Smart Money Concepts - StructureThe basics of Smart Money Concepts with an overview of market structure and liquidity.
Liquidity
The most liquid Forex currency pairsThe liquidity of a currency pair in other words is the ability to liquidate any amount you need (sell, for example) when you need it, without tangible loss of time and income.
The higher the liquidity of the pair, the more reliable and attractive it is for trading. This implies that there is strong demand and high supply for this asset.
The higher the liquidity of the market, the faster you will be able to complete a deal on the position you are interested in.
The price in a highly liquid market moves gradually, in small steps. Less liquidity leads to large price jumps as well as gaps in the chart.
What major currency pairs do you work with?
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Basic Concepts of Liquidity Truly understanding 'why' the market moves through basic concepts of Liquidity
This basic analytical overview is derived from the institutional methodology used at Phantom Trading.
We use this institutional methodology commonly known as 'smart money concepts' in conjunction with additional pieces of confluence to utilise Liquidity around the factualities of the market.
Within the graphic is 'reads a story of transitional money flow' in a clear, concise manner based on a 'vanilla / utopian / textbook' setup.
At the extremity we can see the absolute 'swing high' creating a BMS (Break of market structure) followed by an impulsive continuation to the downside showing 'Bearish' Intent, the market tapping into demand & buy side liquidity has then correctively navigated back towards the previous swing high, printing what is commonly known as a 'double top' where several 'trading styles / types / characteristics' come into play - Front running 'Breakout traders' , Double-top' traders and the more patient Trend continuation', 'Breakout & Retest' traders. Knowing and understand concepts of Supply / Sell side liquidity around these levels we classify these as EQH - equal Highs as Liquidity is manufactured in these specific regions filling bids & offers.
Once we have 'swept the liquidity' above the EQH it provides us with additional opportunities to Short the 'asset-class'
The Basic Concept of Liquidity - LongMirroring the previous graphic based on the 'sell side' this graphic provides insight and annotates how institutions view and see the market based on the core concepts of Liquidity utilising
the models around 'Premium vs Discount'
The graphic shows key points where liquidity is manufactured around 'traditional retail methodologies'
If and when you can understand WHY the market moves the way it does, then you will be able to take your trading to the next level !
How to draw a trade zone for false breakout / liquidity hunt?Once you spot a location to trade from (be it a liquidity hunt, or a false breakout + market structure break) - that's only half of the job. The next most important step is to draw a correct zone which gives you a safe and reliable way to enter and define your risk.
I've always found that drawing zones which help you define your entry & risk is an art, more so than science. And this doesn't work for me - because if it's not driven by a process, I'm bound to make mistakes in this important step. Hence, I wanted it to be more defined - to the level that it could be given to a programmer who could code it.
Primary method of drawing the zone
1) Find the candle that generated the signal
2) Draw a rectangle into left side of price on the signal candle (green rectangle)
For SHORT signal
=> 3) Draw (yellow) zone using the highest + last UP candle which exited this rectangle
For LONG signal
=> 3) Draw (yellow) zone using the lowest + last DOWN candle which exited this rectangle
4) If the candle right after signal candle does not test this zone, then trade this zone as a signal - ELSE - look for the secondary way of drawing the zone
Secondary method of drawing the zone
1) Find the signal candle and look left of it
For SHORT signal
=> 2) Draw zone using last UP candle which broke an HH pivot
For LONG signal
=> 2) Draw zone using last DOWN candle which broke an LL pivot
3) Discard the zone if price revisited that zone before giving the signal
There are many reasons why these zones work (if your overall trade is correct)
- These will be the candles which are guaranteed to be engulfed by the signal making candle
- If these are institutional trades, most likely it's here where they set the fakeout trap. Hence, when price comes back to these zones, they have no need to take prices beyond your stop loss as there's no more liquidity there
- If these are those amateur folks who were trading the breakout, this is where the smartest of them bought/sold and will be the first in line to exit
If you have feedback on how to improve this zone drawing process, please leave your feedback in the comments below.
