Master Institutional Supply and Demand Trading (ULTIMATE STRATEGY GUIDE)

Photon Trading
25 May 202317:23

Summary

TLDRThis video script delves into the art of mastering supply and demand for trading success. It reveals crucial insights into institutional order flow, explaining how to identify high-probability trading zones and enter and exit trades for maximum profit. The script dispels common myths about price movement, emphasizing the herd mentality of traders and the importance of recognizing patterns in market order flow. It also outlines methods for drawing supply and demand zones and stresses the significance of aligning with institutional trading flows for consistent profits.

Takeaways

  • πŸ“ˆ Understanding Supply and Demand: The video emphasizes the importance of mastering supply and demand to trade alongside large institutions and achieve consistent profits.
  • πŸ“Š Reading Institutional Order Flow: Learning to read institutional order flow is crucial for identifying high-probability trading zones and making informed trading decisions.
  • πŸ” Identifying Zones: The script explains how to mechanically draw supply and demand zones and find areas with a high likelihood of institutional trading activity.
  • πŸ“‰ Herd Mentality in Trading: The collective behavior of millions of traders can create a herd mentality, which can be identified on price charts and exploited for profit.
  • πŸ€‘ Market Manipulation: The financial markets are often manipulated, with heavy order blocks on both bid and ask sides, affecting the natural supply and demand balance.
  • πŸ›οΈ Two Types of Orders: The distinction between passive limit orders and aggressive market orders is key to understanding how markets move and how order flow is created.
  • πŸ“Š Order Book Dynamics: The script describes the order book, showing bids and offers, and how trades occur when buyers and sellers agree on a price.
  • πŸš€ Imbalance and Price Movement: Large institutional orders can cause rapid price movements due to the imbalance between supply and demand, which can be tracked on price charts.
  • πŸ”„ Market Cycles: The market operates in cycles, with order flow continuing in one direction until an overwhelming imbalance forces a shift, seeking new liquidity to rebalance prices.
  • πŸ“ Drawing Zones Consistently: The video outlines methods for consistently drawing supply and demand zones, including range, pivot, and fractal zones, to identify pivot points in price.
  • 🎯 High-Probability Trading: The script provides criteria for identifying institutional supply and demand zones, including factors like structure breaks, flip zones, and available liquidity.

Q & A

  • What is the main focus of the video on institutional supply and demand?

    -The video focuses on explaining what institutional supply and demand is, how to read institutional order flow, how to draw supply and demand zones, and how to trade with high probability zones for consistent profits.

  • Why do traders often exhibit a herd mentality in the markets?

    -Traders exhibit a herd mentality due to the emotional nature of trading, which is driven by fear, greed, and uncertainty. When millions of traders come together, their collective behavior can create patterns on price charts that can be exploited for profit.

  • How does the market operate in terms of supply and demand for currency exchange rates?

    -The market operates as a continuous auction where buyers and sellers compete to get the best possible price. Buyers bring demand, applying upward pressure on prices, while sellers bring supply, applying downward pressure.

  • What is the difference between passive and aggressive orders in the market?

    -Passive orders are limit orders that wait for the market to reach a certain price, while aggressive orders are traded at the current market price without waiting for the market to come to them, often crossing the spread to execute.

  • Why can't large institutions hide their order flow in the market?

    -Large institutions cannot hide their order flow because their trades create significant imbalances in the market, which are visible as footprints on price charts. This allows traders to spot their activity and trade with their order flow.

  • What is the significance of supply and demand zones in trading?

    -Supply and demand zones are areas on a price chart where orders are accumulated or distributed. They are significant because they indicate high probability areas for price movements and can be used to enter and exit trades with better risk-reward ratios.

  • How can a trader identify a high probability institutional demand zone?

    -A trader can identify a high probability institutional demand zone by looking for zones that led to a break of structure, are flip zones, have sweep and inducement characteristics, are stacked with higher time frame zones, have alignment with higher time frames, are well-priced, and are unmitigated.

  • What are the three main methods for trading from supply and demand zones?

    -The three main methods are setting a limit order directly on the zone, waiting for a reversal candlestick formation at the zone combined with a liquidation, or using a lower time frame break of structure for more confirmation and increased risk to reward.

