Romeo Video 3
Summary
TLDRThis script delves into the 'Monthly Power of Three' trading strategy, focusing on Bitcoin's price action through a four-hour lens. It emphasizes the importance of blending time and price for effective trading, highlighting key levels and Fibonacci retracement as critical for framing trade ideas. The speaker illustrates how to identify entry points, set stop losses, and recognize patterns like accumulation, manipulation, and distribution within monthly candles, advocating for a disciplined approach to maintain a bullish bias until invalidated.
Takeaways
- 📊 The concept of 'Monthly Power of Three' involves analyzing the open, high, low, and close of Bitcoin through a four-hour time frame lens.
- 🔍 Importance is placed on the blend of time and price analysis, emphasizing that price levels are significant when considered with time, and vice versa.
- 📈 A bullish bias on Bitcoin is maintained, with the expectation of being drawn to higher time frame levels, specifically targeting the 32,000 price point.
- 🧲 The 'magnet' for Bitcoin is identified at the higher time frame liquidity level of 32,000, where the expectation is to buy retracements until this level is reached.
- 🗓 The previous month's candle on Bitcoin's chart was bearish but did not close below the low, suggesting a continuation of the bullish trend rather than a bearish reversal.
- 📉 The refusal to close below certain lows and the presence of key levels, such as the 0.618 Fibonacci level, are critical in framing trade ideas and maintaining a bullish bias.
- 📝 The speaker emphasizes the importance of sticking to a trading bias until it is invalidated, highlighting the need for discipline in trading strategies.
- 📌 Key levels, such as lows that break highs or highs that break lows, are crucial for identifying potential entry and exit points in trading.
- 📉 The strategy of 'entering with a wick' is discussed, which involves buying below the opening price in a bullish market or selling above the opening price in a bearish market.
- 📊 The division of each candle into three parts (or four for monthly candles) is highlighted as a method for understanding the phases of accumulation, manipulation, and distribution in the market.
- 🔑 The importance of confirming the high being broken before entering a trade is stressed to avoid being tricked into a false bottom or top.
Q & A
What is the 'Monthly Power of Three' concept mentioned in the script?
-The 'Monthly Power of Three' refers to analyzing the monthly candlestick chart in terms of its open, high, low, and close, and dividing it into three parts or phases: accumulation, manipulation, and distribution. This method helps in understanding the market sentiment and predicting future price movements.
What does the speaker mean by 'blend of time and price'?
-The 'blend of time and price' refers to the integration of both time and price factors in technical analysis. It suggests that price levels alone are not sufficient for making trading decisions; they need to be considered in conjunction with the time element for a more accurate analysis.
Why is the speaker focusing on Bitcoin in the script?
-The speaker is focusing on Bitcoin because it has been offering a clear bias or trend, making it easier to analyze and predict its price movements. Additionally, Bitcoin has a higher time frame liquidity level at 32,000, which is a key level the speaker is watching for potential buying opportunities.
What is the significance of the 'monthly fvg' mentioned in the script?
-The 'monthly fvg' or Fibonacci volume glow refers to a technical analysis tool that combines Fibonacci levels with volume analysis. It helps in identifying key support and resistance levels where the price is likely to react, providing potential entry and exit points for trades.
What does the speaker mean by 'sticking to your bias until it is invalidated'?
-This means that a trader should maintain their market outlook or 'bias' as long as the market conditions continue to support it. If new information or market movements contradict the trader's bias, it should be re-evaluated or 'invalidated', prompting a change in strategy.
What is the importance of 'closing below lows and above highs' in the context of the script?
-Closing below lows and above highs is significant because it can indicate a potential trend reversal or continuation. If a candle closes below its low, it might suggest a bearish sentiment, whereas closing above its high could indicate a bullish sentiment.
How does the speaker define a 'wick entry' in trading?
-A 'wick entry' is a trading strategy where a trader enters a position at the end of a candle's wick, which is the small line extending from the body of the candle. It is considered a good entry point because it signifies a potential reversal of the current trend, especially when the wick occurs below the opening price in a bullish market or above the opening price in a bearish market.
What does the speaker suggest as the first step in framing a trade idea?
-The first step in framing a trade idea, according to the speaker, is to determine where the price is likely to be drawn to, either up or down. This is known as identifying the 'magnet' or the key level that the price is expected to reach.
What is the role of the 'opposing end' or 'invalidation level' in the trade idea?
-The 'opposing end' or 'invalidation level' is a price point that the trader considers unlikely to be reached before the target or 'draw liquidity' is achieved. If this level is breached, it could indicate that the trade idea is no longer valid, and the trader may need to exit or adjust their position.
How does the speaker describe the process of 'accumulation manipulation distribution' in the context of trading?
