The Best Way to Call Tops and Bottoms - Defining Master Pattern Contraction Points

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Brief Summary

This video explains how to identify and use the Forex Master Pattern, also known as the three market phases (contraction, expansion, and trend), to understand market movements from an institutional perspective. It emphasizes the importance of accurately defining contraction zones by looking for simultaneous lower highs and higher lows, followed by expansion phases. The video also demonstrates how to apply this pattern in real-time trading scenarios using live chart analysis, focusing on identifying key levels and potential trading opportunities.

  • The Forex Master Pattern consists of contraction, expansion, and trend phases.
  • Contraction zones are key balance points where market makers assess supply and demand.
  • Identifying contraction zones involves looking for simultaneous lower highs and higher lows.
  • Expansion phases confirm the validity of contraction zones and provide key levels for trading.
  • Applying the pattern in real-time involves analyzing higher and lower time frames to identify potential trading opportunities and manage risk.

Introduction to the Forex Master Pattern

The Forex Master Pattern is a consistent technical analysis tool applicable across all time frames and financial markets, including forex, stocks, commodities, and cryptocurrencies. This pattern helps traders understand the market from an institutional perspective by identifying the footprint left by bank activities. It consists of three phases: contraction (a tightening of price), expansion (a widening of price), and trend (a move to higher or lower prices).

Understanding the Three Market Phases

The Forex Master Pattern, also known as the three market phases, includes contraction, expansion, and trend. The contraction phase involves a tightening of price, while the expansion phase is the opposite, showing a widening of price. The trend phase is the move to higher or lower prices. This pattern, originating from early 1900s traders like Jesse Livermore and Richard Wyckoff, helps traders follow how banks control the markets.

Identifying the Contraction Phase

The contraction phase is identified by simultaneous lower highs and higher lows, indicating a tightening of price. This phase provides the market maker balance point, which is where they balance their book of business. The expansion phase follows, showing a widening of price, and then the trend phase, where the market moves to higher or lower prices.

Defining Contraction Zones

Contraction zones are defined balance points where market makers conduct equalizing two-way business between buyers and sellers. These zones act as reset points for market makers and large institutions, allowing them to evaluate supply and demand and create portfolio management plans. Accurately defining these zones helps map out the market's framework and understand the story behind the scenes.

Characteristics of Contraction Zones

The main characteristic of a contraction zone is the simultaneous occurrence of lower highs and higher lows, leading to a tightening of price. This is a leading indicator. The lagging component that confirms the validity of the zone is the expansion phase, with expansion legs pointing back to the contraction zone. Even if expansion legs occur, the original contraction zone remains a key reference point.

Global Master Pattern View

The global master pattern view involves identifying swing highs and swing lows that point back to a central point of origin. This pattern helps traders scan charts for contraction zones, using the contraction of price as a leading indicator and the first expansion leg as a lagging indicator. Tracking these zones creates a map-like structure, revealing major and minor key levels used by market makers.

Finding the Forex Master Pattern in Real Time

To find the Forex Master Pattern in real time, traders should focus on drawing boxes at the correct places relevant to the current price action. It's important to identify the most recent spot where price tightened up, indicating a contraction period. The expansion legs coming out of this contraction point back to it as a central point, confirming it as a market maker balance point.

Live Chart Analysis: Dollar CAD

On the daily chart for Dollar CAD, the most recent contraction period is identified where price tightened up, followed by expansion legs. This point is marked as a market maker balance point. On the 15-minute chart, a recent sensitive point is identified with price tightening and then expanding past the low and high. This level is used to define buying and selling points, with the rotation off that level being the optimal trading opportunity.

Using MetaTrader 4 to Identify Contraction Zones

To identify contraction zones using MetaTrader 4, insert a rectangle shape on the chart to mark the area where price is constricting. Look for simultaneous lower highs and higher lows. After the contraction, the expansion legs confirm the zone's validity. Place a line in the middle of the box to mark the sensitive price level.

