NASDAQ Mini Course: Episode 2

Summary

In this video, the focus is on analyzing the NASDAQ market from an intermediate-term perspective using weekly profiles, economic calendars, and key time frames. The script delves into strategies for identifying the weekly low and high, managing risk, and utilizing tools like Smart Money Technique (SMT) and changes in delivery states. The video emphasizes using high-impact news events to forecast volatility and pinpoint market direction, helping traders capitalize on range expansions. Key concepts like institutional order flow, premium and discount analysis, and price action patterns are explored to maximize trade opportunities.

Takeaways

• 😀 Understanding the **weekly profiles** helps traders anticipate market movements based on the weekly candle structure.
• 😀 The **economic calendar** plays a crucial role in determining which days will experience higher volatility and bigger range expansions.
• 😀 **Monday low of the week** is a common pattern, where the market opens at a key level, forms the low, and expands throughout the week.
• 😀 **Wednesday low of the week** typically aligns with high-impact news events, often signaling the start of market expansion later in the week.
• 😀 **Thursday low of the week** is characterized by consolidation, followed by a reversal once a high-impact news event triggers the market's move.
• 😀 To anticipate **weekly range movements**, use **buy/sell stops** in the range and adjust positions as the market approaches key levels.
• 😀 **Change in the state of delivery** is identified when the market shifts from bearish to bullish (or vice versa) based on key price actions and order blocks.
• 😀 **Order blocks** are critical for identifying potential market reversals and confirming a shift in market behavior, especially when combined with other indicators like SMT.
• 😀 The **combination of time and price** (e.g., economic events and key levels) should match for an effective trading strategy to work.
• 😀 **Smart Money Technique (SMT)** involves monitoring sell-side or buy-side inducements within the weekly profile to anticipate institutional buying and selling actions.

Q & A

What is the focus of Chapter 2 in this NASDAQ mini-course?

Chapter 2 focuses on an intermediate-term perspective of market analysis. It discusses how to trade using the weekly range, candle patterns, and profiles. Key concepts include using the economic calendar, determining weekly profiles, and trading strategies such as order pairing and identifying changes in the state of delivery.

What are weekly profiles, and how are they used in trading?

Weekly profiles refer to the way a weekly candle is formed based on daily price action patterns. These profiles are crucial in determining the market's behavior for the week, such as whether Monday will be the low of the week or if Thursday will see a reversal. By analyzing the economic calendar and price action, traders can anticipate which profile is likely to form and position themselves accordingly.

How does the economic calendar affect weekly market analysis?

The economic calendar is used to predict which days of the week are likely to have the largest volatility and range expansion based on scheduled news events. For example, high-impact news events can lead to significant price moves, especially on days like Wednesday or Thursday. By aligning this with weekly profiles, traders can better anticipate market behavior and make informed decisions.

What role does order pairing play in the weekly candle strategy?

Order pairing involves identifying buy stops and sell stops within the weekly range. For a bullish market, traders will look for a range low to be taken into a key level before targeting a range high. This helps establish the market’s direction, allowing traders to capitalize on movements when the market expands beyond these points.

What does the 'change in the state of delivery' mean in trading?

The 'change in the state of delivery' refers to a shift in market sentiment, typically from bearish to bullish or vice versa. This is identified when the market breaks above or below the bodies of specific candles in the order block, signifying a reversal or continuation in trend. The change in delivery marks a potential entry point for traders.

How do you identify a 'Wednesday low of the week' profile?

A 'Wednesday low of the week' profile is formed when the market begins higher from a key level, experiences retracement on Monday and Tuesday, and then creates the low of the week on Wednesday. This pattern is often followed by range expansion on Thursday and Friday. The economic calendar also plays a key role, as high-impact news events towards the end of the week often accompany this profile.

Why is Monday typically skipped when looking for a one-shot one-kill trade?

Monday is often skipped because it lacks high-impact news and sufficient data to anticipate the weekly profile accurately. The closure of Monday's candle provides better insights into potential weekly movements, which helps traders position themselves more effectively for the rest of the week.

What is SMT (Smart Money Techniques), and how is it used in the analysis?

SMT, or Smart Money Techniques, involves identifying institutional order flow and price manipulation. In the context of the weekly analysis, SMT helps traders recognize when the market is being driven by larger players, allowing them to align their trades with the institutions' movements. It is often used alongside changes in the state of delivery to confirm potential price moves.

What does the term 'premium' and 'discount' refer to in market analysis?

In market analysis, 'premium' and 'discount' refer to whether the market is overvalued or undervalued. A premium indicates the market is at a high price relative to its fair value, while a discount means the market is undervalued. Traders look for entries in the discount zone, as it typically offers better risk-reward ratios for long trades.

How can you use the weekly open and previous week’s range to predict the upcoming week’s movement?

The weekly open provides the baseline for analyzing the week's price action. By comparing the current week's price relative to the previous week's range, traders can predict whether the market will experience a continuation or reversal. For example, if the market opens near the previous week's low, it might indicate that a range expansion is coming, especially if there’s a relevant economic event scheduled.