-The speaker describes 'accumulation manipulation distribution' as a three-phase process within a higher time frame candle. Accumulation is when buyers enter the market, manipulation is when the market is influenced to create a false impression, and distribution is when sellers exit their positions. This process helps traders understand the market's behavior and anticipate potential price movements.
Outlines
📈 Monthly Power of Three Analysis
The speaker discusses the concept of 'Monthly Power of Three' in the context of Bitcoin trading. They explain that the open and close of the monthly candle are fixed values, while the high and low are moving values. The focus is on catching the monthly range by identifying either the low or the high. The speaker emphasizes the importance of time and price in trading, highlighting the need to blend these two factors for better results. They also discuss the significance of the 50% Fibonacci level in their analysis and the importance of sticking to a trading bias until it is invalidated. The speaker marks the draw on liquidity on the higher time frame, indicating a bullish outlook for Bitcoin, aiming for a target of 32,000.
📉 Engulfing Candles and Bias
The speaker continues the discussion on Bitcoin, focusing on the monthly candle's behavior. They note that despite the bearish appearance of the candle, the bias remains bullish as the candle did not close below the previous low. The speaker discusses the importance of key levels in trading, such as the refusal to close below certain lows and the significance of highs that break lows or lows that break highs. They also delve into framing a trade idea by considering the premium discount and reading price action. The speaker emphasizes the importance of understanding the context of the move and the narrative behind the trading decisions.
🚀 Framing Trade Ideas and Fibonacci Levels
The speaker outlines the process of framing a trade idea, starting with identifying where the price is likely to be drawn (the magnet). They discuss potential entry points and the opposing end of the draw liquidity, which is considered unlikely to be reached before the target. The speaker uses the 0.618 Fibonacci level as an example of a reasonable stop loss in an uptrending market. They also explain the concept of 'power of three' in trading, dividing each candle into three parts to identify accumulation, manipulation, and distribution phases. The speaker emphasizes the importance of understanding the order flow and the context of the move to make informed trading decisions.
🔍 Wick Entries and Candle Analysis
The speaker delves deeper into the concept of 'power of three' in candle analysis, explaining how to trade using the open, high, low, and close of the monthly candle. They discuss the strategy of buying below the opening price in a bullish market and selling above the opening price in a bearish market. The speaker introduces the concept of 'wick entry,' which involves entering a trade below the opening price in a bullish context or above the opening price in a bearish context. They also discuss the importance of waiting for confirmation of the high being broken before entering a trade to avoid being tricked into a false bottom.
🔄 Accumulation, Manipulation, and Distribution
The speaker concludes the discussion by emphasizing the importance of understanding the accumulation, manipulation, and distribution phases within each candle. They explain that these phases can be used to identify key trading opportunities and to frame a trade idea effectively. The speaker also discusses the importance of switching between higher and lower time frames to gain a comprehensive understanding of the market dynamics. They suggest waiting for the sections of the candle to play out as they are supposed to, focusing on the accumulation phase in the first week, manipulation in the second week, and distribution in the third week to make informed trading decisions.
Mindmap
Keywords
💡Monthly Power of Three
💡Fixed Values
💡Fibonacci
💡Liquidity
💡Bias
💡Engulfing Candle
💡Key Levels
💡Trade Idea
💡Order Flow
💡Wick Entry
💡Accumulation, Manipulation, Distribution
Highlights
Introduction to the concept of 'monthly power of three' in trading, focusing on the importance of time and price in determining significant market movements.
Explanation of how the open and close of a trading period are fixed values, while the high and low are moving values, emphasizing the need to look through a 'four-hour time frame lens'.
Discussion on the blend of time and price, highlighting the famous saying that 'price levels are useless until time is considered, and time is of no use unless price is at a key level'.
Focus on Bitcoin's recent move, demonstrating the use of Fibonacci levels to predict market trends and the importance of sticking to a trading bias until invalidated.
Analysis of Bitcoin's higher time frame liquidity at 32,000, and the strategy of buying retracements until reaching this level.
Emphasis on the significance of the monthly candle's close, explaining that a bearish candle in a bullish market is likely to be engulfed in the next candle.
Introduction of the concept of 'draw liquidity' and its role in framing a trading bias, using the example of Bitcoin's market behavior.
Explanation of how to frame a trade idea by identifying draw liquidity, potential entry points, and the opposing end of the liquidity.
Discussion on the importance of key levels in trading, particularly the lows that break the high and the highs that break the lows.
Introduction of the 'SR flip' price action and its role in identifying potential trading opportunities.
Explanation of how to use the 'power of three' in trading, dividing the monthly candle into three sections for analysis.
Discussion on the importance of waiting for confirmation of the high being broken before entering a trade.
Introduction of the 'accumulation manipulation distribution' model and its application in understanding market movements.
