IPDA Definition
"IPDA is the Interbank Price Delivery Algorithm"
"The IPDA data range okay you have a 20 day look back and cast forward range you have a 40 day look back and cast forward range and then you have a 60 day look back and cast forward range"
"If you understand that we're going to be referring to things that are numerical they are price related they are value based that means that we have to look at a specific level and price"
Purpose of IPDA
"What the IPDA data range okay what it's really doing is it's highlighting you as the trader you're going to try to mimic what this algorithm is doing it's looking for the liquidity in the range of 60 days in the past"
"The algorithm will look back 60 days and it'll find it's very easy if you if you know anything about computer programming and you don't even have to do that but just look at this first of november if you look back 60 days in the past what was the highest high in the last 60 days there's going to be buy stops above that high what's the lowest low in the last 60 days there's going to be cell stops below that low"
Quarterly Market Structure Shifts
"That's a quarterly market shift over the last three to six months that's the most obvious one you can clearly see it"
"Every three months there's going to be something like this occurring it could be a sell-off creating a high or it could be a a low where it starts to rally but every three months I want you to look at your charts and anticipate finding that in hindsight"
"Every three to four months or so we find it we identified the beginning of that month you gotta roll back to that first month why are we doing that why does it have to go back to the first month first of the month rather"
Identifying the Quarterly Shift
"If we look at back in november we can clearly see that there was a major market shift in november 2016. Now what that does it gives us a great deal of insight we can't take a time capsule travel back in time okay and be back in november and go short there but we can use the information that our daily charts are telling us there that means there was a great deal of displacement by the large players or smart money"
"It's really easy if you just divide your your daily chart into uh quarters like put one put a line on march put a line on uh june and september december and just keep doing that your your eye will go right to where these uh quarterly shifts are happening"
"They're not going to always occur on those months there's a little bit of gray area which is the reason why we have a look back and cast forward"
The 20/40/60 Day Methodology
Look Back and Cast Forward Explained
"When we find the clear market structure shift that happens every quarterly every three to four months or so we find it we identified the beginning of that month you gotta roll back to that first month"
"You're now identifying the beginning of november so you have to have a basis point where where is it where did it all begin because if you don't get yourself in sync with what IPDA most recently did"
"You're going to delineate where the most obvious one in the last three months has been then you're going to cast out 20 days go forward from the beginning of the the month that that market structure shift or quarterly shift takes place you're going to count out 20 days"
The 20 Day Range
"This is the look forward okay or cast forward of november this is 20 days out from the 1st of november so we have 20 days here inside of that 20 day range there's going to be a significant setup that you can use for your trading"
"It may not even be 20 days you may look at the chart and say hey this is an obvious one right here something's really going on if you do that you're really doing too much anticipation you got to go back to the most obvious one and it may require you going back three months but find the most recent one where the market structure has shifted"
The 40 Day Range
"You can go from the beginning of november to the 20th yes there was a price swing but using the information next stage would be 40 days out from that price point of november beginning we have here that is your 40-day lookout or cast forward"
"In the last 40 days what was the last highest high and what was the last lowest low looking back in the range to the left from that november red line that we're dealing in november where are the stops below and above those highs inside of the range of 20 days 40 days and 60 days"
"We had a small little range in here and then we came down and hit this level here 71.50 that's the 40 days out from the beginning of november framed on the quarterly shift that took place here"
The 60 Day Range
"Where is the sell stops in the last 60 days where are the buy stops in the last 60 days where are the fair value gaps where's the price gaps that price has not been efficiently delivered in the last 60 days"
"If you look back 60 days in the past what was the highest high in the last 60 days there's going to be buy stops above that high what's the lowest low in the last 60 days there's going to be cell stops below that low"
Visual Representation
Not Predicting Exact Turning Points