  • Why is the fixed R method recommended for trade management?

    -The fixed R method is recommended because it targets the same amount of profit for each trade, which is a set and forget approach that minimizes emotions and helps keep the odds in the trader's favor in a probabilities game.

  • What is the importance of understanding multi-time frame analysis in trading?

    -Understanding multi-time frame analysis is important because it helps avoid losses by recognizing the power of time and the influence of higher time frames, which usually take precedence over lower time frames in market movements.

Outlines

00:00

πŸ“ˆ Understanding Institutional Supply and Demand

This paragraph introduces the concept of supply and demand in trading, emphasizing its importance for institutional trading strategies. It explains how the market functions like a continuous auction with buyers and sellers competing for the best price. The video promises to reveal critical insights into institutional supply and demand zones, which are vital for identifying high-probability trading opportunities. It also dispels common misconceptions about price movement and highlights the role of order flow in creating price action patterns that can be used for forecasting future price movements.

05:00

πŸ“Š The Dynamics of Market Imbalance and Liquidity

The second paragraph delves into the dynamics of market imbalances, explaining how aggressive buyers and sellers impact price movements until a new equilibrium is found. It discusses the concept of supply and demand zones within trading ranges and how these zones can lead to breakouts as the market seeks new liquidity. The paragraph also explains the importance of identifying and trading in continuation patterns, which follow the initial breakout and represent high-probability trades aligned with institutional order flow.

10:02

πŸ“š Mastering the Art of Drawing Supply and Demand Zones

This paragraph focuses on the technical aspect of identifying and drawing supply and demand zones on price charts. It outlines three types of zones: range, pivot, and fractal zones, each with its criteria and methods of identification. The paragraph also emphasizes the importance of finding a balance between refinement and practicality when drawing zones to maximize accuracy and risk-reward ratios while minimizing the risk of false signals.

15:02

πŸ” Identifying High-Probability Institutional Zones

The fourth paragraph provides a detailed guide on how to identify high-probability institutional supply and demand zones. It lists eight key criteria that must be met for a zone to be considered institutional, including structural breaks, flip zones, sweep zones, inducement, zone stacking, time frame alignment, well-priced zones, and untouched zones. The paragraph stresses the importance of confluence among these criteria to increase the probability of successful trades.

Mindmap

Keywords

πŸ’‘Supply and Demand

Supply and demand is a fundamental economic concept that describes the relationship between the quantity of a resource available and the desire for that resource among consumers. In the context of the video, it is used to explain the dynamics of price movements in financial markets. When there are more sellers than buyers (supply exceeds demand), prices tend to fall, and vice versa. The video emphasizes that understanding this balance is crucial for successful trading, as it can reveal high-probability trading opportunities.

πŸ’‘Institutional Order Flow

Institutional order flow refers to the trading activity of large financial institutions, which can significantly influence market prices due to the size of their trades. The video discusses how these institutions cannot hide their trading intentions because their large orders impact the market's liquidity and price levels. Traders can spot these footprints in the market and align their trades with the institutional order flow for potential profits.

πŸ’‘Price Action

Price action is the movement of prices in the market, reflecting the cumulative effect of all trading activity. In the video, it is mentioned that price action is created by the order flow, which is the result of millions of market participants placing orders for various reasons. Traders can analyze price action patterns to make informed trading decisions, as these patterns tend to repeat over time.

πŸ’‘Liquidity

Liquidity in financial markets refers to the ease with which assets can be bought or sold without affecting their price. The video explains that large institutions need sufficient liquidity to enter and exit trades with minimal slippage. Zones with high liquidity are more likely to result in significant price movements, making them attractive for institutional trading.

πŸ’‘Order Book

An order book is a list of buy and sell orders for a specific security, organized by price level. The video describes the order book as showing the volume demanded at each price level on the bid side and the volume supplied at each price level on the ask side. Understanding the order book helps in visualizing the market's supply and demand dynamics.

πŸ’‘Passive and Aggressive Orders

Passive orders are limit orders placed at a specific price, waiting for the market to reach that level. Aggressive orders, on the other hand, are market orders executed at the current market price. The video explains that the interplay between passive and aggressive orders creates order flow, which is key to understanding market movements.