Explanation of how to use the 'power of three' in trading, focusing on the first, second, and third candles for entry and exit strategies.
Discussion on the nuances of entering trades with a 'wick entry', explaining the strategy of entering below the opening price when bullish and above when bearish.
Emphasis on the importance of understanding the context and narrative of the market move, blending it with the opening price to predict future movements.
Introduction of a deeper understanding of 'accumulation manipulation distribution', detailing how higher time frame candles can be divided into sections for analysis.
Transcripts
all right folks now
talking about the monthly power of three
we mentioned before the open and the
close are fixed values
right
and the high and the low
or the
moving values
right
monthly power of three we look at it
through the four hour time frame lens
now so this is this is Bitcoin a recent
move I'd called
we pull a fib
we look at the 50 percent
and this is going to be
a blend of time and price
right because as We Know
the famous picture which is quite true
uh the picture which says
uh price levels are useless until time
is considered
and time is of no use
unless price is at a key level
right
when you blend The Two Of course then
you got a pretty good result
so now let's focus on
on the the monthly of catching the
monthly range
open is fixed close is fixed right and
we're trying to catch a
uh we're trying to catch
either the low or the high so right now
on bitcoin
we were bullish
we were expecting uh we're expecting it
to be drawn to the higher time frame
and
before I continue
let me just mark
the draw on liquidity on the higher time
frame
which is this monthly fvg
all right
so the magnet for us is up here right
and the reason I've been more focused on
bitcoin is if you've noticed is it was
offering pretty clean it had a pretty
clean bias ever since down here I've
been calling for 32 000. all right so
over here's a 32 over here I said 32
over here I said 32 and here as well I'd
kind of slipped semi-slip a bit
calling it here instead of here
but over here
I had demonstrated an important thing
which is sticking to your bias until it
is invalidated right which I'll speak
about too
um but the point is the reason I'm
focusing on bitcoin so much is because
the higher time frame is pretty obvious
the Drone liquidity is 32 000.
we are looking to buy retracements until
we reach 32 000 right
so
keeping the higher time frame draw
liquidity in mind
we have opened a new candle
on the monthly
right
and the previous month's candle
has engulfed
the month before it candle
right
but it never closed below the low
you've seen me emphasize if you follow
if you've been following me for a while
on the closes below lows and above highs
right so this monthly candle
uh this monthly candle
closed as an engulfing candle
replay
I'm clearly not used to this
device part replay
I usually watch the data live so
this month closed right so pretty
bearish now you would think but no the
bias is up here
we're expecting this to be
the the magnet if you will
it did not close below this low
if it had closed below the low then you
could you could start considering
bearishness but
it refused to close below the candle
and it is bumping into a higher time
frame key level the fvg
and the inverted f v g
as well
right
so there was no reason to be bearish now
of course then you pull your fibs
you look at the premium discount
and
this is where I delve into how to frame
a trade idea
on reading price not Trading
because this is not Financial advice
this is only
price action reading for fun
right
so again there's refusal to close below
this low as well the swing low
uh that broke the high those are
important key levels I've mentioned
before which is
the lows that break the high
or the highs that break the lows those
are super important key levels when when
closed above or below or falsely closed
above or falsely closed below and back
test that rewind what I said just now
rewind it listen to it once twice three
times and back test it
so
we have this important low
we have this key level the ifag we have
the old high as well a classic
Sr flip price action
and this is what I called
right over here I'd call for Bitcoin
to go to thirty two thousand first of
all for us first Target is over here
and second target is up here
now what happened we dug a bit deeper
before eventually
uh rallying
to
the target
the targets which was one and then
eventually two coming soon right
how would you frame a trade idea
you want to First have an eye on the
Target right so my eye was up here
so the first thing you want is a draw on
liquidity this is how you frame the bias
I had given out a tweet in written form
but I think a video form is a lot more
useful
so number one is
where is Price what's the magnet
where do you think price is going to be
drawn to
either up or down
second of all
what potential entry points do you see
right
third of all
what
is the opposing end
or what is the other side of the draw
liquidity which you are
considering in your assessment highly
unlikely to be reached before the Drone
liquidity
let me say that again
what's the point in price
which is highly unlikely to be reached
before the draw liquidity is reached
right
that is your invalidation level
so
right over here
right over here
we had number one which is where is
Price likely to be going to 32 000.
