Definition
"study the last 3 days the open the high the low and the close in the last 3 days... go back to the previous day's low... if we open up and because we're below those relative equal lows on the daily chart and we're below this swing low also we're now you know in a deep discount"
"this rebalances all of that selloff on Monday it's been rebalanced... it's gone up to a logical level on that daily time frame that rebalances all of that selloff on Monday"
"on the daily candle it's a large down day so all of this movement here is big in terms of distribution on the downside this is a retracement back up into a logical level which is Friday's low"
Prerequisites & Context
Market Bias Requirement
"we don't try to pick bottoms okay we don't try to call the long-term lows while markets are bearish you don't need to do that"
"the bias is bearish we have not changed gear we're not trying to pick the bottom"
Time Frame Requirements
"I taught that midnight starts to cross over to a new day at midnight... on Tuesday we start here the opening price is here"
"you have to understand what you're looking at relative to time and price when you do that it takes away all that confusion it provides more clarity"
News Embargo Timing
"at 8:30 we're looking for what to happen the news embargo to lift that means that the algorithm will start seeking liquidity as early as that time frame now it might wait till 9:30"
Structure & Pattern
Three-Day Lookback
"if this was Monday go back the last three days you go here here and here... go back to the previous day's low if you go back to the previous days low this is going to be important"
Rebalancing Process
"it opened extended down and closed near the low it was rather large range day... go back to the previous day's low... the next trading day which is Tuesday if we open up... it rebalances the big drop on Monday"
Liquidity Pattern
"here is relative equal highs old low what's resting above relative equal highs buy side liquidity what's resting below an old low sell side liquidity the market runs above at 930 it hits that old low that red line here that old low it hits that there right at 930"
Framework
A: Accumulation (8:30 Opening)
"if you look at it from the lens of power three how I teach you the accumulation at 8:30 use the opening price that's down here draw that out in time"
B: Manipulation (9:30)
"at 9:30 a.m. the equity Market opens that's what this little manipulation is okay what is 9:30 that's when you expect this little type of a move but it begins at 8:30 so that hourlong interal we're expecting when we're bearish a run higher to set up shorts"
"that's that Judas swing that fake rally up... this whole area shaded here that's the Judith swing that's the fake rally in a down move that will be profitable for shorts"
C: Distribution
Distribution Phase"then it creates the pattern that's in the mentorship fair value Gap Market structure shift then starts to show displacement and distribution to the downside attacking a discount array"
Displacement Leg
"I want you to go into that range here this right here that is your displacement price swing that right there that's the leg on a 5 minute chart you strip that down and you start going from five 4 3 two and one until you find your fair value Gap"
Entry Rules
Time Frame Drill Down Process
"this price swing here you shade that while you're learning and then you start breaking that down into the lower time frames so right now we're on the 5-minute chart... we're just going to transition from the F minute chart down to the 4-minute Chart"
Premium Requirement
"if you did that you were not following the rules because from this high down to that low this is equilibrium we need to get to a premium we don't want to sell in a discount that's not what we're doing here so we have to get to this level here 40 44 A2 or higher that's a premium based on that price swing"
Fair Value Gap in Displacement Leg
"so you drop down into your two-minute chart okay do you see a fair value Gap in the two-minute chart lo and behold the Unicorn here's the fair value got small little inbalance right in here and we took out the short-term low"
Entry Sequence
Entry Conditions"this movement lower creates that fair Bay Gap yes we have a short-term low taken out there okay this ENT on this fair value Gap"
Stop Loss Placement
"where would your stop loss be it would have to be at least above the candle that creates the fair value Gap that's this one here so your stop will be above here"
"the rule is you want to use the candle that creates the fair value get that high just above that okay one tick two ticks above that that's sufficient enough if you are scared and you just want to use a nice handsome ample stop you would use a swing hot here"
Market Psychology
Smart Money vs Retail Logic
"when we're operating in a bearish bias what we're essentially saying is the Market's going to go up to a premium for one of two reasons R an old high or highs to take out buy side liquidity so that way smart money can counterparty with them with their short positions they're going to sell to those buy stops then seeking to buy cheaper sside liquidity"
"they're going to sell here at a high price and buy it back at a cheaper price the second pool liquidity is the sell side liquidity"
Retail Trap
"it tricks people into thinking that it's made the low and it's going to keep going up when the only thing it has done is it's gone up to a logical level on that daily time frame that rebalances all of that selloff on Monday"
"retail Traders thinking it's created a low all the bullish diversion they would be seeing on their indicators and such they're they're screaming to buy and breakout artists are looking at this break here CU they think this is resistance broken now oh it's coming back down to it this is what is this resistance broken turn support right"
"retail is going to see that as it's breaking out it's going higher and they're going to want to buy it and Chase it and then they have their hinder Parts handed to them and then they just run the daily range against them to take out the cell side over here"
Buy Side First, Then Distribution
"this is really important folks if we would have gone down and took the previous low out then ran up here that to me is not bearish this running above B liquidity here at 930 hitting that without having this low taken out that is bearish because it's within the context of the bias that we're looking for"
"it runs the buy side first with the bearish buyas then seeks a discount"
Practical Rules
Stop Loss Management
"you cannot open a trade up like this and put a stop above here and watch it go down here and want to Trail your stop loss real tight you can't do that you have to hold with a certain measure of risk open initially when it opens the trade up"
When to Move Stops
"when do you start moving your stop well you want to see a larger shift in structure when this low is taken out down here then you can move your stop down say it was up here then you can move it to here okay or maybe here why because it's already broke down so it's not going to go down here and come back up here"
Accepting Wrong Trades
"I'm accepting the fact that probably going to be wrong if it stops me out but who cares if it does why would I have that opinion of not caring if it stops me out"
No Bottom Picking
"we don't try to pick bottoms okay we don't try to call the long-term lows while markets are bearish you don't need to do that"
Algorithm Timing
"midnight New York news embargo at 8:30 is lifted... this still the same logic relative equal Highs at 8:30 starts the algorithm what's it going to do it's going to run for a premium why because the bias is bearish"
Bearish Entry Setup Requirements
"the short can form inside that hour or it could just provide the leg that sets up the framework that will eventually like I'm going to show you here provide you the setup"
Study & Review
Click each card to reveal the answer (from transcript quotes)