Market Structure

Market structure is the overall flow of the market and provides us with a framework to read and
understand price. Understanding the market structure of price means knowing the behavior of the price
and where price is going to go. The market moves in one of three ways: up (bull trend), down (bear
trend) and sideways (consolidation).

Understanding structure in the markets is paramount to knowing the difference between a retracement
and an impulse.

🎯 Bullish Market Structure

Bullish market structure simply put is the creation of higher highs and higher lows in succession. A
higher low is confirmed once the previous high is broken which then goes on to create a higher high. It is
our job as traders to identify breaks of structure (highs) and wait patiently for a higher low to form if we
are looking to enter a buy position.

🎯 Bearish Market Structure

Bearish market structure simply put is the creation of lower lows and lower highs in succession. A lower
high is confirmed once the previous low is broken which then goes on to create a lower low. It is our job
as traders to identify breaks of structure (lows) and wait patiently for a lower high to form if we are
looking to enter a sell position.

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Structure is Highs and Lows, LHs and HLs.

Highs and Lows are structural swing points, these swing points are fractal meaning they will be present
on multiple timeframes.
● When looking at swing points - Think Timeframes!

Understand the swing points, these give a frame to observe price delivery.

The examples below show how price delivery works across multiple timeframes and prints swing points
to frame structure following BFI intentions. ( banks and institutions = whales )
Order Blocks

Order blocks are found all over a price chart on all timeframes. An order block simply indicates a large
grouping of orders placed at a specific price level.

The sheer size of these orders causes the price to impulsively move away due to the large volume being
traded.

A key thing to note about order blocks is that the impulsive move should break structure to be
considered valid and high probability.

Institutions that place large orders often are not able to facilitate their full positions at one time before
the price rapidly moves away.

Because of this, price gravitates back to these order blocks to facilitate the remaining orders only once
the supply/demand is rebalanced from the initial order.

Because price rapidly moves away from that area it forms an imbalance in price as it needs to seek
liquidity.

Price will eventually gravitate back to that order block to collect the final liquidity resting at that area
before continuing in the direction of the impulse that created the order block
Orderblocks have various names associated with them but at the end of the day they are all the same
concepts - large orders being placed in the markets.

They can also be referred to as Sponsored Candles (SC), Institutionally Funded Candles (IFC), Punch
Candles, Supply & Demand zones, etc.

We use orderblocks as a framework to enter trades either long or short depending if it is a bullish or
bearish orderblock.

We are able to base an entry at either the distal or equilibrium point on the orderblock - this ultimately
comes down to personal preference and is based on your own testing.

The stop loss of the trade should be placed at the distal point of the orderblock with a potential buffer in
pips (spread).
We are looking to execute buy entries when price retests the bullish orderblock.

We can either set a buy limit order at the proximal line or at the equilibrium point (50%) of the
orderblock.

The stop loss for the trade will be placed below the distal line of the bullish orderblock.

We are looking to execute sell entries when price retests the bearish orderblock.

We can either set a sell limit order at the proximal line or at the equilibrium point (50%) of the
orderblock.

The stop loss for the trade will be placed above the distal line of the bearish orderblock.

Q: How long is an OB valid for?

A: An OB can be valid for a very long time unless it's already been mitigated/depleted. Remember- an
OB

is created because there wasn't enough liquidity to fill all the orders before a break of structure.

Price will want to come back to pick those leftover orders and continue the movement.

You can watch PA through orderblocks. As you can see, not every order block is valid.
But if you add on your oderblock big impulsive imbalances, it will increase the success of order blocks.
Q: Which order blocks should I focus on in the beginning?

A: We recommend you start looking for POI with the HTF - 1H OB and refining to the 15M.

It's important to understand HTF structure before all else so 4 OB can also be beneficial.

Once you have confidence in the HTF OBs with refinement to the 15m then you can start diving into LTF
entries such as the 5m or 1m.
Q: What do you do with previous OBs if price never went back to tap them?

A: I like to focus on the most recent blocks before the ones further away but I factor in the HTF to get a
better understanding of what price is likely to do.

(HTF POI, inefficiency & market structure)

I would look to enter on block IF price on the HTF is showing momentum to the downside, especially if

we recently broke structure to the downside.