Cheers!
EDUCATION: THE OPTIONS HIGHLY LIQUID SINGLE NAME LISTAnd now, for the current single name list:
AAL (American Airlines)
AAPL (Apple)
ABBV (AbbVie)
ACB (Aurora Cannabis)
AEO (American Eagle Outfitters)
AGNC (AGNC Investment)
AMC (AMC Entertainment)
AMD (Advanced Micro Devices)
AXP (American Express)
AZN (AstraZeneca)
BA (Boeing)
BABA (Alibaba Group Holdings)
BAC (Bank of America)
BB (Blackberry)
BBBY (Bed Bath and Beyond)
BMY (Bristol-Myers Squibb)
BP (British Petroleum)
BYND (Beyond Meat)
C (Citigroup)
CCL (Carnival Group)
CGC (Canopy Growth)
CHWY (Chewy)
CLDR (Cloudera)
CMCSA (Comcast)
CNX (CNX Resources)
COST (Costco)
CRM (Salesforce.com)
CRON (Cronos Group)
CRWD (Crowdstrike Holdings)
CSCO (Cisco Systems)
CVS (CVS Health)
CVX (Chevron)
DAL (Delta Airlines)
DDOG (Datadog)
DELL (Dell Technologies)
DIS (Walt Disney)
DKNG (DraftKings)
DOCU (Docusign)
EBAY (EBay
ET (Energy Transfer)
F (Ford)
FB (Facebook)
FCX (Freeport-McMoran)
FDX (FedEx)
FISV (Fiserv)
FLIR (Flir Systems)
GE (General Electric)
GILD (Gilead Sciences)
GM (General Motors)
GOLD (Barrick Gold)
GPS (Gap)
GS (Goldman Sachs Group)
HAL (Haliburton)
HD (Home Depot)
IBM (International Business Machines)
INTC (Intel)
IQ (Iquiyi)
JD (JD.com)
JNJ (Johnson & Johnson)
JPM (JP Morgan Chase)
KO (Coca-Cola)
KR (Kroger)
LUV (Southwest Airlines)
LVS (Las Vegas Sands)
LYFT (Lyft)
MDT (Medtronic)
MGM (MGM Resorts)
MPC (Marathon Petroleum)
MRK (Merck)
MRNA (Moderna)
MRO (Marathon Oil)
MS (Morgan Stanley)
MSFT (Microsoft)
MU (Micron Technologies)
NCLH (Norwegian Cruise Lines)
NFLX (Netflix)
NIO (Nio)
NKE (Nike)
NKLA (Nikola)
NVDA (Nvidia)
ORCL (Oracle)
OXY (Occidental Petroleum)
PBR (Petrobras)
PDD (Pinduoduo)
PENN (Penn National Gaming)
PFE (Pfizer)
PINS (Pinterest)
PLAY (Dave & Buster's Entertainment)
PLUG (Plug Power)
PTON (Peloton)
PYPL (Paypal)
QCOM (Qualcomm)
RAD (Rite Aid)
RCL (Royal Caribbean Group)
ROKU (Roku)
RTX (Raytheon Technologies)
SAVE (Spirit Airlines)
SBUX (Starbucks)
SLB (Schlumberger)
SNAP (Snap)
SONO (Sonos)
SPCE (Virgin Galactic)
SPG (Simon Property Group)
SQ (Square)
T (AT&T)
TGT (Target)
TMUS (T-Mobile U.S.)
