0:25

okay folks welcome back this is lesson two of november or the third month of the
ict mentorship
0:32
okay we're going to talk about institutional order flow and what makes it easy to
see
0:38
and we're going to be building a little bit on what we just mentioned in the
previous lesson
0:44
and we'll be using that euro dollar example and here's that order block we showed
earlier
0:54
we showed in lesson one
0:59
you see the open comes in at 151.987 and the low comes in at 51.45
1:08
and the low i'm sorry the high comes in at 5151
1:15
and 5143 so very sensitive there
1:20
the idea is if we see this on a monthly chart okay we can go into
1:28
the marketplace and anticipate an ideal scenario
1:35
to unfold in this area here okay now i'm
1:41
let's drag it up to the low because it ain't that big okay so we have that low to
the opening price
1:50
as we mentioned in lesson one we discussed that there was going to be a high
probability of stops
1:56
resting below these lows down here what i want you to focus on is look at
2:01
look how the bodies of the candles basically merge at that same general area
2:08
i want you to ignore the wicks okay ignore those and by having that
2:15
in mind
2:21
all below these lows in here there's going to be a large pocket of liquidity in the
form of cell stops
2:26
now if we're looking at the monthly chart like this and we think that there's going
to be a high level of sensitivity up here why
2:33
because it's already come up and closed in this range by coming up to this level
here
2:38
and if the market is most likely going to trade lower and seek the liquidity
2:43
below these lows in
Here now again for your notes
when we're looking at institutional overflow the idea is thinking like that market
efficiency paradigm
okay you're the market maker so what you're looking for is where is the maximum
level of liquidity
3:02
in relationship to where markets have traded from and where they are presently well
the market has traded higher here
so where's the highest level of liquidity from this point here if it's going to go
higher it would be above here but
we had this void that we closed in so the market has now rebalanced from a point at
which they sold first it moved quickly away came back up and
closed in that range
that created by all these down black candles so in other words the market has
delivered price going down
it has to close in that gap by trading it on the upside
so where forever wherever there is a black candle there must be a green candle
<----
the idea is you want to see where the market will reach for for its next level
liquidity ???

we have the run down here clearing out these stops market clears those stops and
then once
it clears those stops right below here in order all this movement over here all
this running of stops
yes it moves back to a order block but we're not talking about that now we're
talking about how the market will seek liquidity
4:13
the market will run up from this point here because it's already absorbed all the
liquidity down
4:18
here and yes just for completing the sake it's returned back to a bullish order
block over here which is the down candle rate for the up move
4:25
so the market's going to do what it's going to seek the liquidity on the upside so
where does that reside next
4:31
this up candle that's where they sold the last time and look we created another
liquidity void all these down
4:37
candles okay all black candles down okay so there has to be the market offering
4:45
on the buy side they offered it on the sell side so that balance it it has to be
green candles or up candles in this
4:51
case okay i all my down candles are black and all my up candles are green so
4:56
we have that same element just repeating itself here right here okay
5:01
now obviously we always look at the middle of the up candle mean threshold and you
can see how the bodies of the
5:07
candle respect that there's always going to be this extra little outrun on price
with the
5:13
wicks okay and i've mentioned this in many many instances over the last six and a
half years teaching forex online
5:20
that you have to allow that erroneous price action where it will rat
5:25
you know run farther than uh you probably would expect it to because of your broker
okay so they
5:31
allow them to open the spread up a little bit more so when price trades up it hits
this area of liquidity
5:39
now we're going to be expecting to see price trade too well the largest area
liquidity was
5:45
going to be resting below these lows right or this low rather
5:51
look closely just like we showed over here with the bodies of the candles okay
we're gonna
5:56
look at the bodies of the candles here
6:02
okay so classic technical analysis we'll say
6:08
well this this wick is the low and what i teach is it's the bodies of the candle is
where all the volume is
6:15
the institutional volume there's a difference now the wick is always going to be
directly related to retail
6:22
okay retail stops because we're looking at a retail platform most instances
6:28
you're going to see the wic is generally comprised of retail pricing
6:34
the bulk of the bodies close to the interbank prices you're going to get
6:40
so we allow the wix to provide us a erroneous price delivery or extreme price
delivery
6:49