IF price on the HTF seems to be struggling or not really moving strongly to the downside I would likely
wait for price to move.

In some cases you may miss a trade because you decide not to set an order because of the HTF or you

may take a loss because it doesn't respect that orderblock.

Not all orderblocks are going to work 100% of the time so it's important to keep that in mind - the large
RR on the trades that we are taking more than

makes up for it so don't be afraid to take a few losses.

If there is a block you are uncertain about but want to take it anyway, consider using reduced risk

(there is nothing wrong with taking a trade at 0.25-0.50% risk rather than 1% - worst case you lose a
small

amount, best case you make a slightly reduced amount of profit; but profit is profit)

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Vertex explanation

Using order blocks is all about understanding the story behind each trade and

understanding why order blocks exist and how they are used.

Understanding this will change your perspective in how you view the markets.

Order blocks (OB) are areas where Institutions are either buying or selling from,

these blocks are formed prior a large impulse to an already pre planned direction.
The reason we trade order blocks, is because for the institutions to make a move

they need to grab liquidity first, this is from retail traders stop losses, where many retail traders call it
'stop hunts'.

So institutions drive price to grab this before creating their desired move. Institutions do not use Stop
losses, which

means although they have moved the market how they would like, they still have

a trade going the opposite way in heavy drawdown.

So they drive price back down to mitigate their orders then continue the move.

This is where we come in with our strategy. We look to enter at this mitigation and follow price with
them.

This strategy is not overly difficult however requires practice to understand how OBs work.

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HOW TO TRADE USING ORDERBLOCKS

First stage is identifying your higher time frame directional bias.

Whether you are looking for intraday or Swing entries you still need to

understand which way the market is moving for the pair that you are focusing on.

Essentially you want to identify Order blocks from weekly down to the hourly and

work off there.

However, the more experience you gain, you may find that you can trade intraday moves by having a
short term directional bias from lower time

frames and finding entries on an even lower time frames.

Either way, the concept is exactly the same.

From above we can see a clear break of structure, this is the first thing we look

for before looking for OBs.

Reason for this, we want to find the candle that created this move, this candle is our OB.

The OB is generally the last opposing candle before the move.

So if its a bearish break, the OB is a Bullish candle.

However, we need to understand what kind of BOS we look for and how to refine our OBs.
HOW TO REFINE ORDER BLOCKS

As we can see above, the blue candle following the OB hasn't overly moved or

broken the range of the OB. This is now our refined OB. You can do this on all time frames.

Alternatively, you can locate your OB, and you can refine down the time frames and find a clear open OB
within the OB.

that big White candle is our OB, however within that candle on a lower time frame, there is a clear OB

and this is now our refined OB.

You can go down by as many time frames as you like.

TIP: If you are happy with the RR from a particular time frame OB, then Simply use that one.

Don't get greedy and don't

use lower time frames if it makes you anxious.

SAFE ENTRY

Identify your Point of interest on the higher time frame.

In this example it was the hourly, however as mentioned, this concept can be applied to any time frame.

The higher time frames such as 4 hourly or daily are more more swing entries with hourly and lower
being intraday.
So here we can see our higher POI.

Now from here, you can look deeper into that OB so you

have an idea as to where price could potentially go before reversing.

Once you find your OB, you can set an alert at the Open of your OB.

This frees up your time, meaning you dont need to sit and stare at the screen.

The reason we trade is to for our free time, so why waste time staring and waiting.

Once price taps your higher time frame OB, go to a lower time frame.

This is up to you and what you are comfortable with, some prefer 1 min some prefer 15 min

its up to you.

But what we look for is a BOS and an OB on the lower time frame.

Once we find our OB we set a limit order at either THE OPEN of the OB or 50% of the OB. This again is up
to you.

So here we can see a clear BOS and a clear OB, so we can now set a limit order on this OB

Once we set the order and set our target to our higher time frame High in this example.
The benefit of using a safer entry over a risk entry:

- More confirmation for the trade

- May get a better RR for the trade

Cons:

- More time consuming

- Sometimes it may not form a BOS on the lower time frame and price may just shoot from the higher
time frame OB. So you may miss trades.

What makes Orderblock valid?