TRIP (Tripadvisor)
TSLA (Tesla)
TWTR (Twitter)
UAL (United Airlines)
UBER (Uber)
UPS (United Parcel Service)
V (Visa)
VALE (Vale)
VIAC (Viacom CBS)
VZ (Verizon Communications)
WFC (Wells Fargo)
WKHS (Workhorse Group)
WMT (Walmart)
WORK (Slack Technologies)
WYNN (Wynn Resorts)
XOM (Exxon Mobil)
EDUCATION: THE OPTIONS LIQUID EXCHANGE-TRADED-FUND LISTLiquidity. Liquidity. Liquidity. Whether you're short strangling, iron condoring, laddering out short puts, or doing covered calls, having excellent options liquidity is the cornerstone of any options trade, and the universe of highly liquid options instruments is actually quite small relative to the smorgasbord of underlyings out there. I've posted my list of highly liquid exchange-traded-funds at various times in chat rooms, but thought I'd set it out here for easy reference. Here they are, in alphabetical order, along with a brief description of what they are:
BKLN (Leveraged Loan Index)
DIA (Dow Jones)
EEM (Emerging Market Equities)
EFA (MSCI ex. Canada/U.S.)
EMB (Emerging Market Bonds)
EWA (Australian Equities)
EWW (Mexican Equities)
EWZ (Brazilian Equities)
FEZ (Euro Stoxx 50)
FXI (Chinese Equities)
GDX (Gold Miners)
GDXJ (Junior Gold Miners)
GLD (Gold)
HYG (High Yield Corporate Bonds)
IWM (Russell 2000)
IYR (REIT)
KRE (Regional Banks)
LQD (Investment Grade Corporate Bonds)
MUB (Municipal Bonds)
QQQ (Nasdaq 100)
SLV (Silver)
SMH (Semiconductor)
SPXL (3 x Leveraged Bullish S&P 500)
SPY (S&P 500)
TLT (20-Year + Average Maturity Treasuries)
TQQQ (3 x Leveraged Bullish QQQ)
UNG (Natural Gas)
USO (Crude)
UVXY (1.5 x Leveraged Volatility)
VIX (Volatility)
VXX (Volatility)
XBI (Biotech)
XLE (Energy)
XLF (Financials)
XLI (Industrials)
XLP (Consumer Staples)
XLRE (REIT)
XLU (Utilities)
XME (Metals and Mining)
XOP (Oil and Gas Exploration and Production)
XRT (Retail)
UUP (Dollar Index)
And sorted by type:
BROAD MARKET EQUITY:
DIA (Dow Jones)
EEM (Emerging Market)
EFA (MSCI ex. U.S./Canada)
EWA (Australia)
EWZ (Brazil)
EWW (Mexico)
FEZ (Euro Stoxx 50)
FXI (China)
IWM (Russell 2000)
QQQ (Nasdaq 100)
SPXL (3 x Leveraged Bullish S&P 500)
SPY (S&P 500)
TQQQ (3 x Leveraged Bullish QQQ)
BONDS/FINANCIAL INSTRUMENTS:
BKLN (Leveraged Loan Index)
EMB (Emerging Market Bonds)
HYG (High Yield Corporate Bonds)
LQD (Investment Grade Corporate Bonds)
MUB (Muncipal Bonds)
TLT (20-Year + Average Maturity Treasuries)
SECTORS:
GDX (Gold Miners)
GDXJ (Junior Gold Miners)
KRE (Regional Banks)
SMH (Semiconductors)
XBI (Biotech)
XLE (Energy)
XLF (Financials)
XLI (Industrials)
XLP (Consumer Staples)
XLRE (REIT)
XLU (Utilities)
XME (Metals and Mining)
XOP (Oil and Gas Exploration and Production)
XRT (Retail)
REITs:
IYR
XLRE
COMMODITIES/CURRENCY:
GLD (Gold)
SLV (Silver)
UNG (Natural Gas)
USO (WTI Crude Oil)
UUP (Dollar Index)
VOLATILITY:
VIX
VXX
UVXY
I WANT YOU TO SUCCEED!TO UNDERSTAND THE STOCK MARKET'S MOVEMENT, YOU MUST UNDERSTAND WHICH FACTOR IS THE MOST INFLUENTIAL:
THE DOLLAR!
IF THE FED HAS SUCCEEDED IN SATISFYING THE GLOBAL DOLLAR SHORTAGE, THE STOCK MARKET WILL CREATE NEW ALL-TIME HIGHS!