πŸ’‘Pivot Zones

Pivot zones are areas on a price chart where there is a significant change in the direction of price movement, often caused by a single or a few candles. The video mentions that pivot zones can be used to identify potential turning points in the market, which can be crucial for timing trades.

πŸ’‘Range Zones

Range zones are areas on a price chart where the price action is confined within a specific range, indicating a period of accumulation or distribution. The video explains that range zones can be used to identify high-probability entry points for trades, as prices often return to these zones after a breakout.

πŸ’‘Fractal Zones

Fractal zones are smaller-scale zones within larger zones, reflecting the self-similar patterns that can be observed across different time frames. The video discusses how understanding fractal zones can help traders identify pivot points and potential entry points for trades on different time frames.

πŸ’‘Risk-Reward Ratio

The risk-reward ratio is a measure used in trading to evaluate the potential return of a trade against the risk involved. The video suggests aiming for a favorable risk-reward ratio by buying low in demand zones and selling high in supply zones, which can improve the probability of profitable trades.

πŸ’‘Fixed R Method

The fixed R method is a risk management strategy where traders set a consistent target return for each trade, such as a 3R return (where R is the risk). The video recommends this method for its simplicity and effectiveness in keeping emotions in check and ensuring that the odds are in the trader's favor over time.

Highlights

Mastering supply and demand is crucial for trading with large institutions and achieving consistent profits.

Price moves due to herd mentality in trading, influenced by emotions like fear and greed.

Order flow, driven by market participants' behavior, is what creates price action on charts.

Institutions cannot hide their order flow, which can be identified to trade profitably.

Currency exchange rates are determined by the agreement of buyers and sellers on a price.

Markets operate as continuous two-way auctions with bids and offers visualized on order books.

Understanding the difference between passive limit orders and aggressive market orders is key to grasping market dynamics.

Large institutional orders can cause rapid price movements as they absorb available supply or demand.

Supply and demand zones can be identified in sideways price movements within a range.

Price breakouts from ranges signal an imbalance between supply and demand, creating high-probability trading opportunities.

Traders should wait for price to return to a zone before entering trades to maximize risk-reward.

Supply and demand zones can be mechanically drawn using range, pivot, and fractal methods.

Certain criteria must be met for a zone to be considered an institutional supply and demand zone, including its impact on market structure.

Multi-time frame analysis helps in avoiding losses by confirming trends and potential reversals.

Fixed R method for trade management is recommended for consistent profitability.

The importance of identifying fresh zones that haven't been touched by the market for stronger trading signals.

Combining multiple confluences increases the probability of successful trades from identified zones.

Three main methods for trading from supply and demand zones include limit orders, reversal patterns, and lower time frame confirmations.