1. It must break structure

2. The bull(or bear) candle must have a lot volume or momentum

3. It should have imbalance(or efficiency)

4. There should be liquidity resting within the OB

5. The OB should be fresh(yet to be mitigated)

6. The pull back into the OB should be weak and choppy.

If an OB respects these rules, then it has 90% chances of holding.

Market Structure Mapping Types

Although market structure is market structure, there are 3 different approaches that you can use to map
out and identify breaks of structure. This is important as it will give you better insight of what price is
likely to do next. The approach you take will ultimately depend on how aggressive or conservative you
would like to be with your trading.

Market Structure Mapping Types

Type 1: maps market structure using candle bodies and a break of structure is valid when price breaks
and closes above/below the previous candle body. This is noted as the most conservative approach to
mapping out market structure and identifying breaks of structure.

Type 2: maps market structure using candle wicks and a break of structure is valid when price breaks
and closes above/below the previous candle wick. This is the most common approach to mapping out
market structure and identifying breaks of structure as it is effectively taking the average of type 1 and
3.
Type 3: maps market structure using candle wicks and a break of structure is valid when price breaks
above/below the previous candle wick. This is noted as the most aggressive approach to mapping out
market structure and identifying breaks of structure. There can be many false signals

BOS (Break Of Structure)

A bos is to initiate a Momentum Shift or a Continuation of Trend Structure.

A bos of a Swing high or Swing low is a BFI Initiation.

HTF Highs and lows = Swing Structure

LTF Highs and lows within a range = Swing Structure

Questions to self:

● What was the cau$e that created the bos?

● Is this a noticeable break of a Swing Point? - Think BFI Initiation - Speed/Aggression!

● Is this a Continuation of trend structure or a Momentum Shift after a HTF mitigation?

THE LIQUIDITY

Liquidity = Money = fuel to move price!

I would say liquidity is where there is a lot of money and most people are looking to take trades.

If this type of situation happens then we know millions of people are targeting to make profit from.

Then a lot of stop losses and entries will be at that liquidity zone.

We can also say liquidity means a lot of stop losses and if there will be a lot of stop losses in a particular
zone, then smart money will look for where there is a majority of stop losses, take them out before
moving the

initial direction.
Once market takes out liquidity, it takes it out sharply and doesn’t want the majority to take or place
trades once they are grabbing liquidity, that’s why you see aggressive moves or spikes while they are
grabbing liquidity in the market and you are wondering if there was news in the market or the market
just wanted to move like that.

“IF YOU CANNOT SPOT THE LIQUIDITY, THEN YOU ARE THE LIQUIDITY”

Liquidity = fuel to move market in specific price area.

Liquidity is like a salary to big institutions and big players.

Rule : your stop loss is my entry.

With all this you are creating a narrative.

Liquidity is your confluence to your trade and edge where to enter.

On the chart, liquidity is in the form of stop losses and buy / sell stops.

These are the most used stop loss patterns.

Buy and sell side liquidity

Buy and sell side liquidity are areas of price in which buy stops or sell stops are mostly residing.

When we understand the higher timeframe, we can see where ‘smart money’ are possibly going to go
long and short due to

areas of price creating “support and resistance”.

Price will use these areas to seek liquidity in order to reverse or continue within its expansion move
Internal and External liquidity

Internal liquidity is liquidity made inside the Internal structure = Range

External liquidity is liquidity made outside the Internal structure = Range

PHANTOM TRENDLINE

Trendline Phantoms: False Trendlines

Diagonal Trendline Support:

1) The market begins to make higher highs and higher lows.

2) The market appears to have a imaginary diagonal line it seems to repel price higher from.

3) Retail Traders will extend these imaginary lines into the future and attribute support theories to it.

4) When price hits the extended imaginary diagonal line connecting higher lows – Retail Buys then.

B. Diagonal Trendline Resistance:

1) The market begins to make lower highs and lower lows.

2) The market appears to have a imaginary diagonal line it seems to repel price lower from.

3) Retail Traders will extend these imaginary lines into the future and attribute resistance theories to it.

4) When price hits the extended imaginary diagonal line connecting lower highs – Retail Shorts then.
Trendline Theory

Does price have an awareness of the point of Trendline Support?

Do Banks associate “value” or prognostication on the basis of Trendline theory?

Is the very nature of Trendlines flawed at its core?

