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    Elements of A Trade Setup

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    Guy Surrey
    The document discusses the four main phases of market movement: consolidation, expansion, retracement, and reversal. It explains that all market moves begin with a consolidation phase as market makers accumulate orders. The first expansion after consolidation gives insight into the market's likely next move. Expansions are followed by retracements, more consolidations, or sometimes reversals. Understanding these four phases is key to identifying a trade setup and anticipating where prices may go next. The document provides examples and diagrams to illustrate each phase.

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    Elements of A Trade Setup

    Uploaded by

    Guy Surrey
    2K views22 pages
    The document discusses the four main phases of market movement: consolidation, expansion, retracement, and reversal. It explains that all market moves begin with a consolidation phase as market makers accumulate orders. The first expansion after consolidation gives insight into the market's likely next move. Expansions are followed by retracements, more consolidations, or sometimes reversals. Understanding these four phases is key to identifying a trade setup and anticipating where prices may go next. The document provides examples and diagrams to illustrate each phase.

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    1. Elements of a Trade Setup

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    The document discusses the four main phases of market movement: consolidation, expansion, retracement, and reversal. It explains that all market moves begin with a consolidation phase as market makers accumulate orders. The first expansion after consolidation gives insight into the market's likely next move. Expansions are followed by retracements, more consolidations, or sometimes reversals. Understanding these four phases is key to identifying a trade setup and anticipating where prices may go next. The document provides examples and diagrams to illustrate each phase.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2K views22 pages

    Elements of A Trade Setup

    Uploaded by

    Guy Surrey
    The document discusses the four main phases of market movement: consolidation, expansion, retracement, and reversal. It explains that all market moves begin with a consolidation phase as market makers accumulate orders. The first expansion after consolidation gives insight into the market's likely next move. Expansions are followed by retracements, more consolidations, or sometimes reversals. Understanding these four phases is key to identifying a trade setup and anticipating where prices may go next. The document provides examples and diagrams to illustrate each phase.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    The key takeaways are that markets move in four phases: consolidation, expansion, retracement, and reversal. Consolidation is where orders accumulate, expansion is the initial movement away from consolidation, retracement fills gaps created by rapid movements, and reversals hunt stop losses.

    The four phases of market movement according to the Interbank Price Delivery Algorithm are consolidation, expansion, retracement, and reversal.

    The characteristics of an expansion are that it works with order blocks, it is the movement away from consolidation and equilibrium, and we wait for price to return to order blocks near the equilibrium point after an expansion.

    Elements Of A Trade Setup

    Required YouTube Series To Understand Concept Context


    ● Market Maker Series
    ● Precision Trading Concepts
    ● Sniper Series
    The Interbank Price Delivery Algorithm
    There are always going to be times when the market moves sideways or also known as a
    consolidation; in ICT terms: A Holding Pattern.

    When a consolidation occurs, the next thing we expect to happen is an expansion.

    All market moves start from a consolidation, which then move into an expansion, also known
    as an impulse move or impulse price swing.

    After the impulse swing, price either goes back into consolidation again or moves into a
    retracement. If a retracement occurs, markets are likely to move to another level of expansion.

    If instead price does neither after the initial expansion, price may form a reversal pattern. After
    the reversal pattern occurs, you'll see another retracement back to a potential consolidation.
    The Interbank Price Delivery Algorithm - Linear Depiction

    Retracement Expansion

    Expansion =
    Asian Range = Reversal = Reversal = Dead Time =
    Midnight New Expansion Consolidation Retracement Expansion
    Consolidation London Open London Close Consolidation
    York

    Retracement Expansion

    Consolidation Expansion

    Reversal
    Main Take Away
    All moves that take place in the marketplace begin from a measure of Consolidation because that is where Market
    Makers accumulate orders. The Market Maker keeps the market in a tight or defined range until there is enough
    money (orders) on both sides of the upper and lower end of the range being defined by the consolidation.
    Whichever side has the most amount of money to be absorbed as liquidity is the direction the market is going to move
    in.

    We don't always know what that is, and that is why we wait for the initial expansion. The first expansion that occurs is
    our clue as to what the market is most likely going to do. The third market move will then be retracement,
    consolidation, or a reversal.

    We ALWAYS wait for the first expansion, AFTER the initial consolidation, as that gives us all the insight we need to
    make a decision for the day. Now, sometimes it may expand so far that we can’t do anything about it, and the best we
    can do is to wait for the retracement or the next consolidation. There is nothing wrong with doing nothing.

    The main point is to understand these 4 individual market characteristics to a trade setup because price is delivered
    by 1 of these 4 conditions; it can't be any other way [CONSOLIDATION], [EXPANSION], [REVERSAL],
    [RETRACEMENT].
    Expansion - The First Move
    Expansion works directly with the tool Order Block.
    There is no Order Block without the initial Expansion.
    There is no Expansion without the Consolidation.
    ● Consolidation, marked in blue shaded area, the area where market orders build up in.
    ● Equilibrium, marked in purple line, is the middle or 50% point of the consolidation range.
    Note: you can use your Fib tool to find it.
    ● Expansion, marked in tan, is the movement of price away from the Consolidation and
    Equilibrium.
    ● Order Block, the last opposite candle closest to the Equilibrium point just before the
    Expansion move.
    We do not want to chase price. After an expansion from consolidation, we wait for price to
    come back down into an order block that Market Makers leave near or at the equilibrium price
    point.
    Retracements - The Major Pullback
    Retracements align directly with Liquidity Gaps and Voids.
    There is no Retracement without a Liquidity Gap or Void or Price Range to fill.
    ● Liquidity Void and Gap, marked in orange shaded area, the aggressive
    movement of inefficient price delivery that created gaps/pockets within a
    trading range.
    ● Retracement, marked in tan shaded area, is the movement of price
    attempting to fill in the range created by the Liquidity Void or Gap.
    We do not want to chase price. After an explosive, sudden movement up or down
    in price, in other words really quick Rallies Up and really quick Rallies Down in
    price, many times the price will later want to come back to the origin point to fill in
    the range.
    Reversals - The Stop Hunt U-Turn
    Reversals couple with the concept of Liquidity Pools.
    There is no Reversal without a Liquidity Pool to be taken.
    ● Reversals, marked in orange shaded area, the movement of price just above
    or just below an Old High or Old Low before completing rejecting and moving
    the opposite direction.
    ● Liquidity Pools, marked with the X icon, is an area just above or below an Old
    High or Old Low, where we believe retail Stop Losses and Stop Orders are
    situated.
    Note:
    USDCHF has a lot of this type of price action.
    Turtle Soups and False Breakout setups are perfect for this pair.
    Consolidations - The Accumulation of Orders
    Consolidation couples with Equilibrium.
    ● Consolidation, delineated with the Fib Tool, the area where market makers are
    allowing market orders to build up on both sides of the market.
    ● Equilibrium, identified in the Fib Tool, is the middle or 50% point of the consolidation
    range. Note: you can use your Fib or Gan Box tool to find it.
    We look for clear trading ranges.
    We identify the range defined specifically by the bodies of the candles, not the wicks.
    As indicated by the arrow, price moves out in an expansive manner then comes right
    back down into the equilibrium price point, and then expands to the outside of the
    consolidation range.
    Don't be Overwhelmed
    You just need to identify which phase the market is currently at, where it is likely to
    go, and where it came from.

    Over the course of this Month (September), you’re going to get an understanding
    of [How To Know Where The Market Is Going To Go Next], and that is going to fill
    in a lot of the gaps of teaching Directional Bias ICT

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