Overview
"We're going to be dealing with specifically the institutional sponsorship and how to identify it in setups"
This lesson focuses on identifying institutional sponsorship in both long and short trading setups. The concept is built around recognizing specific price action criteria that indicate institutional involvement in the market.
Institutional Sponsorship in Long Setups
Key Identification Criteria
"Key to identifying institutional sponsorship and long setups is the notation of a higher time frame price displacement and that can come in the form of a reversal an expansion or a return to fair value"
"Higher time frame price displacement and that can come in the form of a reversal an expansion or a return to fair value"
"Intermediate term imbalance and price now this is a move to discount or a sell side liquidity run in other words the price is going to actually retrace or it can begin by going below an old low to run out the cell stops"
"Once one of these two occurrences appear in your chart the next thing you'll be looking for is short term buy liquidity above the marketplace now this is going to be ideal for pairing long exits to sell to"
"And obviously you're going to be looking specifically for time of day influence i.e london open for the low of the day or a new york session low formation"
"It's important understanding that number one and number two are the criteria which sets up the expectation for institutional sponsorship then we see the actual institutional sponsorship come in by way of attacking the marketplace for the buy side liquidity that would be resting above the marketplace"
The Three Criteria Structure
- Higher Time Frame Price Displacement (reversal, expansion, or return to fair value)
- Intermediate Term Imbalance and Price (move to discount or sell side liquidity run)
- Short Term Buy Liquidity Above Marketplace (ideal for pairing long exits, identified at specific times of day)
Institutional Sponsorship in Short Setups
"And obviously the opposite would be for institutional sponsorship in short setups"
Key Identification Criteria
"We were looking for again much in the same way we saw for the long setups it's in reverse higher time frame price displacement and that's going to come by way of a reversal or expansion or a return to fair value"
"Higher time frame price displacement and that's going to come by way of a reversal or expansion or a return to fair value"
"And an intermediate term in balance and price that's seeing price move to a premium or moving towards the buy side liquidity make a run on the buy stops"
"And then short term sell liquidity below the marketplace this is going to be ideal for pairing short exits to cover and obviously those sell stops we're going to be buying those from the counterparties in the marketplace"
"And just like we did with the long setups we would be looking for time of day influence i.e london open high of day or new york high formation"
The Three Criteria Structure
- Higher Time Frame Price Displacement (reversal, expansion, or return to fair value)
- Intermediate Term Imbalance and Price (move to premium or buy side liquidity run)
- Short Term Sell Liquidity Below Marketplace (ideal for pairing short exits, identified at specific times of day)
Framework & Criteria
"It's important understanding that number one and number two are the criteria which sets up the expectation for institutional sponsorship then we see the actual institutional sponsorship come in by way of attacking the marketplace for the buy side liquidity that would be resting above the marketplace"
The Setup vs. The Execution
- "Number one and number two are the criteria which sets up the expectation for institutional sponsorship"
- Criterion 1: Higher time frame price displacement
- Criterion 2: Intermediate term imbalance and price
- "Then we see the actual institutional sponsorship come in by way of attacking the marketplace"
- For longs: Attacking buy side liquidity above
- For shorts: Attacking sell side liquidity below
Time of Day Influence
"And obviously you'll see these characteristics come to fruition by studying the time of day influence now obviously you're not just studying it eventually you're going to be actually treating in the marketplace at these specific times of the day long and open new york session london closed and sometimes asia"
Key Trading Times Mentioned:
- London Open
- New York Session
- London Closed
- Sometimes Asia
Market Maker Perspective
"In other words we have buy stops typically above old highs when we're when we're short uh the assumption is and again i teach the role playing model that gives us the perspective of a market maker so you have to have that market maker perspective on price"
The Role Playing Model
"So we look to sell high but we have to find buyers that are willing to buy higher from us"
"So the criteria is we have to look for short-term buy liquidity above the marketplace now it's going to be layered by stops throughout the marketplace because it's there's all kinds of trading that goes on it's long-term sling trade short-term day trading scalping"
"But you have to look at the higher time frame for that short term buy liquidity to give us a framework to see if there is in fact institutional sponsorship in your setup"
Study & Review
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