Time & Price Algorithmic Trading: Entries

Summary

This lecture explains the execution protocol’s first step: defining entries. Using market-maker models, the instructor shows how to identify arrays—order blocks and imbalances—that form on the left side of the curve, extend them to the right, and treat them as potential support or resistance entry zones. Through buy and sell model examples and time-frame annotations, they demonstrate entering at these arrays after a change in state delivery (CSD) while stressing that these are potential entries only. Valid trades also require predetermined stop-losses, invalidation levels, and targets, which will be covered in subsequent lectures.

Takeaways

• 😀 Entries should always be defined in advance, including entry points, stop-loss levels, and target prices, before executing a trade.
• 😀 The execution protocol relies on understanding the 'left side' (historical price action) and 'right side' (current price action) of the curve to define entries.
• 😀 Arrays (order blocks and imbalances) formed on the left side of the curve are extended to the right side to anticipate entry points.
• 😀 Once price moves past an array (such as an order block or imbalance), it should be used as support or resistance when price revisits that level.
• 😀 A market maker buy model includes original consolidation on the left, followed by a smart reversal (change in delivery) on the right side of the curve.
• 😀 Bullish order blocks and imbalances on the left side act as support when price rises above them on the right side of the curve.
• 😀 Bearish order blocks and imbalances on the left side act as resistance when price moves below them on the right side of the curve.
• 😀 A **Change in State Delivery (CSD)** is a key signal indicating a shift in market direction, marking the transition from accumulation to distribution or vice versa.
• 😀 Using multiple timeframes (e.g., 5-second to 15-second charts) can help identify more accurate and precise entry points in fast-moving markets.
• 😀 Identifying and marking arrays (such as imbalances and order blocks) from the left side of the curve helps anticipate where price will react on the right side, but trade decisions must also include valid stop-loss and target levels for risk management.

Q & A

What are the three key reference points needed before executing a trade?

Before executing a trade, it's crucial to define your entry, stop-loss, and targets. Without these, there is no clear trade idea.

What is meant by the 'left side of the curve' in the context of market maker models?

The 'left side of the curve' refers to the historical data or past price action. It's where order blocks and imbalances are formed, providing reference points for future price behavior.

How do you define order flow on the right side of the curve?

Order flow on the right side of the curve is determined by utilizing arrays (like order blocks and imbalances) that were formed on the left side. These arrays are extended into the future and serve as support or resistance zones.

What is the significance of the 'CSD' or 'Change in State Delivery'?

CSD refers to a shift in market behavior, which signals a potential reversal or continuation. It's a critical event for confirming the change from the left side to the right side of the curve, indicating when to consider potential trades.

How do you identify entry points using arrays?

Entry points are identified by finding arrays (such as order blocks or imbalances) on the left side of the curve, extending them to the right side. Once price reaches these levels and reacts (as support or resistance), it indicates a potential entry opportunity.

What role do order blocks and imbalances play in defining entry points?

Order blocks and imbalances are key arrays used to define entry points. On the left side of the curve, they are observed as areas where price has previously reacted. When price moves into these areas on the right side, they serve as potential support or resistance zones for entries.

What happens when price displaces above or below an array?

When price displaces above an array (like an order block or imbalance), it must be utilized as support on the right side of the curve. Conversely, when price displaces below an array, it becomes resistance. These movements guide the decision for potential entries.

What should you do if the left side of the curve is too far away for reference?

If the left side of the curve is too far away, you can refer to arrays formed on the right side of the curve. These could include newly formed imbalances or order blocks that become relevant as price moves forward.

What does the term 'discount arrays' refer to in this context?

'Discount arrays' refer to order blocks or imbalances on the left side of the curve that, once price moves above them on the right side, are considered to be discounted support areas where potential entries can occur.

How does the market maker buy model help in identifying entries?

The market maker buy model helps identify entries by showing price behavior during consolidation, followed by a smart reversal. By observing where imbalances and order blocks form on the left side, we anticipate their use as support or resistance on the right side, guiding entry points.