IPDA Data Ranges Pt.2

Summary

In this video, Deonte from Forensic Forex demonstrates how to strategically analyze Forex charts using IPTA (Inter-bank Price Delivery Algorithm) without relying on indicators. He walks traders through a three-step process: identifying the first trading day of the month, looking back 20, 40, and 60 trading days to mark highs and lows, and combining technical and fundamental analysis. By assessing liquidity zones, seasonal trends, and key price levels, traders can form hypotheses about potential trend continuations or quarterly shifts. Practical examples using GBP/USD and US Oil illustrate how IPTA provides clarity on institutional order flow and enhances informed trade planning.

Takeaways

• 📊 IFTA (Inter-Bank Price Delivery Algorithm) controls price action and explains the four market phases: consolidation, expansion, retracement, and reversal.
• 🧩 IFTA is used by commercial speculators to move large orders and can provide insight into significant price levels.
• ⏱️ IFTA is always active and can be applied on daily timeframes or on the first trading day of a new month.
• 📅 To set up charts, identify the first trading day of the month, count back 20, 40, and 60 trading days, and mark the highest highs and lowest lows for each range.
• 💡 Use these IFTA levels to locate buy-side and sell-side liquidity, which helps frame potential trade setups.
• 🔍 At the start of each trading month, ask whether the market will undergo a quarterly trend shift or continue its current trend.
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• 📈 Combining IFTA chart activity with fundamental analysis, such as seasonality and macroeconomic data, enhances insight into likely price movements.
• 🌐 Seasonality can show historical trends, but it should be used alongside price action to avoid misleading conclusions.
• 💹 Monitoring counterparties, such as the Dollar Index (DXY), helps anticipate consolidation or trend continuation in major currency pairs.
• 🛠️ Example setups show how price reacts to liquidity zones defined by 20, 40, 60-day highs and lows, creating structured and repeatable trade opportunities.
• 🚫 The strategy emphasizes being indicator-free, focusing instead on market structure and liquidity for more accurate trading decisions.
• 🎯 Proper application of IFTA allows traders to strategically plan trades and better anticipate monthly price behavior across markets.

Q & A

What does IPTA stand for and why is it important in Forex trading?

IPTA stands for Inter-Bank Price Delivery Algorithm. It is important because it controls the price action seen on charts and is responsible for the four market phases: consolidation, expansion, retracement, and reversal. Learning IPTA helps traders identify significant price levels and understand where large liquidity orders are positioned.

What are the four market phases that IPTA helps identify?

The four market phases are consolidation, expansion, retracement, and reversal. These phases describe different patterns of price movement that can guide traders in anticipating market behavior.

How should a trader set up chart activity at the start of a new trading month?

A trader should first identify the first trading day of the month, then look back 20, 40, and 60 trading days from that day. For each period, they should find the highest high and lowest low, marking these levels to identify significant liquidity zones.

Why are the highest highs and lowest lows of look-back periods important?

These levels indicate areas where large orders of liquidity are likely to reside. By identifying them, traders can anticipate where the market might react, providing insights for potential trade setups.

What two key questions should traders ask themselves every new trading month?

Traders should ask: 1) Is the price going to continue its current trend? 2) Is the price going to make a quarterly shift, meaning a potential trend change?

How does seasonality factor into the analysis of a new trading month?

Seasonality provides historical patterns of price movement for a currency pair over multiple years. It can indicate when a pair is likely to reach highs, lows, or consolidate, helping traders align their bias, but it should not be used as the sole reason for trading decisions.

What is the difference between buy-side and sell-side liquidity in this context?

Buy-side liquidity refers to areas where large buy orders exist, often leading to price support or upward movement. Sell-side liquidity refers to areas with large sell orders, often creating resistance or downward movement. IPTA helps identify these liquidity zones for potential market reactions.

Can IPTA be used on different time frames and markets?

Yes, IPTA can be applied on daily time frames or at the first trading day of the month, and it is useful across various Forex pairs and other markets, such as commodities like US oil.

How should traders combine technical and fundamental analysis using this method?

Traders should first use technical analysis to identify key liquidity levels via IPTA and chart look-back ranges. Then, they can incorporate fundamental analysis, such as macroeconomic data and seasonality, to refine their market bias and form a well-informed trade hypothesis.

What are the practical steps demonstrated with GBP/USD in the video?

For GBP/USD, the trader identified the first trading day of January 2023, marked 20, 40, and 60-day highs and lows, and analyzed buy-side and sell-side liquidity zones. Two potential scenarios were considered: a quarterly shift where price reverses after hitting highs, or a continuation where price rises after liquidity absorption. Observations included sell-side liquidity being taken first and price moving toward buy-side liquidity.

Why does the video emphasize an indicator-free approach?

The indicator-free approach focuses on raw price action and liquidity, reducing reliance on lagging indicators. This method emphasizes understanding market structure and how large orders influence price, leading to more strategic and informed trading decisions.

How can this method be adapted to other assets, as shown with US oil?

The same process can be applied to US oil or other assets by identifying the first trading day of the month, marking 20, 40, and 60-day highs and lows, and analyzing liquidity zones. This allows traders to track large order flows and anticipate price reactions in various markets.