Explaining fractals within fractals. 15 min. vs. 5 minute charts
15 minute and 5 minute charts are really low timeframes already. Especially for swing traders so let me be clear about the fact that higher timeframe and lower timeframe are to be seen as relative terms here.
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We can see the following happening:
- in the 15min timeframe there's a clear accumulation going on.
- There's a run up towards old resistance and an old bearish orderblock (which I've not indicated)
- There's a smart money reversal
Then the interesting stuff happens.
- Because of the initial drop down from the smart money reversal, the 5 minute timeframe shows an optimal entry for a buy. So there's some accumulation of long orders happening.
- The lower timeframe makes a run towards resistance, accumulates there and then goes higher to form another high.
- The lower timeframe also creates a smart money reversal
- A lower timeframe low risk sell (which is also the same for the higher timeframe as this would have been the entire consolidation at the top there)
- We can see price drop with certainty, moving away from the consolidation there
- A very small consolidation forming distribution for the 5 minute chart and then
- Another drop down to arrive at the new distribution/re-accumulation zone for the smaller timeframe.
This is the important part.
Normally the 5 minute timeframe would continue stacking long orders here, but because of the higher timeframe premise, they should not.
- We can clearly see that the smaller timeframe distribution zone is actually the 1st distribution zone for the larger timeframe.
- Then another drop occurs and the larger timeframe arrived at it's destination. Presumably trapping or stopping out 5 minute chart traders.
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Both buyers and sellers can be right within both bullish and bearish markets. This is only to show why one side of the market tends to make a mistake opposite to another. Note: this serves for my own training purposes, again setting in stone whatever I've learned from the ICT.
-----
We can see the following happening:
- in the 15min timeframe there's a clear accumulation going on.
- There's a run up towards old resistance and an old bearish orderblock (which I've not indicated)
- There's a smart money reversal
Then the interesting stuff happens.
- Because of the initial drop down from the smart money reversal, the 5 minute timeframe shows an optimal entry for a buy. So there's some accumulation of long orders happening.
- The lower timeframe makes a run towards resistance, accumulates there and then goes higher to form another high.
- The lower timeframe also creates a smart money reversal
- A lower timeframe low risk sell (which is also the same for the higher timeframe as this would have been the entire consolidation at the top there)
- We can see price drop with certainty, moving away from the consolidation there
- A very small consolidation forming distribution for the 5 minute chart and then
- Another drop down to arrive at the new distribution/re-accumulation zone for the smaller timeframe.
This is the important part.
Normally the 5 minute timeframe would continue stacking long orders here, but because of the higher timeframe premise, they should not.
- We can clearly see that the smaller timeframe distribution zone is actually the 1st distribution zone for the larger timeframe.
- Then another drop occurs and the larger timeframe arrived at it's destination. Presumably trapping or stopping out 5 minute chart traders.
--------
Both buyers and sellers can be right within both bullish and bearish markets. This is only to show why one side of the market tends to make a mistake opposite to another. Note: this serves for my own training purposes, again setting in stone whatever I've learned from the ICT.
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