but we want to do most of our analysis around the bodies of the candles so what
does that mean it means that if we have the bodies of the candles defined here
6:55
as the real low and allowing all this to be viewed as
7:01
retail if we scrub that over here
7:06
you can see how price trades just below the bodies of the candle as it would in
terms of seeking the
7:13
truest form of volume from an institutional uh order flow standpoint
7:18
if we're not going to break the range on this run here and we'll teach about that
in the
7:24
mentorship but for now we expect it to close in the range here
7:31
just as well we saw this up candle here this down movement price comes up and
closes in its range here
7:37
then it runs for the liquidity below here the point of what i'm showing here is
once you understand where the market
7:43
will most likely reach for and this is a monthly chart
7:49
now we can take a step back and say okay if i can define the market
7:54
in terms of and we'll say for instance say say we were lucky okay we were really
plugged in we were studying and
8:01
we felt that this market was topping out up here okay and we knew
8:06
that once this low was violated here we would have a potential range of that
8:12
clearing out this consolidation stops will be resting below that
8:17
okay we would see reasonably expected to run through that
8:23
we also know that we have a bullish order block right here now notice it wicks
through that
8:30
but the body of the candle this body's candle i'm sorry this candle body rather
8:36
trades right into this candle here okay so that's all it's required to trade into
order block now it's
8:42
a monthly chart now so we can expect some expansion through and to run the
liquidity over here look
8:48
at all the wicks okay the wicks are no significant barrier in terms of
institutional
8:55
overflow we just know that there's going to be a large reason to expect stops
resting below the wicks
9:02
we're inside the wicks let's say that way but below the bodies of the candle okay
so what we're seeing is we're
9:08
seeing another area at which
9:16
we have price trading from the buys of the candle we drag that over here
9:23
you can see price trades into that area right in here as well so it's seeking the
liquidity
9:29
below all these bodies of the candle and the wicks and recapitalizing this order
block here you
9:36
see the bodies of the candle look at how it's respecting that all the bodies stay
above
9:42
this candles bullishness now
9:47
we would reasonably expect to see price trading down to that level at that point
9:54
if we see this willingness to want to be
10:00
recapitalizing this bullish order block and we clear out the stops the next area
would be what the seed price reached up
10:06
into the void which is up here so we would see price want to reach up and
10:11
capitalize this price level so we have an area at which institutional order flow is
10:16
bearish until we get down to here then where is it going to do it's going to look
for the liquidity on the upside
10:22
this is the area which you would expect to see prices want to run up into so as
price is rallying up this is all
10:28
bullish so institutional overflow is bullish here then once it gets to this point
here
10:33
we're looking for what the stops below these lows here so we would see
institutional order flow
10:40
swing to the downside
10:46
now notice what's happening again the bodies of the candles are violated with this
down candle here
10:54
we clear out the stops okay and again we mentioned that it's re-chasing back into
this bullet or
10:59
block from here where would we reasonably expect price to go up to again that's
this bearish order block so
11:04
you want to see price reach up to here so in this instance we would expect to see
what price rally up
11:13
into this area so all through here institutional overflow is bullish
11:18
now i can keep doing this back and forth back and forth and show you example after
example but what i'm showing you
11:25
is from a monthly standpoint you take the information i'm showing you here and by
example
11:30
and again here's the bodies of the candle not the wicks it stabs through it
11:36
to go below the bodies of the count it doesn't necessarily have to go through the
wicks we only need it to reach below
11:42
the bodies of the candle okay so while we have institutional overflow that's
bearish when it's in the red area
11:48
okay all we're going to do is internalize the marketplace like this
11:53
so if we have it set up like this on a monthly chart all we have to do is break the
market
11:58
down into a weekly just changing it into a weekly chart okay so now we have the
price
12:04
shown in weekly basis all all through here we have
12:11
the market in selling condition markets in a bullish market condition
12:17
bearish market condition bullish market condition bearish market condition okay
12:24
so now what we've done is we've mapped out this entire euro dollar from
12:30
mid 2008 all the way to mid-2012
12:37
just by understanding what the monthly levels on institutional order flow will give
us
12:44
and understand those points of reference i showed you in september what to focus on
because that's that's
12:49
the recipe for all the trading you're ever going to want to do that's it that's the