Transcripts

play00:00

if you can Master supply and demand you

play00:02

will be able to trade with the large

play00:03

institutions find big risk for all

play00:05

trades and Bank consistent profits in

play00:07

this video I'm going to share some vital

play00:09

points about institutional Supply

play00:10

demands that most people simply don't

play00:13

know and it's these critical points that

play00:14

have now helped countless of our members

play00:16

get funded and Bank their first ever

play00:18

profit splits this video explains what

play00:20

is supply and demand how to read

play00:22

institutional order flow how to

play00:23

mechanically draw the zones how to find

play00:25

high probability institutional zones and

play00:27

I'm going to drop some serious source

play00:29

for you here and finally how to enter

play00:31

and exit for maximum profit but first to

play00:34

take advantage of the market you must

play00:36

understand the true reasons as to why

play00:38

price moves does the price fall from

play00:40

here to there because there are more

play00:42

sellers than buyers nope this is wrong

play00:44

keep watching to find the truth now as

play00:46

history has repeatedly shown Traders are

play00:49

often a very emotionally charged group

play00:51

when millions of them get together in a

play00:53

highly emotional money game of fear

play00:55

greed and uncertainty their combined

play00:57

Behavior takes on a herd mentality and

play00:59

we can spot this on our price charts and

play01:01

make money from it how well you've got

play01:04

millions of Market participants putting

play01:06

millions of orders through the market

play01:07

for a million different reasons all of

play01:10

this behavior and participation is what

play01:12

drives the order flow that is put

play01:13

through the market and that order flow

play01:15

is what prints price action on our

play01:17

charts and that price action creates

play01:19

patterns these patterns repeat

play01:21

themselves over and over time and time

play01:23

again and that allows us to make high

play01:25

probability forecasts of where price may

play01:27

move in the future because when those

play01:29

big institutions enter trades they

play01:31

cannot hide their order flow and we can

play01:33

spot their footprints in the market if

play01:35

you know what to look for let me explain

play01:37

currency exchange rates move up and down

play01:39

as a result of supply and demand from

play01:41

Market speculators no trades can take

play01:44

place unless both the buyer and the

play01:46

seller agree on a price so this drives

play01:48

the price of currency pairs where buyers

play01:50

bring with them demand for the pair

play01:52

applying that upward pressure on prices

play01:53

while sellers bring Supply applying

play01:56

downward pressure on prices the market

play01:58

runs like a continuous auction

play01:59

throughout the day with buyers and

play02:01

sellers competing with each other to get

play02:02

the best possible price now in a perfect

play02:05

and free market this would be quite a

play02:07

smooth and fair process but in the final

play02:09

financial markets this is often a heavy

play02:12

manipulated process let me explain

play02:14

markets work in two-way auctions both

play02:16

buy and sell sides of liquid instruments

play02:18

or have blocks of orders on both the bid

play02:20

and the offers we can see this

play02:22

visualized on the order book on the left

play02:24

hand side you can see all of the bids

play02:25

from the buyers and this shows how much

play02:27

volume is demanded at each price level

play02:29

and then on the right hand side you can

play02:31

see all of the offers from the sellers

play02:32

as this is also called the ask price and

play02:35

this shows how much volume is supplied

play02:37

at each price level and the more volume

play02:39

that there is at each price level the

play02:40

more liquid the market is think of it

play02:42

like an auction house or Ebay where if

play02:45

you are the buyer then you are making

play02:46

bids for it and you either sell it it's

play02:48

the price you're offering it or the

play02:50

price you're asking for someone to pay

play02:52

for it now remember a trade can only

play02:54

take place if both the buyer and the

play02:56

seller agree on a price so to execute an

play02:58

order it must be paired with an opposite

play03:01

order of equal size for example so sell

play03:03

10 Lots there must be a buyer willing to

play03:05

buy them at the ask price and vice versa

play03:08

this is how the markets move now what

play03:10

most people don't know is that there are

play03:12

two types of orders where both buyers

play03:14

and sellers can be passive or aggressive

play03:16

passive Traders use limit orders and

play03:19

they are waiting for price to hit them

play03:20

so all of these orders that you see on

play03:22

the bid and the ask they are limit

play03:24

orders so if they were only passive

play03:26

orders then the market wouldn't move

play03:28

because all of those orders are waiting