Analyzing Dollar CAD on Daily and 15-Minute Timeframes

On the daily chart for Dollar CAD, a contraction zone is identified, and a line is placed in the middle to mark the sensitive price level. Yellow candles forming below this level indicate a short trade opportunity. On the 15-minute timeframe, a contraction point is identified, and a rectangle is placed around it. The line in the middle indicates the sensitive price level, which can be used to define buying and selling.

Additional Contraction Points and Trading Scenarios for Dollar CAD

Another contraction point is identified on the 15-minute chart for Dollar CAD, and a rectangle is placed around it. This creates a dealing range between two sensitive price levels. If the daily trend is short, traders can look for price to hold below the upper level. The potential target is the previous low, and traders should monitor progress to ensure the trade is valid.

Scanning for Opportunities: Euro Pound Analysis

When scanning for opportunities, it's important to start with the higher timeframe (daily chart) to identify potential trades. For Euro Pound, a contraction zone is identified on the daily chart, with a clear respect for that level. The ideal trade placement was at the sweet spot where the level was respected. On the 15-minute chart, a contraction point is identified, and a rectangle is placed around it.

Trading Plan for Euro Pound

A reasonable trading plan for Euro Pound involves waiting for a significant momentum push up through the identified level on the 15-minute chart. If price holds above this level, it's a safe place to buy, protecting risk below the line. The initial progress target is the top of the expand high. If price respects the level and starts heading short, it could indicate a potential yellow candle on the daily chart.

Controlling Opportunities and Defining Accurate Contraction Points

As a trader, you can control the opportunities you interact with by choosing only the finest opportunities that make sense to you. Ensure the story is clear and that you've defined accurate contraction points to build your map from. When you feel you have a good sense of what's going to happen and it's not too late to the trade, it's time to get aggressive.

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Transcript

Full transcript of “The Best Way to Call Tops and Bottoms - Defining Master Pattern Contraction Points”. Click a timestamp to open the video at that moment. Need another video? Use the YouTube transcript generator.

0:00 what's up guys wade with trade ats here i'm about to teach you the most important form of technical analysis that's overlooked by 95 percent of retail traders out there this strategy is super simple super effective and it's only going to take you one video to understand it let's get into it so let's talk about what you're going to learn in this training i'm going to teach you how to correctly identify the forex master pattern and actually map it on your own charts now for those of you who do not know what the forex master pattern is this is the most consistent form of technical analysis it works on every time frame on every currency and it doesn't only just work in forex it works in stocks works in commodities it works in any financial market even cryptocurrencies so it's super

0:47 super important that you at least know about this pattern whenever you're doing your technical analysis this will allow you to break down the seeming randomness of the market and you'll be able to classify each movement as within a defined phase so no more randomness everything has a purpose and a story behind it you'll be able to connect that story together the correct mapping of this pattern will help you understand the market from the institutional perspective this pattern is actually the footprint that is left behind by the bank's activity and how they do business so you're not going to be looking at the market from a retail perspective with your indicators your moving averages your macd's you're going to be looking at the market from a money flow perspective from how the institution from the institutions have to do business

1:33 in order to create and facil facilitate the liquidity that they need to move their money around for profit so this is something we've studied at trade ats for over 10 years we know we're talking about we've trained hundreds of people on this exact pattern it has a long history with what you're going to learn here and this kind of information usually costs thousands to learn and we're going to give it to you for free we do have products and things that you can can go look at on our website but you do not need those you can everything that you learn in this training you can go on your charts you can do it for free it's just straight up good information it's the information that i wish that we wish we would have had when we first started out so here it is for free we asked nothing in return so this is a basic model of the forex

2:19 master pattern or what we also refer to as the three market phases the first phase is contraction which is a tightening of price the second phase is expansion which is the opposite of contraction it's a widening of price and then phase number three is the trend phase which is the inevitable move to higher or lower prices in a falling market one thing that i want to make crystal clear is that this pattern and the understanding of this pattern is not something that's proprietary to us at trade ats you can learn about this in a number of other places but the origination of this happens to go back all the way to the early 1900s with traders like jesse livermore and richard wyckoff they're really the earliest known traitors that started unmasking this