IF THEY HAVE FAILED, ANOTHER WAVE OF ILLIQUIDITY WILL OCCUR!
UNDERSTAND THE EURODOLLAR!THE EURODOLLAR FUTURES CONTRACT REFLECTS THE L.I.B.O.R. INTEREST RATE (A BENCHMARK FOR THE INTEREST RATE AT WHICH MAJOR BANKS LEND TO EACH OTHER)!
WHEN THE PRICE OF THE CONTRACT INCREASES, THE L.I.B.O.R. INTEREST RATE IS DECREASING, WHEN THE PRICE FALLS, IT IS INCREASING!
THE PERIOD I HAVE HIGHLIGHTED IN THIS POST IS THE PERIOD OF DOLLAR ILLIQUIDITY THAT OCCURRED IN THE LATE 00s-EARLY 10s!
AS THE FEDERAL RESERVE INTERVENED AND PROVIDED LIQUIDITY, L.I.B.O.R. WAS SUPPRESSED, AND THE SIZE OF THE INTERVENTION ALMOST PUSHED THE RATE TO 0!
THE SIZE OF THE INTERVENTION IS IMPORTANT IN THAT IT REFLECTS THE SIZE OF THE PROBLEM, INDICATING THAT THE GLOBAL LACK OF DOLLARS WAS SEVERE!
WHILE THE INTERVENTION SUCCEEDED IN SUPPRESSING L.I.B.O.R. OVERALL, THERE WERE SEVERAL PERIODS DURING WHICH THE LACK OF AVAILABLE U$Ds CAUSED LENDING BETWEEN FINANCIAL INSTITUTIONS TO CONTRACT, INCREASING L.I.B.O.R., CAUSING A NUMBER OF PROBLEMS AND FORCING FURTHER ACTION BY THE FEDERAL RESERVE!
THE 2008 GLOBAL FINANCIAL CRISIS WAS NOT NECESSARILY CAUSED BY A REDUCTION IN U.S. HOME PRICES, BUT BY A SYSTEMIC BANKING DOLLAR SHORTAGE!
THE LACK OF U$Ds REMAINS, AND HAS EVEN INCREASED, HOWEVER ENTIRE NATIONS ARE AT RISK OF SUFFERING THE CONSEQUENCES, NOT ONLY THEIR BANKS!
NOW THE IMPORTANT QUESTIONS ARE:
1. IS THE GLOBAL ECONOMY NOW DEPENDENT ON THE FEDERAL RESERVE PROVIDING NEW U$Ds TO AVOID A COMPLETE DEFLATIONARY COLLAPSE? (MOST LIKELY YES)
2. IS THE FEDERAL RESERVE ABLE TO SATISFY THE INTERNATIONAL DEMAND FOR U$Ds, NOT IN TERMS OF AMOUNT, BUT IN TERMS OF DEPTH, REACHING FINANCIAL INSTITUTIONS AND CORPORATIONS NOT DIRECTLY TIED TO THE MAJOR U.S. BANKS? (QUITE POSSIBLY NO, BUT THEY WILL TRY THEIR HARDEST)
3. IF WE ASSUME THIS IS THE DEATH RATTLE OF THE DOLLAR'S WORLD RESERVE CURRENCY STATUS, WHICH IS THE MOST LIKELY OUTCOME, THAT IT IS INFLATED AWAY OR THAT IT IMPLODES ON ITSELF? (I WOULD ARGUE GIVEN THE FED'S ACTIONS, THAT IT WILL BE INFLATED AWAY)
4. REGARDLESS OF HOW THE LOSS OF RESERVE CURRENCY STATUS OCCURS, A CONSEQUENCE OF THIS PROCESS WILL BRING ABOUT A COMPLETE SELL-OFF IN THE U.S. TREASURY MARKET, FORCING THE FEDERAL RESERVE TO COMPLETELY MONETIZE THESE BONDS TO PREVENT INTEREST RATES FROM RISING: IF THIS UNFOLDS, CAN ANY OTHER POSSIBILITY BUT HYPERINFLATION BE CONSIDERED? (NO)
NAKED CHART TRADING in One picture APPLICATION OF ELLIOTT WAVE, SUPPLY N DEMAND, LIQUIDITY,TREND LINE, FIBONACCI n MEASURED MOVE
Not enough space for wyckoff n chart pattern.
