The Next Setup - Anticipatory Skill Development

Using institutional order flow to help you find new setups

Definition

"This teaching is going to be specifically dealing with using institutional order flow to help you find new setups" (0:50-0:55)

"One of the skill sets that I teach is using the monthly chart" (0:41-0:48)

Monthly Chart Foundation

Smart Money vs Retail

"The monthly charts are only going to move with a great deal of money behind these price swings and retails I'm not going to have it" (1:06-1:18)

"The idea of seeing big ranges on a monthly chart that's going to be a result of enormous amounts of buying or selling interest by the smart money. Again retail can't move price" (1:18-1:32)

Study Requirements - OHLC Analysis

"I want you to think about the opens the highs the close and the low of every single candle on a monthly chart over the last three months" (1:46-2:00)

"Every pair that you have on your platform this is a good study not to trade every single pair but I want you to go back over every pair you think is of interest to you and have the open high loan closed delineated on a monthly chart over the last three months" (2:00-2:17)

"Having those reference points on your chart and having those levels transposed into your lower time frames they'll bring a great deal clarity" (2:25-2:37)

Range Identification Method

Step 1: Find Most Recent Down Candle

"I want you to find the most recent down candle" (2:46-2:49)

Step 2: Find Prior Up Candle Above Its High

"Prior to this down candle what up candle exists above it. So much if this is the down candle you got to go above its high" (2:57-3:07)

"So we have to have an up candle or an up close candle that has at least a low that's higher than [the down candle's high]" (3:17-3:24)

The Range is Defined

"Just that quick we've delineated a range on the monthly chart" (3:37-3:41)

"All you have to do is find the most recent down candle and most recent up candle and there's your range" (8:15-8:22)

Range Identification on Monthly Chart August September October Now Up Candle Most Recent Down Candle High of Up Candle Low of Down Candle RANGE Step 1: Find most recent down candle Step 2: Find prior up candle above its high "There's your range"

Order Block Activation Rules

Bullish Order Block Activation

When Down Candle is Broken 4:50-4:54, 9:47-9:54

"So now we have activated two down candles as a bullish order block" (4:50-4:54)

"The idea as soon as this candle trades above the down candle's high, this down candle becomes a bullish order block. So we can be a buyer at [the down candle's low] or less" (9:47-9:59)

Bearish Order Block Activation

When Up Candle is Broken 8:30-8:34, 14:26-14:32

"If you have a market trade up into an up candle you find the last down candle, the most recent down candle which will be over here that would be a range for the downside" (8:30-8:43)

"Or has price broken an up candle by violating its low which then activates that as a bearish order block" (14:23-14:32)

Trading the Activation

"If you get the market trade above a down candle you wait for a return back to that down candle to trade up into the last up candle" (8:22-8:28)

Order Block Activation Bullish Order Block Down Candle Price breaks above high NOW: Bullish Order Block Wait for return BUY "As soon as this candle trades above the down candle's high, this down candle becomes a bullish order block" (9:47-9:52) Bearish Order Block Up Candle Price breaks below low NOW: Bearish Order Block Wait for return SELL "Has price broken an up candle by violating its low which then activates that as a bearish order block" (14:23-14:32)

Top-Down Approach

Timeframe Cascade

"If I take these two reference points and I'll drop them down into a weekly chart... by having it on a weekly chart we can have a lot more information refined" (3:57-4:09)

"You take those levels and you find them down until weekly into a daily and down to an hourly chart" (14:39-14:45)

Refining Risk on Lower Timeframes

"We're using the monthly chart to give us our bullish and bearish order blocks and define our range and then we look for lower time frames to get closer to the market and refine our risk" (13:48-14:00)

"Use the higher time frame monthly chart find the most recent up candle and most recent down candle there's your range" (14:00-14:06)

Top-Down Approach: Monthly → Weekly → Daily → Hourly MONTHLY Find most recent up candle and down candle = RANGE Drop to WEEKLY More information refined See order block activation Drop to DAILY Refine entry Find precise order block levels Drop to HOURLY Refine risk TRADE "We're using the monthly chart to give us our bullish and bearish order blocks and define our range and then we look for lower time frames to get closer to the market and refine our risk" (13:48-14:00) "It's basically a top-down approach that leads you right into trade setups that you otherwise wouldn't know they were there" (15:05-15:12) The Process: 1. Monthly: Define range (most recent up and down candle) 2. Weekly: See order block activation 3. Daily & Hourly: Refine entry and risk

Trading Examples

USD/CAD - Bullish Example
300 Pip Range, 138 Target 3:44-8:03

Range Definition

"We defined is the range in which we're going to trade in" (3:50-3:55)

Order Block Activation

"These two down candles here, price trades through it on this candle here. So now we have activated two down candles as a bullish order block" (4:43-4:54)

Entry Level

"The monthly candle at 130 70 we'll call it 130 80... price drops down into that a couple different times and you see price is expanded" (5:06-5:26)

"We looked at 132.80 as a downside objective... based on these two down candles here and the fact that we are looking for higher prices" (7:08-7:21)

Target

"We're looking for 138 big figure and potentially higher than that" (7:53-7:59)

USD/JPY - US Election Buy
300 Pip Range 9:07-11:30

Range Identification

"We have the most recent down candle here... and prior to this down candle you have to have a candle that's higher than the candle's high which is 104 35. So above here to the left where's the up candle it's here" (9:07-9:34)

"There's your range so between 106 28 and 103 26 so basically 300 pips" (9:39-9:47)