play03:30

to be hit so this is where aggressive

play03:32

orders come into play aggressive buyers

play03:34

and sellers they are trading at the

play03:35

current market price and they are not

play03:37

waiting for the market to come to them

play03:39

but to do that they have to cross the

play03:41

spread to buy at the ask price or cross

play03:43

the spread to sell at the bid price most

play03:45

execution platforms look like this where

play03:47

you buy on the right hand side as that

play03:49

is the current ask price and you must

play03:51

cross that spread to be an aggressive

play03:53

buyer and if you want to sell then you

play03:55

must cross the spread to the left to hit

play03:56

the bid and it's this interplay between

play03:58

passive and aggressive orders is what we

play04:00

call order flow so let's take a look at

play04:03

a very oversimplified example of what

play04:05

can happen on the order book in a live

play04:07

market imagine this was the order book

play04:09

for euro dollar and a large institution

play04:11

wants to buy 10 000 Lots at Market so

play04:14

this is an aggressive order they have to

play04:16

buy 10 000 Lots at the best ask price

play04:19

but as you can see there are only 103

play04:22

lots available for sale at that current

play04:24

ask price so the price will rapidly

play04:27

shoot up as it instantly absorbs all of

play04:29

the supply at each level until all 10

play04:32

000 lots have been filled at 1.1539 due

play04:36

to that huge imbalance between supply

play04:37

and demand and now the market is sitting

play04:40

at what is deemed to be fair value

play04:42

between buyers and sellers so price has

play04:44

to keep moving up to search for enough

play04:46

liquidity to fill the order institutions

play04:48

cannot hide those huge imbalances that

play04:51

they cause in the market so if you know

play04:53

how to spot their footprints on a chart

play04:54

then you can trade with their order flow

play04:56

rather than getting smashed against it

play04:58

so what does this look like on a

play05:00

Candlestick chart here you can see price

play05:01

impulsively moving to the upside as

play05:04

aggressive buyers keep pushing price

play05:05

higher and higher until they find enough

play05:07

Supply to fill their demand and price is

play05:10

then rebalanced likewise here you can

play05:12

see aggressive sellers liquidating all

play05:14

of these bids pushing the price lower

play05:15

and lower until they have consumed

play05:17

enough demand to fill their supply and

play05:20

this is how markets move when there is

play05:22

an overwhelming imbalance between supply

play05:23

and demand price will keep moving to

play05:26

search for new liquidity to rebound its

play05:28

price and this is happening every single

play05:30

second that the markets are open now

play05:32

obviously you and me were not quite

play05:34

trading at the size big enough yet to

play05:35

move those big liquid markets so how do

play05:38

we make sure that we are trading on the

play05:39

right side of that institutional order

play05:41

flow and that's where supply and demand

play05:42

zones come into play but how do we

play05:44

identify these zones when prices moving

play05:46

sideways in a Range this is where orders

play05:48

are being accumulated or distributed as

play05:51

price moves into the bottom half of the

play05:53

range this is where buyers step in to

play05:55

buy at discount cheap prices and then as

play05:57

price moves into the top half of the

play05:58

range sellers step in to short at

play06:01

premium expensive prices you want to buy

play06:03

low and sell high right pretty simple

play06:05

eventually aggressive buyers will cause

play06:07

an overwhelming imbalance between Supply

play06:09

on demand and this is where price will

play06:11

rapidly break out the range to the

play06:13

upside to search for more liquidity to

play06:15

absorb the demand and this is what

play06:17

creates those demand zones now we don't

play06:19

trade the initial breakout as this is

play06:21

where losing Traders fomo into long

play06:23

positions and they buy the highs instead

play06:25

we wait for price to return to that zone

play06:28

and then we look for our entry models to

play06:30

get long as this is where the wrist

play06:31

reward will be on our side and we are

play06:34

buying where the institutions will be

play06:35

now why does price return to the zone

play06:37

and then continue from there well at

play06:39

this level there is not enough demand to

play06:42

keep pushing price higher so we wait for

play06:44

price to return to the demand Zone where

play06:46

there is previous institutional buyers

play06:47

they will have a vested interest to make

play06:50

sure that price does not trade any lower

play06:51

and they keep their initial long

play06:53

positions in profit and it's also likely

play06:56

that they did not get filled on all of

play06:58

their original position so they will

play06:59

want to get along with their remaining

play07:01

orders at these discounted prices