Study it!!!, naked trading is posibble n as easy as custom indicator trading too
OPTIONS NUTSHELL: EVALUATING UNDERLYINGS FOR OPTIONS LIQUIDITY(1) Not every underlying is "options liquid."
(2) Avoid trading "options illiquid" underlyings with options.
(3) Average share volume, the availability of both monthly and weekly expiries, the availability of one-half to dollar-wide strikes, and the tightness of markets are all indicators of option liquidity.
(a) Average Share Volume. Look for underlyings that trade at least two (2) million shares on average. This doesn't mean that the underlying will have liquid options, but is a starting point to weed out thinly traded instruments that are unlikely to have liquid options.
(b) Monthly/Weekly Expiry Availability. Underlyings with liquid options tend to have both monthlies and weeklies.
(c) One-Half to Dollar-Wide Strike Availability. Underlyings with liquid options tend to not only have dollar-wide strikes available, but also half-dollar wides, although this will vary to some extent on the size of the instrument. Larger instruments may have less "granular" strike availability, but smaller instruments should have comparatively more.
(d) Width/Tightness of Markets. Avoid trading underlyings with options in which the differential between the mid/bid and/or mid/ask is greater than 5% of the credit received (assuming it's a short premium setup; it's the converse for a setup for which you're paying a debit) is a good rule-of-thumb.
Next Up: Trade Metrics for NonDirectional Premium Selling (Short Straddles/Strangles, Iron Condors/Iron Flies).
Splitting Thoughts: Anatomy of a Stop Hunt in Accumulation PhaseCall me a conspiracy theorist all you want but the fact is price look for liquidity. Liquidity exists in price zones that have a lot of participation. Obvious levels and obvious patterns are liquidity pool haven.
No, I do not have a "solution" or steps to avoid this phenomenon. I have my own personal ways to navigate it. Is it the best? It is the best for me personally for sure, it could be the worse for you. Refer to the links below how I navigate the market in a very simplified way
Navigating The Market : Simplifed = Friday/Monday relationshipThis is not a trading strategy nor claiming this concept happens 100% of the time, but this is a repetitive pattern and I personally believe it could help you to navigate the market (particularly if you are an intraday trader) more efficiently.
I generally would see this in 1-Hour timeframe but for the sake of being able to show you with more examples in one post, I choose D1 timeframe for this post. When price breaks and close above Friday high on a Monday, more often than not, the price would eventually reverse downwards within 18-24 hours. Vice versa for a close below Friday low (on a Monday)
Why I believe this phenomenon is real and tangible is because Friday or Monday normally a day where the Banks (NY session) attempt to clear their books. In order to do this, sometimes they need liquidity to offload their position, they would do stop hunts if there is a need to do so.
Hence I've conceptualised this Friday/Monday relationship into my way of analyzing the intraday moves especially on a Mondays. By default, any breakout from the Friday high or low, I would consider it as a stop hunt/fake breakout. Of course, there be a week where a breakout from the Friday started a huge trend that lasts weeks, but that is an outlier. I do not care about outliers, as a trader I will try to profit from what is repetitive, and this concept is very repetitive.
This is just one of three "day-to-day relationships" that I have conceptualised to make me reading the market a lot easier. The other two are Mon - Tue/Wed relationship,andTue/Wed to Thu/Fri relationships that I have conceptualised. Tell me what you all think,
Orderblocks and Liquidity VoidsIn this tutorial, I give a brief description on how to determine high probability orderblocks using the knowledge of liquidity voids.
By the end of this video, you should be able to pin point a bullish or a bearish orderblock which has a very high probability of holding support or resistance respectively.