How Market Makers capitalize on this fallacy in Price Analysis?

Retail: Bullish Trendline Support

Market Maker Trap: Sell Scenario

In periods when price is making higher lows and higher highs, the use of Trendline “Support” will be
adopted by Retail Traders.

The influx of weakhanded or less informed money at an area or price level – provides liquidity for the
Market Maker.

The chart may appear bullish but theunderpinnings are in fact the opposite.

The Retail crowd will buy at a moment when price will be devoid of support.

Price will collapse and leave the Retail Trader long with drawdown in the trade.
Retail: Bearish Trendline Resistance

Market Maker Trap: Buy Scenario

In periods when price is making lower lows and lower highs, the use of Trendline “Resistance” will be
adopted by Retail Traders.

The influx of weakhanded or less informed money at an area or price level – provides liquidity for the
Market Maker.

The chart may appear bearish but the underpinnings are in fact the opposite.

The Retail crowd will sell at a moment when price will be devoid of resistance.

Price will rally and leave the Retail Trader short with drawdown in the trade.
There may also be more taps on the phantom before the liquidity cascade. More taps // More
liquidity // More probability it will be raided.

WHAT IS CHOCH?

A CHoCH or Change of Character is when price shifts momentum, its a trend change, its a failure of EOF,
its a failure of supply or demand (potentially)-

its best paired with a high value area such as an M15/H4 supply or demand continuation zone.

An M15 CHoCH from an H4 zone is great- and M1 CHoCH from an M15 zone is great. A 5s CHoCH from
an M15 zone can be great too.

Pairing it with a sweep of EQH/EQL or structure is amazing. So many ways to find high value areas and
react to a CHoCH- figure out which ones speak

to you the best and champion it. Master your setup and how you look for your CHoCH and how you
execute from it. Just be consisten
CHoCH is a fancy term for a switch in trend via a BOS

HH & HL printing and then the HL is broken forming a LL - bear trend switch

LL & LH printing and then the LH is broken forming a HH - bull trend switch.

If price is in a Downtrend it is making Lower Lows (LL's) and Lower Highs (LH's).

After a Lower Low is formed we expect to see a Lower High form if the trend is to remain. If price
instead breaks the previous Lower High and forms a

Higher High; that would be a Change of Character (CHoCH). The character of the trend has begun to
switch from Bearish to Bullish.

If price is in a Uptrend it is making Higher Highs (HH's) and Higher Lows (HL's).

After a Higher High is formed we expect to see a Higher Low form if the trend is to remain. If price
instead breaks the previous Higher Low and forms a

Lower Low; that would be a Change of Character (CHoCH). The character of the trend has begun to
switch from Bullish to Bearish.
Mitigation

In simply manner it is the reduction of risk.

Now the way we view this in market is actually through the lens of fullfillement or rebalancing the
inefficiency or rebalancing orderblocks / S&D.

The reason it is a reduction of risk is because the BFI ( Banks and financial institutions/whales) is
ultimately getting in and out and back in back out of positions 24/7.

And as they get into positions and exit positions what they're doin is they closing out previously made
large orders for purpose of either continuing in a given direction or for the shift and displacement in the
current delivery of price.

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Example:

Whats happening inside this big push up? BFI is buyin up into these position. Basically they're profiting
of this bullish run. Upon this making bullish run they need to places that they can:

a) get back into new bullish positions

b) take profits on existing bullish positions

And this is how BFI ultimately buying the positions. BFI are constantly inputting more and more long
orders.

As they do this they need places to take profits on those orders.

When we have a structural delivery of price and price trades back into a demand zone or trades back
into some imbalances/inefficiency that existed in the market and then goes higher, what it does is it
targets the liquidity that rest at a top of that bullish structure.

When that liquidity is raid, the reason that liquidity exist there is because prior
dumber/street/uninformed money ( big whales also because they have locked buy stops at top) .

When they get ran by BFI, BFI buys. They have been buying all the way in all of these prices and have
been makin ton of buys leaving their stops at protected lows are lookin to take profits at those liquidity
points.
Why?

Because at the time that price gets to these points up here, what's happening is so many people have
begun to sell into the market that those buy stops are ran and as those people have their stop losses
triggered in form of buys they buy into big BFI sellers.