play07:03

because remember they're going to want

play07:04

to buy as cheaply as possible now there

play07:07

are some other theories but we won't get

play07:09

into those in this video and the exact

play07:11

opposite happens in the creation of

play07:12

Supply zones where prices in a Range

play07:14

sellers will then cause an overwhelming

play07:16

imbalance between supply and demand as

play07:18

price will rapidly break up to the

play07:20

downside but again we will wait for

play07:22

price to pull back to that Supply Zone

play07:24

to then look for potential shorting

play07:26

opportunities and it's a four-step

play07:28

process where we have the range the

play07:30

initiation the mitigation and the

play07:32

continuation and it's that continuation

play07:34

is what we are looking to trade in line

play07:37

with the institutional order flow this

play07:39

is the cycle and heartbeat of the market

play07:41

where order flow will continue in One

play07:43

Direction until there is an overwhelming

play07:45

imbalance between supply and demand in

play07:47

the opposite direction price is

play07:49

constantly seeking liquidity to

play07:50

rebalance price so here you can see

play07:52

price rapidly initiates out of the range

play07:54

to the downside creating a supply Zone

play07:56

it's likely this was backed by

play07:58

institutional involvement price then

play08:00

pulls back to mitigate the supply Zone

play08:01

where we can look to get short to catch

play08:03

the continuation you can see the sustain

play08:05

bearish order flow as Supply is clearly

play08:07

in control but markets are obviously

play08:10

don't move in One Direction Forever

play08:11

eventually the market moves low enough

play08:13

to discount prices where demand then

play08:15

comes into the market to overpower

play08:17

Supply then we see the sustained bullish

play08:19

order flow and institutions will defend

play08:22

the last levels that they entered at to

play08:23

keep their running positions in profit

play08:25

the highest probability trades will

play08:27

always be in line with autoflow so just

play08:29

don't bother trying to fight it so how

play08:31

do we mechanically draw supply and

play08:33

demand zones in the same way every

play08:35

single time there are three types of

play08:37

supply and demand zones the first two

play08:39

are the ones that I recommend you use

play08:40

these are range and pivot zones the

play08:43

names are pretty self-explanatory a

play08:45

range created zone is where price

play08:46

clearly initiates out of a range of

play08:48

candles you draw the Zone from the top

play08:50

to the bottom of the range a pivot zone

play08:52

is where there is a pivot in price

play08:54

caused by only one or two candles you

play08:56

can draw this from the single candle

play08:58

that is engulfed or you can include the

play09:00

second candle too depending on how

play09:02

refined you want to be for a supply Zone

play09:04

it's usually a bullish candle where the

play09:06

next thrust candle closes below its low

play09:08

this can be called a buy to sell zone

play09:11

for demand it's usually a bearish candle

play09:13

where the next thrust candle closes

play09:15

above its high and this can be called a

play09:17

cell to buy zone now I'm not personally

play09:19

that strict on the cell to buy or buy to

play09:21

sell method because sometimes I will

play09:23

draw a demand Zone on a Buddhist candle

play09:25

that's then engulfed by another bullish

play09:27

candle and vice versa because I'm just

play09:29

looking for those pivot Points in price

play09:30

you know where price has sort of paused

play09:32

and is moving sideways and then price

play09:33

clearly initiates out the range but for

play09:37

a demand Zone that thrust candle must

play09:39

close above the previous candle's high

play09:41

and for a supply Zone the thrust candle

play09:43

must close below the previous candles

play09:45

low for it to be a valid Supply Zone and

play09:48

you can see how a range Zone can be

play09:50

refined to a pivot zone or even a

play09:51

fractal Zone which is just the wick

play09:53

however more refinement does lead to

play09:55

increased accuracy giving you that

play09:57

smaller stop loss which in turn gives

play09:59

you that higher risk reward but it does

play10:01

increase the probability of more

play10:03

mistrates as price might not tag you

play10:05

into the position once enough orders

play10:07

have been filled find a consistent

play10:09

balance that works for you and stick to

play10:11

it so your Edge can play out in the long

play10:13

run you know don't be chopping and

play10:14

changing just because you feel like it I

play10:16

recommend that you start with always

play10:18

looking to take the single candle pivot

play10:20

as this gives the best balance between

play10:21

risk's reward and also getting entered

play10:24

into enough positions now remember that

play10:26

the market is made up of all of those

play10:28

orders transacting with each other but

play10:30

we make sense of that complicated order