3:05 behavior putting framework to it and a logical explanation with how to interact with it since then there's been many traders that have adopted this and come up with their own explanations of how to interact with that and anybody talking about how the banks control the markets and how to follow the banks i would suggest that you take uh what they have to say and at least listen to it because i'm sure you'll you'll gain good knowledge nuggets from from anyone who's talking about this but what i want to make clear is that this is our take on it based on over 10 years experience and what i'm going to tell you in this training is how we feel is the best way to understand and interact with it that's all i just want to make that clear so that being said can you spot the master pattern in these series of candles

3:50 well it all starts with the contraction phase where is that right here that provides us with our market maker balance point this is the point that they balance their book of business out of that contraction phase we have the expansion phase which is the widening of price and then we go into the trend phase where they actually make a move to higher or lower prices in this example it goes to higher prices now we've made a video that goes over the general strategy and understanding of this pattern if you haven't watched that video yet i would suggest you go through our channel and go back and watch that video after this one because that'll really expand on this general pattern but with that video through our comments on youtube and and the emails we've gotten people had one major question with with

4:35 identifying and interacting with this pattern which was how do i accurately draw a contraction box how do i define the all-important contraction zone because that is where it all starts for identifying this pattern so like i said before it all starts from the contraction zone and that's what we're going to teach you how to define here and i'm going to take a few minutes and explain the significance of this zone this is a defined balance point on a chart where the market maker has conducted an equalizing two-way business between buyers and sellers so what creates this box or these zones is the dynamics of the type of business that is being done it basically you could think of the zone as kind of a reset point for the market makers and the large institutions

5:21 in this area market makers can evaluate supply and demand which allows them to create a portfolio management plan remember they're moving around huge amounts of money when this market pause comes into effect things are temporarily balanced out they can assess supply and demand and figure out what their next move is what is most important is accurately defining these areas on your own chart and then using them to map out the true framework that the market will respond to and obey so as you get series of boxes on your charts at different price levels you're going to notice that this creates a framework that the market responds to in an extremely accurate way and then you through those series of boxes you'll actually start to unfold the story of the market and what's going on behind the scenes

6:08 that's why these contraction zones are so significant to really get down and understand okay so now let's get into the nitty gritty of how to actually define these contraction zones on your charts so the main characteristic this is a leading indicator the main characteristic of the contraction zone is simultaneous lower highs and higher lows so literally a tightening or contracting of price it's pretty simple to see it takes a little bit of practice but once you start looking for it you'll see that the price constricting and that that's your clue that you're going into the contraction zone now there's also a lagging component that confirms that gives the ultimate confirmation that this zone is valid after the contraction and that is the

6:53 expansion phase so those expansion legs expanding high and expanding low after that box basically confirm that that was a valid contraction point so in a sense they point back to the contraction zone as well so you may be asking isn't it too late to identify a contraction box by its expansion phase wouldn't this be totally you know unusable information the answer is no there's countless situations where the market forms three or more expansion links some five six seven expansion legs back and forth where you would want to use that original contraction zone as a reference point so no this is definitely not late in a lot of circumstances so this

7:41 not only gives you time to discover trading opportunities but it solidifies solid points of market architecture that become key levels later it's all part of the framework that creates the real market architecture so let's briefly take a look at an example here this is the global master pattern view okay so we have a first swing high you see we form a high here and then it's followed by what we call a swing low so this is your first clue that you could be going into a classic expansion pattern something definitely to keep your eye out for you notice that we go up we have another swing high which is passing the previous swing high point followed by another swing low so you can see how price is starting to funnel out and open up here and then we have another swing high okay now what you need to get from this and

