Change In State Of Delivery | CISD Simplified

Summary

This video script delves into advanced trading concepts such as Change in State of Delivery (CISD), order flow analysis, and market liquidity traps. It explains how to identify significant candles or sequences, track one-sided order flows, and use these insights for macro and micro confirmations. The video covers multi-day sweeps, kill zones, and strategies to time entries and exits, highlighting key technical tools like FIB levels and external liquidity sweeps. The focus is on understanding price action, making informed trades, and anticipating market reversals to secure profitable positions.

Takeaways

• 😀 Change in the state of delivery (CISD) occurs when the price shifts from buys to sells or vice versa, marking a shift in market order flow.
• 😀 In the case of a bullish reversal, the CISD is identified when price engulfs the open of the bearish candle responsible for forming the Swing High.
• 😀 The same process applies to a bearish reversal, where the CISD occurs when price engulfs the open of the bullish candle responsible for forming the Swing Low.
• 😀 One-sided order flow is crucial for identifying key price levels, where a series of candles in the same direction (bullish or bearish) establishes a dominant market flow.
• 😀 A valid CISD is formed when a sequence of one-sided order flow is broken by an opposing market move (e.g., a bullish candle disrupting a bearish order flow).
• 😀 Timing is essential in trading; the Kill Zone (from 7:00 to 10:00 EST) is a critical period for identifying setups with higher accuracy.
• 😀 The concept of 'micro confirmation to macro POI' is used, where the CISD serves as confirmation for entering based on a higher time frame point of interest (POI).
• 😀 In a multi-day sweep setup, a series of equal or close highs are formed over several days, indicating trapped breakout traders. Once liquidity is swept, the market is likely to reverse.
• 😀 The 'Kill Zone' is an ideal window for entering trades, as it represents the time frame when market moves are most likely to follow the identified setup.
• 😀 External liquidity sweeps are essential in understanding market direction. Once a buying climax is swept, price is likely to move in the opposite direction, creating an ideal entry point for a reversal trade.

Q & A

What is the change in the state of delivery (CISD)?

The change in the state of delivery (CISD) occurs when the price shifts delivery from buyers to sellers or vice versa. It happens when the price engulfs the open of the previous candle responsible for forming a swing high or low.

How do you identify a valid CISD in a bullish example?

In a bullish example, you locate the bearish candle responsible for forming the swing low. Once the price engulfs the open of that candle, it forms the CISD, indicating a potential market reversal.

How does one identify the CISD in a bearish example?

In a bearish example, you find the bullish candle responsible for forming the swing high. When the price engulfs the open of that candle, it forms the CISD, signaling a potential reversal to the downside.

What role does one-sided order flow play in identifying CISD?

One-sided order flow is crucial in identifying CISD because it indicates market dominance in one direction. A sequence of one-sided order flow (all bullish or all bearish candles) helps pinpoint the candle that marks the swing high or low.

What does a sequence of candles with alternating bullish and bearish movements signify in the CISD context?

A sequence of alternating bullish and bearish candles disturbs the one-sided distribution, meaning the market is losing its directionality. In this case, you're looking for a clear dominant candle to identify the CISD.

How does timing affect the CISD model and accuracy of setups?

Timing is a critical element in the CISD model, especially the Kill Zone (7:00-10:00 AM EST). Without precise timing, the accuracy of setups may decrease, as market conditions change throughout the day.

What is the relationship between macro and micro Points of Interest (POI) in the CISD model?

In the CISD model, macro POI is the larger trend or market structure observed on higher time frames. The micro POI, on the other hand, is the lower time frame confirmation (CISD) that aligns with the larger macro trend, ensuring a more accurate entry.

How is a multi-day sweep setup used in trading?

In a multi-day sweep setup, you identify liquidity above a certain price level. A high is made on Monday, another on Tuesday, and then on Wednesday, the liquidity above that level is swept, trapping buyers before the price reverses. This setup aligns with the Kill Zone for better entry timing.

What is the purpose of identifying external liquidity in the CISD model?

Identifying external liquidity helps anticipate price reversals. It indicates trapped orders from breakout traders, and once this liquidity is swept, it increases the likelihood of a price reversal, offering traders a strategic entry point.

What is the significance of using FIB (Fibonacci) levels in determining take-profit targets?

Fibonacci levels are used to gauge potential price retracements, with the 'premium to discount' concept helping identify overbought and oversold conditions. The extreme levels represent the take-profit targets, which traders can use to set their exit points after entering the market.