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welcome back folks this is teaching 3.4
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of eight
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of december 2016 ict mentorships content
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we're dealing specifically with the
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reinforcing order block theory and
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reclaimed blocks
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okay
we'll be looking at the market maker buy model first and what this essentially is
is when the
market drops down and has a price swing lower reaching into a higher time frame or
immediate term support level and that support level can come in the
way of an old high it can come in a way of old low it could be a bullet shoulder
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block it could
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it could be a filled
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void or closing in on a fair value gap
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any one of those things could lend well to a price support level
but the idea is we're going to be anticipating that market move lower and
you can anticipate it and watch it go lower and be short or if you look at it
and the move has already transpired.
if you notice you have seen the decline down to support level we can
start looking at specific levels to watch for reclaimed order blocks
first we have to understand the Sell side of the curve on a market maker by model
that's the drop down into that support level before we see the move higher
the market makers are going to be scaling in early so they're going to
have areas at which they start buying early because their positions are much
larger than us as a retail trader they require a great deal of movement
and time to price in their orders
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because they can't facilitate their entire order on one transaction one
specific move from a level they have to scale that position in and that's in the
form of hedging
as the price drops down into the lower level support
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they're going to be building in more positions and you'll see as you watch price go
lower and lower.
they'll be small little transactions that cause the market to create short term
little lows in the market
so as the market moves lower
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every time we see a small little bounce in price action that is a minor
displacement showing
that there was new accumulation being taken into the marketplace.
in other wordsthe smart money is actually accumulating new long positions
you have to have the understanding that that lower level support that it's reaching
for is
going to be the ultimate price level
it's most likely going to have its impulse price swing away from prior to that low
being formed like i
said there's going to be initial short term rallies that take place many times
traders that are looking at
those as entry points they end up getting stopped out because what you're doing is
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they're piggybacking on an entry that is based on a hedging motive on the market
maker so as the lows keep creating lower
lows but every time the price makes a smaller short term move higher
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we're going to be referencing that last down candle because that's a bullish order
block
but it's occurring we're watching the bullish order blocks or the down candles
right before a small little price moving higher during the sell side of the curve
now this this market maker buy model the curve is basically a price swing lower
that
trades higher
that's all market maker buy profile is or market maker buy model it's just
understanding that the market is going lower to go higher
eventually we'll see the price move higher off of a major support level
and we'll start seeing the buy side of the curve come underway
the market will start pricing new higher highs and as it does we're going to be
focusing on those
down candles during the cell side of the curve every time there was a bullish order
block that was created
on the major price swing going lower and it saw a little bit of a minor movement
higher that has indicated that there was hedging going on and that down candle is
what we're going to be looking to reclaim or watch price recapitalize that old
order block.
now that we're on the buy side of the curve every new buying opportunity is going
to be matched up to the
previous down candle while the price was dropping earlier on the cell side of the
curve and ultimately everything will match up
with the down candles on both sides of the market maker by model.
so what is a bullish reclaimed block is a candle or bar that was previously used
to buy price and a short term bounce
confirms minor displacement in the buy side of the curve these old blocks or down
candles will be reclaimed for new longs
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let's take a look at what it looks like in price action
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we see the market dropping down from november 24th into november 29th
okay so we have a market maker buy model where the market's going down to go higher
see here this down candle
on the buy side of the curve right here
this down candle right before this movement up here this displacement shows that
this was an actual hedging where
they were buying early and the market drops lower okay .
once it makes its low here you can see the price did in fact come back down to this
same down candle
right to it here and was reclaimed or they recapitalized this old order block here
and price started to move higher
the next level is here this movement down prior to this displacement here all of
this movement here this down
candle is a bullish order block on the right side of this low now we're on the buy
side of the curve and that's what
this movement is here hits it right to the pip and then price moves higher
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so they are two examples of reclaimed bullish order blocks
okay
now we're gonna take a look at the
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market maker sell model
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this is just the same thing just in
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reverse where we're anticipating the
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market to trade higher to go lower
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you may not see it happen before the
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fact you may notice that the market's
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making a high and you expect to see a
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sell-off so we can use this information
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just
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by focusing on the buy side of the curve
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every up candle that sees a displacement
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or a short-term decline
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confirms that there are
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hedging underway
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that means that they're selling short
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early and market makers are selling into
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these rallies when we get to the sell
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side of the curve
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every single time we see the market
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trade back up into a up candle or
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bullish candle right before the down
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move during the buy side of the curve
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that bearish order block is going to be
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reclaimed
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and you can take that as a new short
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and again matching up during the buy
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side of the curve while price is being
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built up into a premium
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the market makers are actually going to
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hedge into that rally selling short they
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have deeper pockets than us they can do
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this for a longer period of time
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and as they do this their pricing in
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more short positions
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we can match that up and see it like
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x-ray vision into price action by
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looking at every single up candle that
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has a small displacement or short-term
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decline that's confirming that there was
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hedging on the wave again we understand
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that market makers and smart money
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they're the only ones that can move
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price around so if there is a
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displacement in price and we see
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bearishness after an up candle we can
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assume that this is going to be evidence
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that they have been hedging and selling
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short early
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when we get to the high and we climax
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there and start trading softer and going
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lower every time we retrade back up into
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that old previous up candle during the
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buy side
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but we're to the right of the high
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that's already formed we can now take
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new shorts
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at these old bearish order blocks
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everything matching on the buy side of
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the curve to the cell side of the curve
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so again in summary a bearish reclaimed
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order block
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is a candle or bar that is was
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previously used to sell price
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and a short-term decline confirms minor
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displacement
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in the cell side of the curve these old
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blocks will be reclaimed shorts or new
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entries for short positions
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all right let's take a look at this
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chart we'll take a
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look at the example of a market maker
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cell profile
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and using the reclaimed order block
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we're gonna be looking at the cell side
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of the curve or to the right of the high
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and we're gonna be focusing on every up
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candle that showed a willingness to see
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price drop during the buy side of the
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curve or to the left of the high that
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formed
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you see here
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the last beefy candle right before this
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drop down
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price trades up into it here
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and sells off
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the nest next example is
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this up candle here which would be a
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bearish order block
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would be reasonably seen as in the free
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tutorials you would think that this was
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probably a bearish indication to start
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looking for lower prices it doesn't do
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that here it trades through it but we
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see a climax high so now we see price
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doing what it trades up into this up
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candle this is a new short
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another example here this last stop
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candle here price trades up into it here
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very handsomely sees that as a
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displacement lower here so you started
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hedging here
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this is a selling short opportunity to
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see the completion of the market maker
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cell profile
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so again in summary
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we use the market maker buy and sell
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models
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to
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be able to match up old order blocks
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during the buy side and the cell side of
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the curve and we wait for that reclaimed
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mechanism that takes place where the
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market makers will use these same
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reference points
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and facilitate new positions
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we'll build more on this idea as we go
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through the coming months of material
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and you'll see examples of it before the
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fact and i'll be able to map it out for
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you but for now study these examples and
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also go through your charts and find
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where you can see during price rallies
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like this and declines
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map out all of the up candles and during
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the decline side of the marketplace
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you'll see that there's wonderful
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opportunities to get short that you
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would otherwise not notice
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until next time i wish you good luck and
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good trading