8:27 it started with the first swing high and swing low point that all of these high and low points point back to one central point and we call this the point of origin for this entire move so you want to constantly be scanning your charts for those contraction zones number one being with the contraction of price that's your leading indicator and then your lagging indicator number two would be the first expansion legacy span high expand low or expand low expand high it doesn't matter the sequence but that's what points back and solidifies that level as a key level that the market makers are using to balance or book a business now as you track these zones you're going to get more of them and as you get more of them as price flows you're going to see that it starts

9:12 to paint a picture of a map like structure and it's giving you all these the the major and the minor key levels that the market makers are using to manage their book of business and you'll notice that they all work together to tell a story and when you figure out what that story is you're going to have a much better sense of what the market's likely to do and better yet you're going to have static lines static horizontal lines to manage your trades by and control your risk with which it doesn't get better than that so hopefully at this point you're starting to see just how important it is to effectively track these contraction points on your charts so back to the question that we're repeatedly asked through email and on youtube is how do i find the forex master pattern on my charts in real time

9:59 what i'm going to do now is i'm going to take you to the live chart and we're going to do some live analysis and find these contraction zones and start mapping the market so you'll learn to do that here in real time okay so now we're in the charts here so the first pair i'm going to be looking at we'll go through a few of them but we're going to start with dollar cad right now and we're right up right right up till the to the previous moment we don't have any price data right now because literally the markets just closed for the week i didn't get around to do this while they were open but that doesn't matter what we're gonna we're still dealing with relevant market information uh here so that being said when you're looking for the contraction zone what's what's important it's not important that you find every single contraction zone on the on the chart you don't need to draw boxes all over the chart what is important is that you draw boxes

10:45 at the correct places that are relevant to where price action is at the moment where where is the live price uh at that moment and what contraction zones and average prices are relevant to where you're at there so that being said what we're going to do i'm going to i have the daily i got the 15 here i'm going to go over we'll start on the higher time frame which is the daily and if you haven't used metatrader 4 much before i'm going to actually give you a little bit of a tutorial here i'm going to show you how to actually get a box if you've never done it before you go up here to insert up here at the top and you go down to shapes right here and you just grab a rectangle and then you can just drag and drop the rectangle wherever you want on the chart you could double click on it you click the little middle dot right here you could drag it around and then you can resize it from the corners and when you're done

11:31 you could double click it again on the middle dot here and then that will pretty much kind of cement it in place you know and then just double click it you could resize it do whatever you need to do so that being said we have a box here so this is the daily chart you can see the dailies it's it's ran down you know it doesn't take a rocket scientist to see that but where is that contraction period okay where where did price where's the most recent spot that price really tightened up that we can see well just glancing over the chart remember you don't need to make this too difficult but glancing over the chart i see we push down right here and we have this blue candle yellow candle i could see that the price got pretty tight right here so that would be in real time that would be your first indication that you want to start paying attention to

12:16 that point as price is forming but what's even more important after that is see how the the expansion legs came out of this you expanded down here went below the low then expanded up past the high right here see this kind of unwinding of price going up and down these these highs and these lows coming out of here are pointing back to this as a central point so that would be a safe place to recognize as a uh as a market maker balance point so we would take our box we would stick it back there and i would basically just go off of this the low and high right there inside the box i that would be a really good place to mark as a contraction zone so we got that in there and then what

13:02 you want to do is you want to come up here and go to insert actually i'm sorry i take that back you want to go over here and just grab a line make sure you have the chart highlighted click the line tool right there and then go down and then you'll stick a line out uh and then you can double double click on it here if you need to move it around you'll get these little boxes at the edge and then you want to stick a line right there just in the middle of the box so on the daily on dollar cad that right there is your sensitive price level um you can see that we're well below it right right at the moment but basically what you can can the information you can get from this on dollar cad right now is that any more yellow candles that form below this level right now are you're going to want to trade short if price pulls back

13:48 all the way back up to here then if we get above then you'll probably want to start trading that long so but that is your sensitive point the real opportunity on this particular pair was right here when you have this rotation you can see the price whipped back and forth out of that and we really knew about the contraction and it kind of confirmed itself uh once we had these these first two expansion legs come out of here expand high expand low and then that pointed back to this being the really sensitive contraction point so as that came out you had this run up it had a a aggressive drop down the price moved up and that's that settling that we talked about in the other master pattern video that happened right there so this first rotation off of that is really the sweet spot when you want