that's the I
what is a potential entry
um over here
was considered over here was considered
these are the two entries given right
what is a place you deem unlikely to be
tapped before
before
the target
this liquidity pool
highly unlikely to be tapped before
the draw liquidity especially given that
it is a 0.618 fib
and we are in an uptrending Market
tapping into the 50 percent
Fibonacci level
right so this was a reasonable stop loss
for the idea to frame the bias that we
are going to be
rising up there
so this is one
where is the draw liquidity
number two
what is the entry fifty percent
below this low add the fifty percent
the old High
the monthly remember the monthly fvg the
monthly ifpg
week two of the month
right
which I'll be getting into right now
and number three is which which which
point in price is unlikely to be reached
before the Drone liquidity
invalidation
right and that is how a birth
that is how a
a trade idea is birthed
right
it's funny using the RR tool but this is
all called in real time
right if you had picked this
the law of the refugee then sure
it would be shittier risk reward but you
would still be correct
right
now this alone is enough however there
is an important aspect which is the
divisions of each candle
each candle is divided into three
or you can save the volume to four as
well
I like to use
three on The Daily candle
and the weekly
and I like to use four
on the uh the monthly candle
in fact
you can use
this dissection of any higher time frame
candle
as a three candle process so you don't
need any more than three candles to
trade right you can trade this candle
you can choose one candle at a key level
one candle at a key level
one
two three
one two
that's your
that's your whole trade right
and things are getting getting uh
getting close to be interesting very
soon
so
keeping that in mind we have the monthly
candles power of three
the monthly open
High
low and close
the monthly candle is closed as a
bearish candle in a bullish Market in a
clearly obviously bullish Market
disrespecting bear Speedy Rays
respecting bullish speed race in a
bullish Market a bearish candle
is going to be engulfed in the next
candle
in a bearish market a bullish candle
is anticipated to be engulfed in the
next few candles
right retracement protraction expansion
expansion protection expansion
right
so this bearish candle we're expecting a
higher time frame remember
so this alone is a trade
keeping in mind the order flow The
Narrative the whole context of the move
you're trading one two three candle
number one
candle number two
and candle number three
right
from the lens of power of three
you go to June
you go to the open
you want to buy again what was the all
the rules the rules were
buying
below the opening price when bullish and
above the opening price from bearish
into a higher time frame key level
blend that with what I suggest now of
how to frame a trade idea
and you get a pretty accurate read on
price
right so below below below we're forming
a range we're forming a range below the
opening price
we're breaking out of the range
this is all a wick entry what does that
mean what is what does wick mean we
always say enter with a wick right
what is the meaning of entering in the
wick
it is simply entering below the opening
price
when uh bullish
entering below the the above the opening
price when bearish
all the order blocks
all the breakers all the
uh otes everything is happening over
here and you're writing it back into the
opening price
and potentially a flip of the opening
price and a continuation lower
right this is how you get the wick entry
same over here
open
decline into key level
this is all happening below the opening
price
right
you're waiting for the the order block
the range the breaker the OT to form
below the opening price
at a certain time required
and you write it up
and you entered from the wick of the
candle right
not to stray too much
but
in summary
opening price fixed closing price
opening time excuse me fixed and closing
time is fixed right
the previous candle was a bearish candle
in an uptrend bearish candles and
operands are to be engulfed we've
reached a key level
right
so we are at a key level The Narrative
the context everything is in Aid of a
push higher
blending that with the opening price
we're bullish right
what do we say
candle opens we dump we create a range
below the opening price
we then break the range below the
opening price
and we rally
that's cool but
here's a question
how do you make sure that you weren't
tricked into this being the bottom right
you could have well and easily done that
you could have you could have bought
here turtle soup right
and then you could have been suckered in
the stop tab before the move
that is possible
that can be avoided by two ways
number one
always wait for the confirmation of the
high being broken
right whether it's the opening price
being flipped
or it's the high that broke the low
being flipped
all right
or
you can simply wait for the uh
the sections
of the candle
to play out as they're supposed to be
as I mentioned before you got one two
three
accumulation wait for the wait for week
one to accumulate week two to manipulate
and then week three you're looking for
buys
all right accumulation manipulation
distribution let's see what that looks
like
week one is done
week two accumulation manipulation
distribution
right
so again you're noticing I'm I'm
switching back and forth to through two
time frames and that is super important
the higher time frame to give me a draw
liquidity a magnet
and the lower time frame to find the
entry patterns quote unquote
right
now the time has come
the time has come
for me to uh
show an even deeper
understanding of this
accumulation manipulation distribution
which I just mentioned uh the higher
time frame candle being divided into
sections
right and you can use any three of them
accumulation manipulation distribution
you can go back to the the video the
previous uh not this one the one before
it
all right another one before this one
the one before the one before this one
right where I talked about the two
ways this can play out but the basic
premise is an accumulation an
accumulation candle
a manipulation candle and then the
candle number three
you want to ride the wave of the candle
back to
the height of the candle allows Turtle
souped
let's take a break and we will
get into
uh
a nuance
a detail
which
I haven't really mentioned before
but let's uh let's mention it now
let me just take a break
a couple of minutes and I'll be back
so I'm gonna stop the recording right
now
and leave you on suspense mode
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