Why You Keep Missing The Big Moves

Summary

This video delves into the concept of the Market Maker model, focusing on price action during the second stage of reaccumulation. It explains how smart money reversals and the inversion fair value gap influence price movements. The key takeaway is that understanding the market phase and using specific price delivery arrays can help traders avoid missing entries. By combining these tools, traders can predict where price is unlikely to retrace, helping them make better decisions during reaccumulation phases and avoid getting left behind in fast-moving markets.

Takeaways

• 😀 Smart money reversal occurs when price switches from bearish to bullish order flow, signaling the start of a buy side delivery.
• 😀 The second stage of reaccumulation does not retrace to the first stage accumulation low, highlighting the importance of recognizing price patterns.
• 😀 In the market maker model, understanding the original consolidation and how price behaves after leaving it is crucial for accurate trading decisions.
• 😀 The inversion fair value gap (FV gap) is an important tool for predicting where price is likely to be respected and where it won’t go beyond.
• 😀 The PD array and FV gap should always be respected on the buy side of the curve, as it gives insight into potential price expansions.
• 😀 Once price breaks above a bearish FV gap, it should not go back beneath the midpoint of the gap, which indicates price is in a phase of expansion.
• 😀 Traders often miss their fills because they expect price to retrace into a fair value gap, but fail to recognize the market phase they’re in.
• 😀 Using the market maker model with a full view of the price action can help traders avoid missing opportunities and making incorrect trades.
• 😀 The second stage reaccumulation is often in a hurry to reach the original consolidation high, making retracements unlikely.
• 😀 A clear bearish FV gap from the left side of the market should not be broken once price retraces into it; this can guide successful entry strategies.

Q & A

What is the unicorn referenced in the script?

The 'unicorn' in this context refers to a unique or ideal trading setup, specifically a combination of market conditions where price moves in a predictable and profitable direction. This involves understanding key stages of price delivery, smart money reversal, and reaccumulation phases.

What is the significance of the second stage reaccumulation?

The second stage reaccumulation is an important phase in the market maker model where price consolidates and sets up for the next big move. It's the phase after the initial accumulation, where smart money positions themselves before the market breaks out.

Why do traders miss their entries when price moves away from them?

Traders often miss their entries because they wait for price to return to their desired entry level, but by that time, the market has already moved past it. This happens because smart money buys in lower price ranges and leaves the range quickly without returning to it.

What is the 'smart money reversal'?

The smart money reversal occurs when price shifts from a bearish to a bullish trend. It happens after a consolidation phase where the market maker model transitions, and institutional investors (the 'smart money') begin to buy in the market, reversing the trend.

What is an 'inversion fair value gap' and why is it important?

An inversion fair value gap is a price range where a gap has formed due to rapid market movement, often linked to the market maker model. These gaps are significant because price typically respects them during reaccumulation phases, and traders use these levels to anticipate future price movements.

How do you identify the buy side of the curve in the market maker model?

The buy side of the curve is identified once price has broken the previous bearish phase and enters into an uptrend, reflecting a shift to bullish order flow. It's where smart money starts to accumulate and prices begin to move higher.

What role does the bearish PD array play in the market?

The bearish PD (Price Delivery) array is used to extend a fair value gap from the left side of the market, typically during a sell-off phase. It helps identify where the price is likely to react and provides levels where price should not retrace below if it's in a strong bullish phase.

Why should traders avoid placing entries at certain fair value gaps during reaccumulation?

Traders should avoid placing entries at certain fair value gaps during reaccumulation because, in the second stage, price typically doesn’t retrace to those levels. Instead, it continues to expand upwards, leaving traders who attempt to buy at those gaps without fills.

What does it mean when price doesn't drop below the midpoint of an inversion fair value gap?

When price doesn't drop below the midpoint of an inversion fair value gap, it indicates that the market is respecting the gap and the uptrend is likely to continue. It suggests that the price is in a strong bullish phase and won’t reverse to the lower levels of that gap.

How do you confirm the validity of a fair value gap in the context of the market maker model?

To confirm the validity of a fair value gap in the market maker model, traders look for price to respect the gap after breaking it. If the price retraces and stays above the midpoint of the gap without returning to the lower half, it confirms that the price is likely to continue expanding upwards.