
377. 14:31suggesting a potential continuation of
378. 14:33the existing bullish Trend this scenario
379. 14:35creates a perfect demand Zone that is
380. 14:38generated by the price wave that flip
381. 14:40the supply zone so the new demand flip
382. 14:42Zone can be marked as the extreme candle
383. 14:45in the price wave that caused the break
384. 14:47above the unmitigated Supply Zone also
385. 14:50keep in mind that here also the price
386. 14:52needs to form an imbalance or
387. 14:54inefficiency during the breakout wave
388. 14:57typically after such a flip patter
389. 14:59pattern formation the price May return
390. 15:00to this flip Zone to mitigate it and
391. 15:03then resume its upward M the reason why
392. 15:06price returns to this flip zone is due
393. 15:08to the imbalance created by prices
394. 15:10during the inefficient breakout move
395. 15:13this is what we call a supply to demand
396. 15:15flip pattern it signals a shift in
397. 15:17market dynamics from selling pressure to
398. 15:19buying pressure presenting a potential
399. 15:21opportunity for Traders to consider
400. 15:24entering into long trade positions
401. 15:26thereby anticipating the continuation of
402. 15:28the bullish Trend similar Concepts apply
403. 15:31to demand to supply flip pattern as well
404. 15:33let's talk about it now in this pattern
405. 15:36the price shift from a demand Zone to a
406. 15:38supply Zone suggesting a decrease in
407. 15:41buying pressure and an increase in the
408. 15:43selling interest thereby indicating a
409. 15:45potential continuation of the prevailing
410. 15:47bearish Trend in this scenario we have a
411. 15:50bearish market where the price enters
412. 15:52the extreme Supply Zone and starts to
413. 15:55reverse continuing its downward movement
414. 15:57towards the next unmitigated higher time
415. 16:00frame demand Zone however something
416. 16:02interesting occurs in this situation
417. 16:04instead of respecting this unmitigated
418. 16:07demand Zone and reversing higher the
419. 16:09price sharply pushes downwards and
420. 16:11breaks through the demand Zone this
421. 16:13break of the demand Z indicates a lack
422. 16:16of the bullish momentum in the market
423. 16:18thereby signaling a shift in control
424. 16:20from buyers to sellers this creates a
425. 16:23perfect Supply Zone that is generated by
426. 16:25the price wave that flip the demand Zone
427. 16:27to the downside so the new Supply flip
428. 16:30Zone can be marked as the extreme candle
429. 16:32in the price wave that caus the break
430. 16:34below the unmitigated demand Zone in
431. 16:37this case also price needs to form an
432. 16:40imbalance or inefficiency during the
433. 16:42breakout price move typically after such
434. 16:44a flip pattern occurs the price May
435. 16:47retrace back to our flip Zone to fill
436. 16:49the inefficiency and thereby even
437. 16:51mitigate the supply flip Zone before
438. 16:53assuming its bearish moment so this is
439. 16:55what we refer to as a demand to supply
440. 16:57flip pattern it denotes a shift in the
441. 17:00market dynamics suggesting a potential
442. 17:02opportunity for Traders to consider
443. 17:05entering short positions anticipating
444. 17:07the continuation of the prevailing
445. 17:09downtrend now let us look at an example
446. 17:12here we have a 1H hour time frame chart
447. 17:14the price has formed a series of bearish
448. 17:16breakout structures indicating a bearish
449. 17:19trend we can also notice an unmitigated
450. 17:21demand Zone in the 4our time frame upon
451. 17:24reaching this higher time frame demand
452. 17:25Zone many Traders would expect a
453. 17:28potential reverse
454. 17:29and they would start looking for signs
455. 17:31of a change of character to enter into
456. 17:33long trade positions but contrary to
457. 17:36their expectations price Taps into the
458. 17:384-Hour demand Zone experiences a minor
459. 17:41pullback and it crashes downward with
460. 17:44significant momentum this aggressive
461. 17:46price move is associated with
462. 17:48inefficiencies or imbalances that needs
463. 17:50to be filled to regain the balance price
464. 17:53action this movement causes a flip in
465. 17:55the demand Zone indicating a shift in
466. 17:57the market dynamics and potentially
467. 18:00signaling a continuation of the bearish
468. 18:02trend we can mark this newly formed
469. 18:04Supply flip Zone at the extreme candle
470. 18:07of the inefficient price wave that
471. 18:09caused the break of the higher time
472. 18:10frame demand Zone to the downside the
473. 18:12break of the demand Zone also signals a
474. 18:15lack of bullish momentum indicating a
475. 18:17shift in control from buyers to the
476. 18:19sellers and as you can see on the chart
477. 18:21the price retraces back to the supply
478. 18:23flip Zone experiences a reaction and
479. 18:26then aggressively move downwards with
480. 18:28significant momentum Traders can look to
481. 18:31take short trades from within the supply
482. 18:33flip Zone formed so this is all you need
483. 18:36to know about supply and demand flips if
484. 18:39you have come this far thank you for
485. 18:40watching this video I hope you have
486. 18:42found this video informative if it was
487. 18:45useful please make sure to like and
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498. 19:07next episode till then bye