Bullish Order Block Activation

"The idea as soon as this candle trades above the down candle's high, this down candle becomes a bullish order block. So we can be a buyer at 103.26 or less" (9:47-9:59)

Entry on Election

"Here's price trading below 103 26 and again here on the us election trading down into the bullish order block" (10:05-10:15)

"Price dips down into it here this will be a buy. It starts to rally away then the next candle opens on the election, trades down into previous bullish order block this would be another buy and rallying away" (10:56-11:11)

Target Achievement

"On the monthly chart this is the objective we would be reaching up to and we've already seen that happen with 300 pips plus" (11:24-11:30)

NZD/USD - Bearish Example
120 Pip Objective 11:32-13:48

Range Identification

"We have the last down candle here and the most recent up candle here. And we've moved away from the last stop candle exercising this as a bearish order block" (11:46-12:08)

Weekly Chart View

"You see price trading up into bear shoulder block it does trade through the body of this candle but it's rather sloppy right now" (12:15-12:22)

Downside Objective

"The downside objective is 69.83 so 6985. The bodies of these candles here closed comes in at 70.05 so that would probably be where I would be looking to cover. It's about 120 pips or so still potential downside objective" (12:22-12:39)

Daily Chart Refinement

"This is the bearish order block up in here so anything above that price had reached up into we can refine that into a lower level time frame bearish overblock" (13:10-13:20)

Core Philosophy

Top-Down Approach

"It's basically a top-down approach that leads you right into trade setups that you otherwise wouldn't know they were there" (15:05-15:12)

Know Your Levels Before Trading

"It gives you a context to actually look into the marketplace with a specific mindset not just waiting for a neon sign to jump off at you and say okay well I wonder what I should do today. You'll know what levels to trade off of relative to the monthly chart" (14:50-15:03)

Plethora of Opportunities

"You can see there's a plethora of opportunities to to study with all these different pairs" (14:43-14:50)

The Value of the Method

"By itself you've done a great deal already but I know you don't believe it you have to see it you need to have faith in it" (3:44-3:53)

"If we can see where they're most likely going to place orders to buy or sell and we can see on the monthly chart we stand to make a great deal of pips and we don't have to trade a whole lot to do it" (1:34-1:45)

Study & Review

Click each card to reveal the answer (from transcript quotes)

Who can move monthly charts?
"The monthly charts are only going to move with a great deal of money behind these price swings and retails I'm not going to have it... retail can't move price" (1:06-1:32)
What OHLC data should you study on monthly charts?
"The opens the highs the close and the low of every single candle on a monthly chart over the last three months" (1:46-2:00)
What is the first step in range identification?
"Find the most recent down candle" (2:46-2:49)
What is the second step in range identification?
"Prior to this down candle what up candle exists above it. So much if this is the down candle you got to go above its high" (2:57-3:07)
How quickly can you define a range using this method?
"Just that quick we've delineated a range on the monthly chart" (3:37-3:41)
What is the complete range identification method?
"All you have to do is find the most recent down candle and most recent up candle and there's your range" (8:15-8:22)
When does a down candle become a bullish order block?
"As soon as this candle trades above the down candle's high, this down candle becomes a bullish order block" (9:47-9:52)
Where can you buy when a down candle becomes a bullish order block?
"So we can be a buyer at [the down candle's low] or less" (9:54-9:59)
What do you do after the market trades above a down candle?
"If you get the market trade above a down candle you wait for a return back to that down candle to trade up into the last up candle" (8:22-8:28)
When does an up candle become a bearish order block?
"Has price broken an up candle by violating its low which then activates that as a bearish order block" (14:23-14:32)
What timeframes do you drop to from the monthly chart?
"You take those levels and you find them down until weekly into a daily and down to an hourly chart" (14:39-14:45)
What benefit do you get from dropping to a weekly chart?
"By having it on a weekly chart we can have a lot more information refined" (4:07-4:11)
Why use lower timeframes after identifying the monthly range?
"We're using the monthly chart to give us our bullish and bearish order blocks and define our range and then we look for lower time frames to get closer to the market and refine our risk" (13:48-14:00)
What was the range size on USD/JPY example?
"Between 106 28 and 103 26 so basically 300 pips" (9:39-9:47)
What was the downside objective on NZD/USD?
"The downside objective is 69.83 so 6985... about 120 pips or so still potential downside objective" (12:22-12:39)
What target was identified for USD/CAD?
"We're looking for 138 big figure and potentially higher than that" (7:53-7:59)
What approach leads you into trade setups?
"It's basically a top-down approach that leads you right into trade setups that you otherwise wouldn't know they were there" (15:05-15:12)
What should you know before the trading day starts?
"You'll know what levels to trade off of relative to the monthly chart" (15:01-15:05)
What mindset does this method give you?
"It gives you a context to actually look into the marketplace with a specific mindset not just waiting for a neon sign to jump off at you and say okay well I wonder what I should do today" (14:50-14:58)
How many opportunities does this create?
"You can see there's a plethora of opportunities to to study with all these different pairs" (14:43-14:50)
What is the result of doing this range analysis?
"By itself you've done a great deal already but I know you don't believe it you have to see it you need to have faith in it" (3:44-3:53)
What is the trading benefit of seeing where smart money places orders?
"If we can see where they're most likely going to place orders to buy or sell and we can see on the monthly chart we stand to make a great deal of pips and we don't have to trade a whole lot to do it" (1:34-1:45)