So these BFI get their positions up and they sell hard into those buyers. Which is why you often see the
fractal delivery of price.
Also the reason why Liquidity grab happen is because BFI that's been accumulating buys along the entire
bullish move are finally able to unload a ton of short positions into all the market participants that are
beginning to finally try to call their top.

Mitigation example on orderblock's/S&D

Mitigation rebalancing
IMBALANCE // FAIR VALUE GAP // INEFFICIENCY

When we're looking at efficient price action, what we would see is a series of three candles.

You would see an up move that creates a high another candle in the center and a third candle and
essentially a basic explanation is the high of the first candle needs to meet the low of the third candle to
be classified as efficient price action.

What this means essentially is when price is moving up both buyers and sellers had a fair chance at
access to liquidity to continue the move,

because for every buy order there needs to be a sell order.

On the other end and for every sell order there needs to be a buy on the other end.

Now we're looking at inefficient price action.

We can see that price, the high and the low of the third candle do not actually meet, which means this
candle was pure selling power that ultimately created the move.

And what that means is price is more than likely going to have to come back to this inefficient area of
pricing to fill any liquidity that was skipped.

If we're looking at a up move, it's the same concept.

We're looking at the low of candle one and the high of candle three. These candles should meet in order
to balance the Pricing and make pricing efficient, whereas an inefficient price action will see the low end.
The high of the third candle do not meet, which means price skip through any potential buying and
we're just offering sells from a volatility or liquidity standpoint. There was just too many selling positions
here that made price move too rapidly to efficiently offer both buying and selling to occur. And again
price will more than likely gravitate back to these areas to balance pricing and liquidity.

We generally will stick to the higher time frames when looking at imbalance in prices - 1 hour and
higher.

This provides the best range, whereas if you use a lower time frame imbalance, it may only be few
points, which isn't overly helpful.

One thing to note is that imbalance is more of an additional confluence and reference point of where
price may revisit.

If you spot imbalance on the 1 hour, for example, and you drill down low enough

you're likely to see efficient price action overall.

That being said you will also see correlating inefficiency in some cases which can be a strong indication
of where price is

going to revisit if it corelates with a higher timeframe point of imbalance.

NJAT :

Inefficiency

- Inefficient Pricing > the market has to stay balanced, for every buy there has to be a sell and vice versa.

When we see only buying or pure selling this creates voids in price that the Central banking algorithm
has to fill voids to make price-efficient again
IMBALANCE PRICE ACTION // IMBALANCE CLOSE PRICE ACTION

Imbalance price action in my eyes is simply the Higher time frame equilibrium in which on the Lower
time frame is range / PA.

Many times you will see a reaction from the imbalance equilibrium.

So IPA = Your Point of Interest. Range mitigation + confluence for continuation.

Supply/demand area inside imbalance!

Not every IPA is valid, but 80% is that you will get a reaction. Game of probability. Expectional
orderflow..

I like to use IPA as POI with breaker block overlap. Confluence

IPA as imbalance close price action

It is closing 100% imbalance PA. Also your Supply/ demand zone.

Hidden base

It is refined version of IPA. // Kissing candles// Only HTF POI - nothin else
Quasimodo or QM was taken from the cartoon character Hunchback of Notre Dame by Victor Hugo

Note Left Shoulder Quasimodo higher than the right shoulder ... and if we make the finish line at the
height of the left shoulder and right

shoulder ... then this is not the same elevation.

The concept is what we will use in the setup QM

Also qm's you can use it as entry on HTF orderblock+imbalance... Highly accurate
STRONG HIGH / WEAK LOW /// STRONG LOW/WEAK HIGH

Strong Highs/Lows

A Strong rejection of higher or lower prices is a fast change of direction, the aggression shown is BFI
activity. These highs and lows created and will be protected by BFIs.

We look at strong highs/lows as a continuation of trend structure LH or HL.

A strong high or low will be sustained by an aggressive move away (speed) (Price will normally create a
future POI) with continued mitigations away from the strong high/low.

- Strong Highs or Strong lows can be seen on multiple timeframes. - Think Fractal High/Lows!

Price delivery:

● Aggression/Speed

● Causes a swing bos

● Created at HTF Mitigation - Momentum shift

Look for aggression at highs/lows and not for any particular candle formations.

