The Secret To Premium & Discount

Summary

In this advanced price action lesson, the video dives deep into market mechanics, focusing on dealing ranges and how liquidity, including buy and sell stops, drives price movements. It explains how markets seek liquidity in both higher and lower time frame ranges, influencing the price to react at key levels such as 50% of a dealing range. The video includes live examples from the presenter’s private Discord group to demonstrate how traders can predict price movements and calls trades based on this strategy. The goal is to show viewers how to anticipate market behavior by identifying and understanding range liquidity.

Takeaways

• 😀 The market is primarily driven by liquidity, especially the liquidity around old highs and lows, rather than purely by price action or PD (Price Displacement).
• 😀 Price action is often predictable in advance by understanding the liquidity pools and range behavior within higher time frame dealing ranges.
• 😀 A dealing range is defined by a swing low and high, and liquidity within these ranges dictates the price movement, especially around the 50% level.
• 😀 When price trades deep into a dealing range or fair value gap (FVG), it’s usually targeting liquidity in the form of stop orders (buy stops, sell stops) within lower time frames.
• 😀 The market may not react directly from an FVG but may go deeper into the range to hunt for additional liquidity before reversing or continuing the trend.
• 😀 Lower time frame ranges often exist within higher time frame dealing ranges. These smaller ranges hold liquidity that the market seeks before moving toward its intended destination.
• 😀 The market often seeks the range low before running for the range high, targeting buy stops and sell stops as liquidity pools.
• 😀 Even when price seems to react from a high time frame order block, it might actually be seeking liquidity within the range rather than respecting the exact order block level.
• 😀 Trades can be predicted using a combination of high time frame analysis (for broader market structure) and lower time frame analysis (for liquidity and entry points).
• 😀 Understanding how the market interacts with key levels and liquidity pools allows traders to predict and capitalize on price movement with more confidence.
• 😀 The market is fractal in nature, meaning the same concepts of liquidity-seeking behavior can be applied across different time frames (e.g., H1, 15-minute).

Q & A

What is the main concept covered in the video?

The main concept covered in the video is advanced price action trading, focusing on how the market moves within dealing ranges to seek liquidity at old highs and lows. The video explains how these movements can be predicted in advance and demonstrates real examples of trades called in a private Discord group.

What is meant by 'dealing ranges' in this context?

Dealing ranges refer to the space between a swing low and swing high, typically identified on a higher time frame. The market operates within these ranges and seeks liquidity—such as buy and sell stops—before making a price move. The deeper price moves into the range, the more likely it is to hunt liquidity within it.

Why does the market not always react from the 50% level in a dealing range?

The market doesn't always react from the 50% level because it is often seeking liquidity within the range, particularly buy and sell stops on lower time frames. The market might move deeper into the range to run these stops before reversing and continuing its trend.

What role does liquidity play in price action trading?

Liquidity is the primary driver of price movement in the market. The market seeks liquidity at old highs and lows, such as buy stops and sell stops. Understanding where liquidity lies within a dealing range allows traders to predict price movements and make informed trading decisions.

Can the concept of dealing ranges be applied to lower time frames?

Yes, the concept of dealing ranges is fractal and can be applied to both higher and lower time frames. On lower time frames, the market will still seek liquidity within a range, but the price movement will be smaller, and traders need to adjust their analysis accordingly.

What does the term 'FVG' mean in the video?

FVG stands for Fair Value Gap, which is a gap in price that occurs when there is an imbalance between buyers and sellers. This gap is often used as a potential entry point in price action trading, where the market may retrace to fill the gap before continuing in its original direction.

Why did the market in the Bitcoin example go deeper into the dealing range before reversing?

In the Bitcoin example, the market went deeper into the dealing range because it was seeking liquidity at a lower time frame range, particularly sell stops. The market doesn't care about the 50% level of the dealing range; it looks for liquidity within the range, which is why it overshot the expected reaction level.

How can traders predict price movements based on dealing ranges?

Traders can predict price movements by identifying the liquidity within a dealing range. By analyzing old highs and lows on both higher and lower time frames, traders can anticipate where the market will seek liquidity and whether price will react at specific levels, such as fair value gaps or order blocks.

What is the importance of the Discord group mentioned in the video?

The Discord group is important because it provides a live environment where the speaker calls out trades based on the principles discussed in the video. By showing real examples and providing educational support, the group offers a platform for traders to learn and apply these strategies in real-time.

Why does the market sometimes overshoot key levels before reversing?

The market overshoots key levels because it is seeking liquidity within a range. Even though a higher time frame key level, like an order block or fair value gap, may seem like the logical place for price to reverse, the market will often dip deeper into the range to hunt for stops before reversing to the range high or other key levels.