"I'm not telling you the market turns every 20 days every 40 days and every 60 days but it can and will sometimes do that what we're looking for is these quarterly shifts that take place once we identify one there's our beginning point"
"It's not always going to do like what you're seeing here where it's almost calling the very day it moves and makes the change it's you're allowing your study to say okay the price is going to move about 20 days and then we could see something if it doesn't happen in 20 days okay well in the next 20 days up to 40 days from where the market structure last shifted here quarterly then we're going to anticipate in the realm of the next 20 days it may happen"
How the Algorithm Functions
Computer Program Analogy
"If an algorithm and i'm not sure if any of you are aware of how computer programs are made or designed but when a systems analyst sits down with a company and they say okay look this is what i want the output to be or i need a a report generator that's it's going to give me this outcome or i need this information or i need this computation made i need this process done okay the system that's a system analyst is going to say okay what what data points are you making available to me"
"A computer program and a computer programmer is completely utterly blind and useless if he doesn't have data points to use you can't have a computer program do anything of any value unless it knows where to draw data points from there has to be an array of information coming to it to process and do calculations"
"My here's my this was my epiphany okay when i was sitting down with the folks that were introducing these ideas to me and know they're not in the teaching circuits you're never going to meet these people okay but when i was introduced on how the markets actually work and operate the the fast thing i the fastest and most obvious thing i learned was there was no ambiguity to how price moves around there was no randomness because they were talking about things that had a finite or origination where it wasn't like it could have been this day it could have been that year it could have been this month no no no no it's absolutely nothing like that"
Data Points Required
"The look pack period is 20 days 40 days and 60 days and what you're doing is and this is what i want you to do with your your time after today's teaching while you're waiting for today's daily recap video because there'll be two bits go up this is the teaching video for today"
"If it's a computer program or i'm quoting with my fingers now the interbank price delivery algorithm that computer program we're going to call it from this point on for this teaching for it to be effective it has to know where to look at to find stops"
"They don't see orders that's not what's going on they don't see orders the orders are executed on by the traders at the bank level the algorithm just permits the price to move to that level which gives the opportunity for the traders to execute on that run"
Finding Liquidity Pools
Buy Stops and Sell Stops
"If you look back 60 days in the past what was the highest high in the last 60 days there's going to be buy stops above that high what's the lowest low in the last 60 days there's going to be cell stops below that low"
"In the last 40 days what was the last highest high and what was the last lowest low looking back in the range to the left from that november red line that we're dealing in november where are the stops below and above those highs inside of the range of 20 days 40 days and 60 days"
"Because human nature says that we will as traders put our sell stop below a low and we will put a buy stop above an old high that's all the algorithms doing it's seeking to take price to that level"
What Happens When Levels Are Cleared
"What happens if there's a low that's really really obvious that's just outside the range of 60 days that's the farthest extreme that's when the open float will move aggressively and go outside that normal parameter of 60 days and you'll see that big run the market will jump and skip right down into that old low that's just outside that 60 day range"
"How do you know when it's going to be an explosive move michael when you have that scenario if the last 60 days if they've already ran out the the stops below and low in the last 60 days or above an old high in the last 60 days and there is a larger higher high or lower low where the stocks will be resting above or below respectively then you know there's going to be a big run on price"
"If everything's been wiped out above and below the marketplace in other words the open float all the buy stops above old highs and all the sell stocks below all those in the last 68 darn your look back in other words everything to the left of that november vertical line at red line if everything's been cleaned out above and below the highs and lows there's no more buy stops there's no more cell stops it has to create a new expansion"
Spike Behavior Explained
"When it gets to that level then your broker then the central bank can do a wild spike and send it above 10 to 20 pips think about it now 10 to 20 pips then becomes logical why they do those big spikes okay intraday 20 and 10 and 20 pips above and over high then it stops rate many times rate at 20 pips or 10 pips and then rejects it goes the other way"