An aggressive change of direction is what matters (speed), not candle formation.

The reason is that candle formations are different on every timeframe, but strong highs/lows are visible
on more than one timeframe.

Understanding Strong highs or Strong Lows is the reason our stops can be tight (above or below the H/L)
because the BFIs will always protect their positions so price will not break past that strong high or low.

When a strong high or low is taken out, order flow/Price delivery has now changed.
Weak Highs/Lows

A Weak rejection of higher or lower prices can be a slow or fast move.

A fast move will lead to a false intention as it will not go on to create anything of significance, this can be
seen when no HTF Swing break of structure is taken out.

A slow move away can be easily identified as a correction, stacked highs or lows together.

We look at weak highs/lows as liquidity to support a future move higher or lower.

Price delivery:

● Slow change of direction (sideways PA)

● No HTF swing structure bos

● Not created at a HTF Mitigation

Look for swing points formed slowly, turning reluctantly with no apparent aggressive activity.

Look for swing points formed fast but don't go on to create anything significant swing bos.
No aggression > Slow Change of Direction

= Weak Low or High which now becomes future liquidity.

Weak highs/lows are places the price is likely to shoot through.

Strong high/ weak low concept by AKFX :

He uses a different approach to it. Strong high / weak low observed through quasimodo // SH (market
shift) +BMS ( break of market structure) + RTO ( return to the origin)

Strong high :

- High that caused Manipulation

- High that broke the low that formed the high

- ( significant low)
Weak low:

- Low that failed to break Strong high

- Low that is produced from Strong high

- Low that failed to break significant structure

Strong Low:

- Low that caused manipulation

- Low that breaks high that caused low

(significant structure)

Weak High:

- High that is produced from strong low

- High that failed to break strong low

- high that did not break any significant structure

We all understand that price is fractal right, but can only make 3 different moves, either a TREND,
REVERSING OR CONSOLIDATING.

When it comes to technical analysis, data is needed and we all understand this is why the higher
timeframe is important because they present more data for more accurate future predictions of the
market.

Now these patterns where created to aid in simplifying the higher timeframe date for technical data.

HOW THIS PATTERNS WHERE DRAFTED

According to Wyckoff, the market can be understood and anticipated through detailed analysis of supply
and demand, which can be ascertained from studying price action, volume and time.

Smart money concept; on the other hand is a concept of supply and demand which is a concept based
on 4 major points; Market structure, Price Range (order flow), Imbalance and liquidity.

Market structure; Market structure is defined as the simplest form of price movement reading from a
swing high to a swing low creating internal (mini) structures along the way.

Market structure is a trend following tool so it's read off the trend of the market creating a HH and LH or
a LL and HL.

ABOUT THE POWER OF THREE PATTERN

The power of 3 is a system mainly used for higher timeframe trend confirmation, but with proper
understanding can be used on the lower timeframe as confirmation also.

This was created to help in spotting an internal liquidity grab (retracement) from a reversal and to
simplify the Wyckoff method of trading to be able to spot the right trend, change in structure

for joining the right trend in a continuation, and spotting a reversal from an internal liquidity grab in an
early stage.
This concept was derived first from the ICT market maker method concept of 3 and tested on Wyckoff
Schematics and SMC Liquidity concept.

DRIVE OF P.O.3 PATTERNS

This concept was derived off the concepts of 3 by ICT in the market maker method, which states that
"Every schematic has 3 drives before a change in trend or structure, if price fails to

reverse after the 3rd drive the trend can continue".

This concept simplifies a lot and made identifying continuation trend on the smart money concept a lot
easier.

When later tested on Wyckoff it gave a reversal concept which developed the patterns presented on this
book which are the major basic patterns.

KEY FOCUS WHEN LOOKING FOR P.O.3

- Market Structure

- Weak and strong High/Low

- Premium and discount

- Supply and Demand

- Liquidity (Internal/External)

CONTINUATION PATTERNS

POINT 1 (P1): This is basically a Supply/Demand zone with a clear FVG below for supply and above for
demand zone which would be a center of attraction for price when retracing, created

within the range of a structure at premium in a downtrend and discount in an uptrend, before a break of
swing high or low.

