The Realignment.

Using multiple timeframes to

locate a trade
How to use multiple timeframes to locate the timeframe where to place your trades.

Questions

The Sequence and The Realignment

What is a nested imbalance?

Can a zone be nested if it's not contained entirely within a bigger timeframe?

Different sequences result in different trading deicisons

The Sequence and The Realignment

The sequence and the realignment concepts are a mechanical approach for a top-down analysis
that will allow us to do the same kind of analysis over and over again, thus reinforcing the rules
and our beliefs in what the rules we trade. We must choose three timeframes for our sequence
and learn about the trend for each of them.

Each timeframe will have its trend and imbalances, completely independent from other
timeframes. The main idea is to have aligned as many timeframes as possible in the same
direction.

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These rules state where the price is most likely that a predictable move will happen. Price can do
anything, we're talking about probability and tested scenarios/environments here

• Choose three timeframes for your sequence. MWD, WDH4, anything, and stick to this
combination. Don't add more. If you add more you will always find a reason not to take a
trade, don't over-complicate things.
• Draw last bullish and bearish trendlines on all the three timeframes to locate the latest
imbalances.
• Start your analysis from the highest timeframe in your sequence and step down
timeframes until you find the first timeframe where the trend has been broken, as shown
in the screenshots attached.
• Once we have located the timeframe that has lost momentum and alignment, switch to
one timeframe higher than the one where the trend is broken, and wait for the price to
hit a valid imbalance to keep on trading in the direction of the higher timeframe's
direction and realign with the HTF sequence and trend.

The following slides use the Monthly, Weekly and Daily timeframes as an example. Any
timeframe combination can be used, but I highly recommend you to use this combination
because I guess you want to have a life, maybe I am wrong, and you love staring at your trading
platform for hours chasing for trades. The number of trading opportunities often limits traders
due to the time it takes to analyse multiple markets. When analysing the bigger imbalances and
sequences, we will be able to move through hundreds of markets at a relatively fast pace. Less
time in front of the computer, less stress and less over-analysis and over-trading, resulting in a
better life and relationship with your couple, children, family and friends. Family and friends are
away more important than your trading my friend, do not ignore that fact, far more important.

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The scenarios below do not explain all possible combinations where one each timeframe has a
different bias. The idea is to trade in the direction of the top timeframe of your sequence.
Any scenario not included in these three slides will be considered advanced and will require a
thorough understanding of price action and counter-trend scenarios (not covered in the core
rules).
What is a nested imbalance?

Nested zones are supply and demand imbalances that are located within a higher timeframe
zone than the one where the imbalance has been detected. These nested zones can be used to
lower our risk by drilling the entry timeframe to a smaller zone at a lower timeframe.

For example:

• An H4 demand zone at a D1 demand which is at a WK demand zone with the WK/MN in

an uptrend is a way to drill down our entry to have a lower $ risk entry at a much
narrower level.
• A D1 demand zone within a WK demand zone with a WK/MN uptrend is an excellent
way to reduce our entry-level for a lower $ risk entry.
For a zone to be considered nested, does the LTF zone has to have both their distal and
proximal lines inside the HTF zone, or can the LTF have only the distal line inside the HTF and
still be considered nested?

The nested LTF zone may straddle the HTF zone: e.g. a nested D1 DZ within a WK DZ -
the D1 DZ may have its proximal line slightly above the proximal line of the W DZ, subject to
the D1 DZ having its distal line within the W DZ.

See an example below using Netflix #NFLX American stock. Strong D1 demand level at #2 is
nested (contained) inside the W demand level at #2

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Nested zones combined with the sequence and the realignment concept is a very powerful and
mechanical way of lowering the risk in our entries.

Can a zone be nested if it's not contained entirely within a bigger timeframe?

Yes. A nested zone can be contained entirely within the bigger timeframe. The zone will be
considered nested as long as it's touching or overlapping the bigger timeframe's proximal line.

Different sequences result in different trading deicisons

Multiple sequences can coexist. You must choose a sequence and stick to it. Experience will tell
you how to use multiple timeframe sequences in your favour.

It's very common to see multiple sequences happening at the same time, which is why you
should always stick to the timeframe sequence you've decided to trade and ignore the other
sequences. It's a good idea though to have a look at one timeframe higher to see whether your
sequence might be going against a strong opposing imbalance on a bigger timeframe.

See below a few nested sequences for US DOLLAR #DXY

• 3M sequence. 3M SZ in control, too high in the 3M range to go long at W demand

zones. We would be waiting for new W SZ to be created instead. Shorts if new W supply
zones are created.
• M sequence. M SZ [1] in control. Last M bullish impulse not strong enough to
consolidate away or accomplish anything. No longs allowed against it at lower
timeframes.
• W sequence. W uptrend with W DZ [2] in control responsible for eliminating [3]. Longs
bias.

Seeing the big picture location on both M and 3M sequences, it tells us that the W DZ is in
jeopardy and will most likely be eliminated. If unaware of those bigger timeframe supply zones,
then longs are possible. It's highly recommended to take a look at the bigger timeframes to
learn why the price could be reacting the way it does. In this case, we learned that M and
3M SZ are in control, so it's a big NO to longs.