14:34 to start looking for your optimal uh trading opportunities on the lower time frame you want to be careful as it goes farther and farther it doesn't mean you can't trade it you can still trade it if you want to but remember that the trends will will end at some point so um you don't want to see something that's ran away from that sensitive expansion level and gone down and you know for two three weeks sometimes they'll trend you don't want to get it when it's when it's already paid for a long period of time you the sweet spot is figuring out what's gonna happen in and around that that sensitive point so um i'm getting a little bit ahead of myself there so that's it on the daily that's really all you need to do you need to find that last relevant uh contraction period um sometimes we'll find more but we'll do that on other pairs here so we

15:20 got that on the daily that's our relevant point we want to use now on the 15 this is your actual trade placement this is where you're going to find a strong entry position so going off what i just said there before there are a number of contraction points but going from the the leading indicator which is the tightening of price and then the lagging component which is those first two expansion legs i see it in here you see this push down right here and then this push up see how price got tight and then it was led by and it expanded past the low and then expanded past the high so you have the tightening followed by the opening so that points back to this right here is the the most recent and recent sensitive point um one of the one the main ones you're going to want to deal with

16:06 we did have another one that looks like right here a minor contraction point it went hot went high went low price tightened then we expanded high and expanded low so you can use this one or you can use this one either one of those is going to give you relevant information to deal with this entire area right here so what i'm going to do i'm going to use this one right here because that one is we're actually we're still relatively close to that where live price action is so i'm going to go over here i got the chart highlighted i'm going to go to insert i'm going to go down to shapes i'm going to grab a rectangle and then i'm going to go ahead and stick that rectangle right here i'm going to go off of the low of this previous yellow candle and the high of this blue candle right here so let me resize this a little bit

16:52 and just like that i'm going to use that as my contraction zone then i'm going to go over here and grab my line i'm going to stick my line right there in the middle of that box and there you go there's your sensitive price level now look at painting forward uh you you really so you could have suspected this as being uh in real time when you saw the price contract like that uh you could have suspected that this is going to be a a a significant level for for the market makers and the smart money but again what really cements it in is that the following expand low expand high that points back to yes this is definitely one that we want to look at and you'll notice that with that expand high and expand expand low expand high we're still dealing in this price action range and that's

17:39 what i talked about in the presentation is this too late you could see that no even even with this this is actually excellent timing because number one you've defined the contraction zone point and you've also missed two legs of of whipsaw action and this kind of action destroys traders when they don't really understand what's happening there so you you've defined the point and you've missed the the death blow that most people get involved with uh and now you have this this exact line to define your buying and selling see how it got real reactive at that point here and how this this move starts to mature swing low swing high swing low swing high eventually it's going to stop breaking the highs and the lows and you're going to get a

18:25 significant deviation away from this price see how it came down and it held that exact price and then that rotation right there that's that's what you're what's that's really what you're looking for because you know if you sell that market right there your downside is just basically right here at this average price and you're not guessing here that's what i really want you to get from this you're not guessing the price action has confirmed this you're letting the market tell you the sensitive price level you're not going to impose your thoughts and beliefs on the market this all this this all happened and it formed in a very a simple way to define uh and it's in what goes on with the price action is it continues to respect that level because it is one of those sensitive

19:10 levels that you can use for a consistent analysis so um anyway i don't want to get too much on a tangent there but what i'm saying is the market when you do it right you'll notice that as especially as you get multiple expansion legs the market continues to get sensitive almost to the pip usually of that exact level and then the more sensitive it is the more you know this is something i really need to trust in the future and i need to look at where is that price settling and then you you combine this kind of information with the information that's probable to happen over on the higher time frame and then you have an extremely effective price level to come up with different trading ideas uh and and management points um so anyway that's that's it you want