play10:31

flow with our Candlestick charts if you

play10:34

see a range Creator Zone on one time

play10:36

frame this will be a pivot Zone on a

play10:38

higher time frame so if you see this

play10:40

range Creator Zone on let's say the one

play10:42

hour chart the zone is made up of four

play10:44

candles but if you go up to the four

play10:46

hour chart what do you think that zone

play10:48

is going to look like you guessed it it

play10:50

will be a single candle four hour pivot

play10:53

Zone because for one hour candles are

play10:56

going to make up one for our candle so

play10:58

when you truly understand the fractal

play11:00

nature of markets you don't even need to

play11:02

change time frames to be able to

play11:03

visualize what price action will look

play11:05

like on that other time frame so that's

play11:07

why a lower time frame range will be a

play11:09

higher time frame pivot Zone and vice

play11:11

versa here are three types of fractal

play11:13

supply and demand zones the first is an

play11:14

inside bar this is when a candle fails

play11:17

to break the previous candles high and

play11:18

low and it trades inside of it inside

play11:20

bars are a range on a lower time frame

play11:22

the second type of fractal zone is sell

play11:25

to buy or buy to sell wixoms foreign

play11:28

when price is bullish and moving to the

play11:30

upside it looks like there isn't a

play11:32

demand Zone because price doesn't form a

play11:34

pullback on that time frame but those

play11:35

Wicks represent a pullback on a lower

play11:37

time frame as you can see price moves to

play11:39

the upside then it pulls back as the

play11:41

next candle starts to form and then

play11:43

pushes up again so if you were to look

play11:45

down on the lower time frame this will

play11:47

be a lower time frame pivot or range

play11:49

created demand and the exact opposite

play11:51

happens for buy to sell Wick zones which

play11:53

represent lower time frame Supply the

play11:55

third type of fractal zone is where you

play11:57

have a very large width and instead of

play11:58

drawing the big pivot Zone you can

play12:00

refine it to just the wick of the candle

play12:02

as this will be a lower time frame pivot

play12:04

or range zone now as all of those are

play12:06

fractal refinements they are simply a

play12:08

way of looking at lower time frame zones

play12:10

on your time frame so I would actually

play12:12

recommend that you kind of ignore those

play12:14

for now and you just concentrate on the

play12:16

pivot and range zones on that same time

play12:18

frame that you're looking at because

play12:20

those will contain the most orders and

play12:22

therefore should give you those higher

play12:24

probability moves now obviously not all

play12:26

Supply demand zones are created equal

play12:28

there are very specific criteria that

play12:31

must be met for it to be an

play12:33

Institutional supply and demand Zone

play12:34

there are eight key areas for us to

play12:36

focus on and the first is whether the

play12:38

Zone led to a break of structure this is

play12:40

the simplest and most effective filter

play12:42

that you can use it takes a ton of money

play12:44

to break structure on a liquid

play12:45

instrument and the more significant that

play12:47

the structure it breaks the more

play12:49

significant The Zone swing structure is

play12:51

stronger than internal which is stronger

play12:53

than fractal so zones that cause a break

play12:55

of spring structure they're going to be

play12:57

the most likely ones to cause the next

play12:58

break of Swing structure here you can

play13:00

see this demand Zone broke the daily

play13:02

swing high so then when price returns to

play13:04

Zone there is enough demand within there

play13:06

to break the neck swing High number two

play13:08

is if it is a flip zone now the key here

play13:11

is that you must see that interaction

play13:13

between supply and demand until one

play13:15

overpowers the other here you can see

play13:16

supplier was in control but when price

play13:18

returns to it Supply tries to make a

play13:21

lower low but it fails to do its job

play13:23

because huge demand steps into the

play13:25

market to overpower it that pattern that

play13:27

shows us that supply has now flipped to

play13:29

demand and this is a high probability

play13:31

area for us to get lots but remember you

play13:34

must see that interaction first for it

play13:36

to be valid number three are sweep zones

play13:38

these are zones where liquidity is swept

play13:40

and taken as they are created but why is

play13:43

this important well remember

play13:44

institutions need opposing liquidity for

play13:47

them to trade against so that they can

play13:49

get minimal slippage when they enter and

play13:51

exit the market so if they're buying

play13:52

they need a lot of Supply to buy against

play13:54

there will be a lot of sell orders below

play13:57

this low and that's generated from

play13:59

people's stop losses from early buyers

play14:00