"It first has to get to those levels based on a daily chart in the realm of a 20 pip 40 i'm sorry 20 day 40 day or 60 day look back and then cast forward"
Australian Dollar Case Study
Using the Futures Contract
"We have here a futures chart okay this is the march contract the underlying daily chart of the futures contract of the australian dollar"
"By looking at the futures contract if we're going to be trading forex okay it's it's really important that you know that you can get a lot of insight just by studying the underlying futures price"
"There are certain data points that you cannot get by looking at the foreign exchange market there's simply no way of getting that because foreign exchange doesn't give you volume it doesn't give you accurate volume like you can get volume from the underlying futures contract"
November Quarterly Shift
"The most recent market shift okay in the last three months occurred back in november"
"We know that we can see it because it's taken out an area of equal highs and we pierced above that taking out the buy stop liquidity pool and that's seen here that was the that was the basis and the framework around what caused the market structure shift that quarterly effect comes in to operation at that moment"
The 40-Day Example at 71.50
"We came down and hit this level here 71.50 that's the 40 days out from the beginning of november framed on the quarterly shift that took place here so we're anticipating a potential change in in the direction okay 20 40 or 60 days out"
"7150 is a significant level it's a mid figure level and it's happening at a time when inside of 40 days the if the data range is going to be looking to do something it has it has to do something every three months price is going to be pushed around it's going to be drawn to a level or it's going to repel from a level"
"I'll count you to go into your 4 hour 1 hour and 15 minute time frame and put up 7300 on your aussie dollar and see what you see there's nothing random about this stuff folks"
Price Response After 40 Days
"On this day here this is 40 days out from the beginning of november very significant price move occurred from that price 71.50 i mean i would think everyone if we were all in the same room if we raised our hand if we were in agreement i think the majority of us if not all of us would raise our hand say that's a pretty significant move off that level"
"It was not the 40th uh i'm sorry it wasn't the fact that it made the lowest low and turned on that day but look at the low in proximity to the lowest low that was formed here inside to see this day here was inside the range of 40 days back to this point price point here"
Practical Application Steps
Step 1: Identify the Quarterly Shift
"If we look at back in november we can clearly see that there was a major market shift in november 2016" (11:21)
"Every three months I want you to look at your charts and anticipate finding that in hindsight" (12:25-12:43)
Step 2: Roll Back to the First of the Month
"You're now identifying the beginning of november so you have to have a basis point where where is it where did it all begin" (15:29-15:35)
"You have to roll back to the beginning of that month it occurs in it occurred in the second week of uh of the month of november so we're now we're calibrated" (39:06-39:19)
Step 3: Count Forward 20, 40, 60 Days
"Then you're going to cast out 20 days go forward from the beginning of the the month that that market structure shift or quarterly shift takes place you're going to count out 20 days" (15:53-16:09)
"You can literally go on your daily chart in mt4 and change your date 60 days forward to make a vertical line and that way as price starts to paint you'll know you're approaching that 60 day" (29:46-29:58)
Step 4: Look Back for Highs and Lows
"You work just like the algorithm will in a 60-day range look back the last 60 days and then you watch going forward you cast forward 60 days" (29:27-29:40)
"Where's the lowest low in the last 20 days where's the last 40 days where's the lowest low in that range where's the highest high in that last range and you need to be noting those because that's the one that they're going to run they're going to run rate for those" (32:12-32:29)
Step 5: Monitor for Institutional Order Flow
"You look for evidences that that institutional order flow is going that direction then you know where it's going it gives you directional bias because of the higher time frame nature of this daily chart and weekly and monthly" (33:57-34:11)
Study Assignment
"I want you to spend your time this evening okay and even tomorrow while we're not doing any live session go back through your charts and don't just look at the australian dollar look at every currency pair look at every commodity look at individual stocks look at indices and you'll see quickly by studying this it will become quickly clear that there's no randomness to it there's a specific pattern that this thing does all the time"
Study & Review
Click each card to reveal the answer (from transcript quotes)