19:57 to find that last one to deal with uh another one that i see in here see how we pushed that we pushed up long it didn't really go past the high we pushed down low this was a potential contraction point and all contraction points uh have carry some significance but the ones that that form multi-leg expansions are the most significant because that's the that's the market makers defining their dealing range um but every time you get a contraction there is that two-way equalizing a business so you could if you want to get more perspective it could be as simple as this literally one box here the most relevant you could find doesn't need to be perfect but the most relevant on the higher and the lower time frame that's where it starts but if you want to get a little bit more of the picture you can go ahead i see that there was a

20:43 good contraction here and also see that this respected that contraction point so what i'm going to do just for the heck of it i'm going to go over here to insert i'm going to go down to shapes i'm going to grab another rectangle and i'm going to stick the rectangle on that high and that low right there because i know that that was a sensitive level and then and i see that the market had already interacted and reacted to that level so i'm going to grab my line stick my line right here in the middle of that box and there you go so now i have two levels i have a dealing range between two sensitive price levels that is going to help me understand probability if the daily is going to continue to trade short let's talk about scenarios now this was a potential entry point

21:28 rotating short off the daily we're hoping that the next candle is yellow at that point headed down right if that's going to happen now you have some architecture to start asking yourself questions if the daily is going to continue to trend short what needs to happen on the 15-minute time frame to con to confirm that trading idea well number one is we would like to see because this has been respected we would like to see price hold below this that would make sense right so if you're going to sell the market you're a little bit a ways away from your danger point this is kind of the point of of definition of no return right where that idea would be considered to not be working out it may get noisy here but if it gets much above there then you know you may be headed in a long trend right

22:14 so if you enter right now when you're calculating your risk to reward and you're coming up with what makes sense financially to approach this opportunity you have this level now and you know that you're so far away from it it's a hard level uh not an average so you can figure out your position sizing finish figure out you know what you're going to do for risk based on that level now if it's going to really come around and keep pushing then your potential target you know just generally glancing at this chart i would expect that you'd want to see that you would at least test this low right here or and and when you test it hopefully it breaks and snaps it hard if you're trading the short trend right but on the on the smaller time frame if you're entering somewhere in here let's say ideally it would have been up here because

23:00 then you're tighter to your risk and you have this level of architecture here you see that it's respected it then you can see that initially for the progress of this idea to work out that you really need to get through this level don't you if this is going to pay you on the daily remember the trade is the daily if that's going to pay you you really need to get below this level so this would be your initial i'm not going to say profit target i'm going to say progress target this is where you need to get to know that this idea is valid it's making progress and by the time it gets here you know that you know that you're already in the money and once you get in the money now you have some choices as far as you know how how much room you want to give the trade when it gets down here you're in the

23:45 money and you can say you know i'm expecting that i'm going to get a hard break past this low and be well on my way and then if it does get past that low you're expecting that you're not going to come up above this level because if the trend kicks in you'll notice as you come through expansion levels you know it starts to respect them in kind of a stair-stepping fashion whether it's going up or down uh you'll want to see it respect that level at that point and in that point you have the profit from your entry to that progress target locked in and now you're in for the ride so that's you know that's your relevant uh analysis for usd cad right now this is relevant to use right now um as as we go the only thing i don't like about remember this just for educational purposes but the only

24:31 thing i don't like about it is that really the ideal entry points were up here you really want to reverse engineer the trade from your higher time frame you almost want to be you you can approach it this way when when when you almost just want to jump in on your higher time frame without looking at a lower time frame that's the time to start looking at the lower time frame it's not not the opposite because really this right here that was the driving move of the trade and that that respect of the expansion level right here that market making uh the market maker average price that really was the best clue right there with the lowest risk if the daily paid you which it did off that level you're immediately in the money if you're wrong well then you get stopped out right above it no big deal a big upside potential to