You will also be able to mark out inefficiencies in the market place which are targeted by market makers to be filled later on, and how they utilize these inefficiencies to "Engineer" liquidity to fill orders for institutional investors.
Cheers!
Judas Swing $XBT The Judas swing term was named by ICT, he dubbed this swing concept and utilizes it upon the London Open. The idea is, the market makers will rally or sell price, normally just above or below the Asian session high or low (depending on institutional order flow bias) tricking buyers or sellers into the market to follow its direction. As the Judas swing high or low is formed, price is quickly reversed either taking out stops and or leaving traders out of the game. Judas swings can be seen on high and low time frames, though if you are an intra day trader, once higher time frame objective levels are in place and you have your directional bias in tow, you will be looking for the Judas swing to occur on a 15 minute chart time frame. You can also see the Judas swing develop on a 1 hour chart, though the 15 minute chart will show its intension a bit more clearly, when you know what you are looking for.
Bitcoin Judas SwingThe Judas swing term was named by ICT, he dubbed this swing concept and utilizes it upon the London Open. The idea is, the market makers will rally or sell price, normally just above or below the Asian session high or low (depending on institutional order flow bias) tricking buyers or sellers into the market to follow its direction. As the Judas swing high or low is formed, price is quickly reversed either taking out stops and or leaving traders out of the game. Judas swings can be seen on high and low time frames, though if you are an intra day trader, once higher time frame objective levels are in place and you have your directional bias in tow, you will be looking for the Judas swing to occur on a 15 minute chart time frame. You can also see the Judas swing develop on a 1 hour chart, though the 15 minute chart will show its intension a bit more clearly, when you know what you are looking for.
BENEFITS AND RISKS OF TRADING 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY
BENEFITS AND RISKS OF TRADING 101
a) Market Action
Market Action is determined as the summary of data showing the trading activities in the market, which determines the differentiation between the price of the currency on which profit or loss can be generated. The rate of change in profit and loss is provided in Market action summary. This can enable the investors to determine which FOREX they should sell or buy in the market.
b) Liquidity
1. Market liquidity determines the extent to which a market, it can be a real estate or a trading market, which can allow selling and buying of assets at stable prices. In the trading market, the liquidity of securities is considered as ease of selling and buying the securities without affecting the price of the assets.
2. While trading in a FOREX market with a high volume, the bid price offered by a buyer on each share and the asking price on which seller is willing to sell shares, if based on the same or close amounts than the market highly liquid.
3. The difference between the prices is considered as the spread. The market liquidity usually affects when the difference or spread between the ask prices and bid prices increase.
c) Leverage
Traders determine margin and leveraging as the two important aspects of leveraging. The loan provided by a broker is considered as a margin, which enables traders in leveraging the securities and funds through the account to accomplish large trade activities. However, it is necessary to open and get an approval on a margin account.
The FOREX market usually uses 2:1 leverage, this means that investor can buy almost double of the amount they hold in their trading account. This means that if the investor has $50,000 then they can purchase $100,000 of currency in case their trading account leverage is 2:1.
d) Economic risks
Economic risk arises due to the changes in macro economic conditions. These risks are much capable that they can introduce changes in investments of shareholders and bondholders in the market. These changes can be the result of changes in government regulation, exchange rates, and political stability. International investment carries more investment risk as compared to domestic investment. The main reason that economic risk can adversely affect the corporate investments is due to the fact that economic risks can violate the economic sustainability.
Happy trading :)
Today's Lesson (#5) : How trade possible market manipulations.Before playing that video, be aware that I'm a very agressive trader, which means high level of risk into trying to copy my trades. The quality in those videos comes out of their content, not just following blindly. I'll be trading this with low leverage as this is highly speculative. So please don't just follow blindly but just take the educational content out of this to learn how to trade manipulated market more "safely", still being aware that this remain high risky thing !
BTC - How market makers create liquidity for positionsA little cluttered but shows how whales/MM create liquidity for large positions. This method works very similarly in Forex. EURUSD is a great example.
