3 Romeo s Video Time

Summary

In this detailed analysis of Bitcoin's price action, the speaker discusses the key principles of market structure, focusing on monthly open, close, high, and low as fixed values. Emphasizing the importance of time and price, the speaker explains how to frame trade ideas using Fibonacci levels, liquidity zones, and price action strategies. Key concepts like accumulation, manipulation, and distribution phases, along with the importance of staying true to market bias, are explored in-depth. The speaker also highlights entry points, risk management, and how to avoid false breakouts, offering insights into effective trading techniques in a bullish market.

Takeaways

• 📈 The monthly open and close are fixed reference points, while the high and low are dynamic, making them crucial for understanding market context.
• 🎯 Identifying the higher-timeframe draw on liquidity (in this case, Bitcoin’s monthly FVG around 32,000) forms the foundation of directional bias.
• 🧭 A candle closing above or below key levels—especially lows that break highs and highs that break lows—acts as important confirmation or invalidation.
• 💹 Even when a monthly candle looks bearish, its context within a bullish market and its reaction to key PD arrays determine true bias.
• 📉 Fibs, especially the 50% and 0.618 levels, are important for identifying premium/discount zones and framing potential entry points.
• 🧱 A trade idea is built from three pillars: the expected draw on liquidity, the potential entry zone, and the price point unlikely to be hit before the target (invalidation).
• ⏳ Higher-timeframe candles can be subdivided into phases (accumulation, manipulation, distribution) to anticipate when entries are most probable.
• 🕒 Waiting for confirmation—such as a break of the high that broke a low or a flip of the opening price—helps avoid false bottoms/tops.
• 🔄 Using multiple timeframes (e.g., monthly for magnet, weekly/daily for entries) is essential for precision and narrative alignment.
• 📊 A bearish candle in a clear uptrend is often expected to be engulfed, signaling continuation toward higher-timeframe liquidity targets.
• ✨ Wick entries simply mean entering below the opening price in bullish conditions (or above in bearish)—a concept tied to understanding intraperiod structure.

Q & A

What are the fixed and moving values when discussing monthly power of three?

The fixed values are the open and close, while the moving values are the high and the low. The focus is on understanding how the price moves relative to these levels within a monthly timeframe.

Why is blending time and price considered crucial in this approach?

Blending time and price is essential because price levels alone are not sufficient for accurate predictions. Price levels become meaningful only when time is factored in, and time is only useful if price is at a key level. Combining both provides more reliable insights.

What is the significance of the 'monthly range open' and 'monthly close'?

The monthly range open and close are fixed values that act as key reference points. The opening price defines the start of the month, and the closing price signals the end, both of which help in determining the market’s direction and sentiment.

Why was the bias on Bitcoin considered bullish despite a bearish monthly candle?

Even though the monthly candle closed as bearish, the bias remained bullish because the price did not close below the previous low, and the price action was still near a higher timeframe liquidity level. This indicated the possibility of a continued upward movement.

What is the importance of the 'draw on liquidity' in framing a trade?

The 'draw on liquidity' represents the target level where price is likely to be drawn. It acts as a magnet for price movement. Identifying this liquidity level is critical for determining where price is expected to head, which in turn helps in framing an accurate trade idea.

What role does the Fibonacci retracement play in price action analysis?

Fibonacci retracement, particularly the 50% level, is used to identify potential entry points and measure price correction levels. It helps traders understand if the market is in a premium or discount phase, thus aiding in making informed buy or sell decisions.

What are the three main steps to frame a trade idea according to the script?

The three steps to frame a trade idea are: 1) Identify the draw on liquidity (where price is likely to be drawn to), 2) Find potential entry points based on price action, and 3) Determine the invalidation level, which is a price point unlikely to be reached before the target liquidity level.

How does the concept of 'engulfing candles' relate to market bias?

Engulfing candles are used to gauge potential market shifts. In a bullish market, a bearish engulfing candle is expected to be followed by a bullish reversal. In a bearish market, a bullish engulfing candle is expected to be followed by a bearish continuation. These patterns help in confirming the prevailing market bias.

What is the significance of the term 'wick entry' in trading?

'Wick entry' refers to entering a trade based on the wick of a candle. This means entering the market when the price moves below (in a bullish market) or above (in a bearish market) the opening price, typically targeting a reversal at key levels or liquidity pools.

What is the purpose of dividing a candle into three or four sections?

Dividing a candle into sections—such as accumulation, manipulation, and distribution—helps to understand price behavior in greater detail. This approach enables traders to identify phases of market activity, which can help predict potential entry points and market movements.