25:19 downside at that point we're far away from that point now so again doesn't mean you can't still trade it but you got to keep in mind where you are in the cycle eventually all trends come to a stop and at that point you'll want to wait for another box and then restart this process but remember that is the sweet spot and if you really want to trade safe wait till this opportunity comes to you there's nobody holding a gun to your head saying that you need to make the trade wait for this opportunity to come to you and then take action if that opportunity isn't happening then wait because it does happen all the time all right let's scan some pairs and see if we can find anything interesting and in fact we're not even going to mess with the 15 at first let's just look at the daily because remember the daily is really the trade and this this goes for whatever you're using for your higher time frame

26:05 in this case we're just using the 15 and into the daily so let's just let's just go from the daily chart first so pound usd we'll go to the top list um i don't see anything great we've already kind of extended on the daily uh could be new but now let's find something better aussie dollar uh starting to already run maybe another leg in it um maybe better on your lower time frames uh stuff going on there but no i don't see i don't see anything great on the daily bitcoin um interesting things coming in right there we're starting to come we you can see this is we're just in this overall um tightening range right here so um it's starting to break out of that could be some interesting things going through there but uh i think we find something better euro

26:50 dollar definitely nothing there already done the range already happened in here the entry point was coming out of here um not good for for doing any analysis on that at the moment dollar franc same thing nothing garbage dollar yen a little better but already had a breakout let's see if we can find something better euro frank ah good next euro pound huh okay so this is interesting just from what i'm seeing right here so let's take a look at euro pound okay so if the trade starts on the higher time frame where do we need to start here with euro pound we need to start on the daily chart so where do i see

27:36 based on just glancing of what's going on in this this dealing range right here where is the best place that we can spot a contraction zone that would be that would serve to to be a good reference point for what we're dealing with right now i see it it's pretty clear as day so i'm going to grab a box go up here to insert shapes grab a rectangle and i see we push down right here didn't pass this low we tried to push up didn't pass this high i see a tightening of price which is that first leading indicator and then the lagging indicator we broke the low trend didn't continue we went back up broke the high so this low and this high point back to this zone right here now why this zone is even more interesting to look at

28:23 why is that think about it for a second what's happened in recent history right here literally one two three four days ago well i'll tell you what happened let's draw our line here didn't we respect that right there that level so you knew about this contraction zone let me adjust it just a little bit i think it's yeah that's good okay you knew about this when you had your expand low expand high basically the minute you snapped this high over here on this daily you knew that i need to pay attention to this right as you came up came down respected it remember on the last one i said where's that sweet spot there it is so the ideal trade placement on this was right here that's your ideal spot but this is still pretty early and

29:09 that's a pretty powerful signal that's that's when you get that that blatant re respect of that that level what that signifies is is the potential that the market makers are done dealing in this range they're done with the whipsaw they're the same nope we're going to protect our average positions that we paid in the stealing range and we're going to move the market that does it always have to happen perfectly that way no it doesn't but again you can wait till it does that is up to you no one's forcing you to trade so we have some a pretty clears day clue right here right now so i think that would be safe to go off of on the daily and we're only four days into the run you notice that we really haven't snapped the active high which is right here if this does continue to run we can get a significant move past this high

29:55 and up past this high does it again does it have to happen no but it is a good place to start for formulating a trading idea and a trading plan associated with that okay so that being said let's go over here to the 15 minute what is relevant there's i see a couple things going on in here but what's relevant to price right now right now where we are well let's look for where where do we get the initial contraction and where do i see expansion links happening that's going to be the most sensitive point to start with and i see it let me expand this a little bit for you i'm going to go ahead and grab a box and i'm going to show you where it's my opinion maybe you have a different opinion but this is where my opinion is that as a position we should

30:41 be tracking this run push down didn't pass the low pushed up didn't pass the high price contracted leading indicator lagging indicator broke the low broke the high same thing that happened over here right so i'm going to take the high and low right there and i'm going to use that as my center or as my contraction point and also i'm going to use that because price is there right now it's it's getting hung up on that expansion level i'm going to get my line tool i'm going to drop that in right there move it get it adjusted right in the middle of the box there and there you go so now for this trading idea let's say that your idea now is because we have this clue combined with the what the price action