POINT 2 (P2):

First swing High/low test of premium or discount level after a break of swing structure low/high which
never completely cleared Internal Liquidity or never properly

mitigated the Supply or demand zone of (P1).

In some scenarios point 2 could be a test of the opening of the supply zone completely filling just the
Imbalance, in some scenarios it could be just a 50% of the.
This is marked as confirmation of the pattern as it creates the inducement needed for the continuation
of the trend, a point 2 clear's internal range liquidity and sometimes just

the 50% of it, but would always give an inducement so as not to complete the intensions of the market
makers and becomes an inducement to the closest supply or demand presented by

point 1 (P1).

If point 2 (P2) should by chance complete the intensions by mitigating the P1, there is a high probability
that your markup isn’t correct and might be a reversal pattern on a higher

timeframe.

And if verified correctly a stop hunt shouldn’t be rare in this scenario.

Point 2 is important because without it your pattern is completely wrong.

Every point 1 mark up need’s an inducement to be respected. In continuation pattern 2, point 2 clears
out the weak low/high before point 3 comes giving a fake CHoCH, and create a trap point 1 within the
range of Point 2,

trapping agitated and anxious traders in the process. Personally I love pattern 2 playing out.

POINT 3: Point 3 also known as the mitigation or Entry point.

It’s the 2nd swing/major structure test of the premium or discount after point 2 which is expected to
mitigate a significant point (point 1) by clearing off point 2 as expected.

This creates an area of focus which gives us the confirmation on the lower timeframe for smart money
confirmation entry or

whichever lower timeframe confirmation you personally use for trading.

REVERSAL PATTERNS

With the understanding of continuation patterns been a smart money theory.

Reversal patterns come with the concept of Wyckoff theory, though it looks similar to the continuation
patterns

but easily miscalculated when spotting a change in character.

On the reversal pattern P.O.3 is spotted twice, where the first is within the sub structure of the major
trend from a higher timeframe, where price Retraces back into a premium or discount zone of the major
trend,

looking more like a higher timeframe continuation pattern, however on the reversal pattern (P2)
becomes the official low of the schematic as it moves into a demand/Supply zone clearing

off the official low of the major trend structure and also creates the mitigation point (point 3) of the sub
structure and also forms a new supply/demand zone within the reversal range for a

mitigation of p3 of the main structure, in the process of this (sub structure p3) presents a low
momentum reaction from the mitigated Sub structure P1 which brings in the presence of a

CHoCH (change of character), as Supply becomes stronger in a down trend and demand becomes
stronger in an uptrend.
In most scenarios the reversal pattern is higher timeframe P.O.3 continuation pattern of which the
reversal major structure P2 is the higher timeframe P1. In the process of P3 of sub

structure being the P2 inducement the demand or supply zone is presented with a Imbalance within the
range of the structure which is formed by point 2, for a retracement back to form the major

trend (P3 re-test).

 ICT Fibonacci

-1 Symmentrical
-0.62 Target 2
-0.27 Target 1
0 Profit Scaling
0.5 50% Equilibrium
0.618 62%
0.705 OTE 70.5
0.79 79%
1 100.1
Nora Bystra
Abbreviations | Explanations
The Engulf
Entry Point
Movement
Danger Zone
Confirmation
Multi TF Analysis
Hybrid 1
Hybrid 2
SNRC1+Confirmation
SNRC2+ Confirmation
SNRC3 - Confirmation
QM2P Confirmation
QMR - Confirmation
QMM Confirmation
QMC - Confirmation
Manipulation
Blindspot Chapter 1- Confirmation
Blinspot Chapter 2 - Confluence
CLAB
CK1 (Single Confluence)
CK2 ( Double Confirmation)
Ar
ar
CK3 (Strongest Confirmation)
Wyckoff
Abbreviations & Explanations

Accumulation: Wyckoff Events

PS preliminary support
SC selling climax
AR automatic rally (bullish, I think)
ST—secondary test
SOS sign of strength
LPS last point of support
BU backup
SSR stepping stone redistribution

Distribution: Wyckoff Events

PSY preliminary supply

BC buying climax
AR automatic reaction (bearish, I think)
ST secondary test
SOW sign of weakness
LPSY last point of supply
UT upthrust
UTAD upthrust after distribution
TR trading range