and then breakout traders who are trying

play14:02

to sell that low but the institutions

play14:04

know this and they will use that cell

play14:06

size liquidity behind that low in order

play14:08

to get long so if you see a sweep Zone

play14:10

this signals it was created with

play14:12

institutional involvement number four is

play14:14

inducement and this is another liquidity

play14:16

concept that can get very technical but

play14:19

essentially you just want to see is

play14:21

there available liquidity in front of

play14:23

the zone why well same reason as before

play14:25

institutions are going to need need that

play14:27

opposing liquidity to enter the market

play14:29

with minimal slippage here you can see

play14:31

there is available liquidity behind this

play14:33

low for institutions to use to buy

play14:35

against but if there isn't any available

play14:36

liquidity then very often these zones

play14:39

are trapped and they will usually fail

play14:40

here you can see that there is

play14:42

absolutely no available liquidity in the

play14:44

leg so this is a very obvious trap as

play14:46

institutions will not be selling it

play14:48

number five is the Zone stacked with

play14:50

another higher time frame Zone the more

play14:52

you can stack zones across time frames

play14:54

the more orders there should be in that

play14:55

area increasing the probability of the

play14:58

move number six do you have alignment

play15:00

with the higher time frames because the

play15:01

more time frames that you have aligned

play15:03

the higher probability of that trade

play15:05

here it might look like a high

play15:06

probability cell to follow the bearish

play15:08

trend on the M5 but the M15 is bullish

play15:11

and it's just mitigated the M15 demand

play15:13

at the strong M15 low so now the M5 is

play15:16

likely to also switch bullish

play15:18

understanding multi-time frame analysis

play15:20

will help you to avoid a ton of losses

play15:22

as time is power and higher time frame

play15:25

will usually win number seven is The

play15:27

Zone well priced generally the highest

play15:29

probable demand zones will be buying in

play15:31

discount prices which is in the bottom

play15:33

50 of the range or selling premium

play15:35

prices in the top 50 of the range this

play15:38

also improves your risk rewards because

play15:40

we want to buy low and sell high right

play15:41

and last but not least number eight is

play15:44

the Zone unmiticated it's just a fancy

play15:46

way of saying is the Zone completely

play15:48

fresh or has it already been touched

play15:49

because if you see a Zone with touches

play15:52

then it's very likely that a lot of the

play15:54

resting orders within that zone have

play15:56

already been filled so I try to focus on

play15:58

zones that are completely fresh as these

play16:00

usually give the strongest move when

play16:02

price mitigates them now combining as

play16:04

many of those confluences together are

play16:06

going to give you the highest probable

play16:07

institutional demand zones to trade from

play16:09

so now you know how to identify high

play16:11

probability zones how do you actually

play16:13

trade from them well there are countless

play16:15

ways but here are three main methods the

play16:18

first one is just simply setting a limit

play16:20

order directly on the Zone the second is

play16:23

to wait for a reversal Candlestick

play16:24

formation at the Zone but this is best

play16:26

combined lined with a liquidation too or

play16:28

finally you can use a lower time frame

play16:31

break of structure for more confirmation

play16:33

and increase risk to reward we will

play16:35

cover entry models in Far More depth in

play16:37

a later video so make sure you subscribe

play16:39

so you don't miss that but before you're

play16:41

even going to enter a trade you should

play16:42

know exactly how and where you're going

play16:44

to exit now I could do a whole series on

play16:46

just train management alone but in my

play16:48

opinion if you want to get consistently

play16:50

profitable as soon as possible my

play16:52

recommendation is to always use the

play16:54

fixed R method so this is where you

play16:56

always Target the same amount such as 3r

play16:58

for example it's a set and forget

play17:00

approach that helps to keep emotions

play17:02

very low as you're not chopping and

play17:04

changing between arbitrary technical

play17:05

targets at the end of the day trading is

play17:07

purely a probabilities game and the

play17:09

fixed our method just helps to put the

play17:11

numbers in your favor now watch this

play17:13

next video in the series to see a full

play17:15

walkthrough of how we trade

play17:16

institutional zones in depth and if it

play17:19

isn't live to share make sure you hit

play17:20

that subscribe button so you don't miss

play17:22

it

Rate This
β˜…
β˜…
β˜…
β˜…
β˜…

5.0 / 5 (0 votes)

Related Tags
Trading StrategiesSupply DemandInstitutional FlowMarket AnalysisOrder FlowPrice ActionRisk ManagementProfit StrategiesFinancial MarketsBehavioral Trading