31:29 that's going on on the 15. a reasonable trading plan for this uh this we have a multi-leg expansion that's happened here if you get a significant momentum push now up through this level you notice that these pushes didn't make it but right now we're playing with that level if you get above here and would it be safe to just jump into a long trade right here in in line with the trend on the daily which is backing up the idea the answer is yes because you have this reference point market makers have proven that they this is their dealing range if it if it wasn't their dealing range we would not have a multi-leg back and forth expand high expand low points coming out of this they wouldn't have defined the range

32:15 they defined it we're just dealing with their rules right so as price goes up through here and begins to hold above there this is a safe place this is a i'm going to give you this this is a trading idea you know disclaimer you make your own trades you guys do what you want um you know you invest as you want but i'm just giving you my opinion here you can buy right here if you want and you can protect your risk below this line because it's defined as a sensitive price in trend you can see that it's been respected as we pulled up see how it bounced off that level here came down got through it bounced off the level right there this is this is the point that is very relevant for where we're at so if we get above that you can jump into that and then just understand that if this is really going

33:02 to make progress then as price gets up through here you get full candle bodies above that it would make sense that price really wouldn't want to go much below that level anymore and that you would be going where would your initial progress target be for this specific situation not your profit target but progress when do you know that you're really making significant progress and i would reference back to the expand low expand high points expand low expand high expand low where's expand high if it's going to go it's right here this very top right here so that would be your progress target and if you want go ahead and grab a line and stick your line right there on the top so as you enter the trade right here you know that we pretty much need to make you know relatively immediate progress

33:49 up to this level to really feel good about this opportunity and you would protect your position down below now if you don't get up here if it respects this and turns and starts heading short what does that tell you about the potential future of that daily candle it tells you that we could be headed for a yellow candle and that this is not quite ready yet either way you you're at the point you're at the level you're you're gonna know wherever it lands on on the each either side of this level there's a good chance that that's that's the defining point long or short and it's going to help you predict the future of the daily the daily helps you get the probability of the trend sustaining and the 15 minute helps you predict the

34:35 potential future of the daily they work together and you have to weigh them out together to figure out what is the what's the true you know plan of the market makers how are they gonna how are they gonna make money and when you accurately define these tipping points then that is where you're going to really start to understand what the potentials are and more importantly instead of using moving averages using all the other indicators that lag when the when the trades are already turned against you or it's not going your way this is a defined price level here this is this is a hard price it's going to be much much more accurate the horizontal lines are going to be much more accurate than just trying to work off of flowing averages so anyway that's it so that that would

35:23 be euro pound and i think that's that's what you need to work at and that's your your out your sensitive price level and that would be your initial progress target and and you would just wait till you get above that pull your trade protect your risk right below and if it doesn't go above that i probably wouldn't trade it short i would still stick with the the uptrend i would just give it more time it might go sideways and then when it goes above then hit it there don't don't force it you don't need to force it you let the trade come to you nobody again there's very few things that you can control as a trader you can't control when the market moves you can't control how much it moves how far it moves what you can control is the the opportunities that you

36:09 interact with it's 100 percent in your control so since that is in your control and that is a very powerful thing to control you have a choice to interact with opportunities that are only the finest opportunities that make sense not to someone else you don't want to take tips from someone else they need to make sense to you because you are the one that's going to have to manage through the trade so make sure it makes sense to you make sure that you see the story is clear and that you've you've defined accurate contraction points to start building your map from and then when you feel that you've gotten a good sense for what's gonna happen and it's not too late to the trade it's time to get aggressive so that's it so hopefully that helps with you guys

36:56 defining contraction points i know that's been a big question on our youtube channel how do i define those boxes that is how you do it it's not rocket science it's super powerful practice with it i guarantee you once you start doing this on your charts you will not be able to trade without it so it's a it's a super simple technique and it's going to dramatically help you guys so there it is hope it helps and we'll see on the next video

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