Read Orderflow By Using Time Cycles (PXH/PXL) 🪄

Summary

This lecture introduces the concept of algorithmic time and price delivery through time cycles, focusing on how to measure order flow by analyzing past cycle highs and lows. The speaker explains how these cycles can be applied from high to low time frames, such as daily charts down to 90-minute cycles. By observing price reactions at key levels, such as previous cycle highs and lows, one can anticipate market direction and liquidity targets. The lecture also shares real-time examples of how this methodology works and how it can significantly enhance market analysis and trading strategy.

Takeaways

• 😀 **90-Minute Cycles**: The speaker uses 90-minute time cycles as a key method to analyze market behavior, emphasizing their application in intraday trading.
• 😀 **Market Continuation Patterns**: Bullish and bearish continuation patterns can be identified by comparing the high and low of previous cycles to the current cycle.
• 😀 **Time Window Relevance**: Specific time windows, such as AM and PM sessions, have the most significant volatility, making them prime for analysis with 90-minute cycles.
• 😀 **Bearish Continuation**: A bearish market continuation happens when the high of the current cycle forms near the low of the previous cycle, indicating price manipulation for a downward move.
• 😀 **Bullish Continuation**: A bullish market continuation occurs when the low of the current cycle forms near the high of the previous cycle, signaling a potential price push higher.
• 😀 **Fractal Analysis**: The same logic of analyzing previous highs and lows can be applied across different timeframes (daily, 90-minute, or even smaller cycles) for accurate predictions.
• 😀 **Equilibrium Levels**: 50% of the previous cycle's range (from high to low or vice versa) is a key reference point in determining entry and exit levels for trades.
• 😀 **Trading During News Events**: The speaker advises caution when trading during major news events (like NFP week), as these can distort time cycles and create erratic market behavior.
• 😀 **Support and Resistance at Cycle Highs and Lows**: Price levels from previous cycles (either highs or lows) tend to act as strong support or resistance, guiding future price action.
• 😀 **Patience and Consistency**: Successful application of this strategy requires time, study, and persistence, with the speaker encouraging traders to take their time to fully grasp the concepts.
• 😀 **Use of Partial Exits**: In managing trades, partial exits are used to lock in profits, especially when price action indicates weakness or a lack of continuation.

Q & A

What is the significance of the 90-minute cycles in this trading strategy?

The 90-minute cycles are used to track price action and determine market direction within specific timeframes. These cycles help traders analyze whether the market is bullish or bearish based on the highs and lows of previous cycles.

How do the highs and lows of previous cycles influence trading decisions?

The highs and lows of previous cycles act as critical reference points. Traders look for whether the current cycle forms a high near the low of the previous cycle (bearish) or forms a low near the high of the previous cycle (bullish). This helps determine the potential direction of price movement.

What does 'repricing higher' mean in the context of this strategy?

'Repricing higher' refers to the market moving upwards towards previous higher price levels or breaking above the highs of previous cycles. It indicates a bullish continuation, where price is expected to continue rising.

Why is the 90-minute cycle especially significant in the AM and PM sessions?

The 90-minute cycle is particularly important in the AM and PM sessions because these sessions exhibit high volatility, especially in index futures markets. The timing and price action during these windows help identify key turning points and trend continuations.

What is the role of the previous cycle's high or low in this strategy?

The previous cycle's high or low serves as a key reference point. If price moves above the previous cycle’s high, it suggests a bullish continuation. If it moves below the previous cycle’s low, it indicates a bearish trend.

How does the concept of 'time distortion' impact the market's price action?

Time distortion refers to periods of consolidation or irregular price movement, often seen around significant news events like NFP (Non-Farm Payroll). These distortions can lead to unpredictable price behavior but are still analyzed using the cycle logic to anticipate market direction.

What is the importance of the 'equilibrium' of the previous cycle's range?

Equilibrium is considered the 50% level of the previous cycle's range (high to low). This level is significant because the market often retraces to this equilibrium point before continuing in the direction of the overall trend, acting as a potential entry or exit point.

Why is the previous cycle’s low important before the end of a session?

The previous cycle’s low is crucial because it often acts as a magnet for price towards the end of a session, especially before session closure. Traders watch for price to reach or bounce off this level to confirm the continuation or reversal of the trend.

What happens if the price does not break through a previous cycle’s high or low?

If price does not break through the previous cycle's high or low, it could indicate a period of consolidation or market indecision. This suggests that the trend may stall, and traders should wait for a clearer signal before taking action.

How does the trading strategy work in low probability environments, like around NFP releases?

Even in low probability environments, such as during NFP releases, the strategy still works by utilizing the cycle logic. The key price levels (previous cycle highs and lows) remain significant, but the market may be more volatile and unpredictable, requiring a more cautious approach.