secrets okay but you have to find them on the higher time
12:55
frame and arrive at where the higher time frame charts are going to seek liquidity
because this is where the
13:00
large funds have their money and where the large money is found on the fund level
that's where the banks are going
13:07
to reprice to it's not for the retail people because you're too small if we're
selling or expecting bearishness in here
13:13
okay this decline sees a retracement back up into and yes it wicks through
13:18
it wicks through but the body of this candle is where you'd be looking to be a
seller but this wick never violates this
13:24
up candle so we have a bearish water block retreated to and expands lower
13:30
price creates a down candle here right before this up move in in a time where
expected
13:37
institutional overflow should be seeing prices move up into that bearish order
block
13:45
great tears where you expect to see buying in an area at which bullish prices
should be expected until it gets
13:51
to this level here which is that monthly bearish order block be shown on a monthly
chart then
13:56
price would be recently expected to go lower to seek the stops below these candles
down here the bodies of
14:02
these candles and that's what you see here but look how the mark look how the
market provides us an opportunity of
14:08
real crystal clear uh delivery of price where we see price repelled it breaks down
14:15
okay when does it become apparent it's going to go lower see this candle here here
14:21
here here this last up candle that's the last green one when that candle is
violated
14:27
right there right here on this black one now you're going to be expecting price to
expand on the downside
14:34
price does it here trades a little bit lower then we have a small little
retracement higher what's
14:39
it trading back up into this down candle which is a breaker what's it breaking the
highs
14:45
here where initial sellers would be having their buy slot resting and then we clear
those out and we go
14:51
lower but this down candle is where they're going to populate new selling
15:09
right there you can see that i'm selling it right here so they're mitigating the
longs they use to buy the price higher
15:16
they make they take those orders off and then you see the acceleration going lower
all this area in here
15:22
okay we have up candle down move retracement back up into what what is this bearish
order block
15:33
so with this bearish order block
15:40
okay bearish order block right in here trades up into it and immediately sells off
again
15:45
what's institutional overflow reaching for it stops below here but why is this
signal forming here why
15:51
is this pattern forming because it's undoing the bias that was used here remember
the down candle is a
15:56
bullish order block and they should be buying there and it does look at this boom
explodes this cell is unwinding the lungs that
16:03
they put here everything is a hedge on in the bank level okay when you're seeing
price move from one level to the
16:10
next there's all buying and selling going back and forth in between those two range
extremes range extreme down
16:15
here range extreme up here then there's another range extreme here another range
extreme here and the range extreme here
16:22
okay so in between these two extremes there's going to be hedging there's going to
be
16:28
bookmaking where the the bank can have a net bearish book here
16:33
and be making money as it's going lower but they have to be buying too and while
they still may see price going
16:40
here and selling they have to take the orders off that they use over here that are
long and that's true that's why
16:45
you're seeing that unwinding right here everything is going to be on the opposite
side go over to the left
16:51
side of the chart and you'll see whatever they did to go long they're going to take
that off on the sell side
16:56
okay which is the basis of a micro maker cell profile which is what this is
consolidation
17:03
return to consolidation accumulation accumulation smart money reversal low risk
short
17:09
and redistribution another redistribution and the market reaches below the
consolidation here taking out
17:16
those stops once the stops are cleared out they're going to look for another layer
of
17:22
institutional order flow for the opposite side okay so that's going to be in the
form of
17:29
the return back to this bearish order block which we've shown on the monthly chart
the market trades up into that level here but between the point at
17:36
which it hits here and once it creates the run on the stops over here we would be
in a bullish institutional overflow
17:43
environment so we would expect to see the market trade back into down candles to be
re-bought in other
17:50
words new buying should be seen there this down candle right before the up move you
can see the price in here two
17:56
candles wicked down into this candle right here from the high down to the middle of
a candle it wicks into it here and this is kind
18:03
of hard to see it but that candle's low comes in at 21.51
18:08
so 21 51 is below this candle's low so it's down here and you can see that's what
i'm
18:14
highlighting right there's the low and it's inside this down candle so it's buying
and explain expand price out
18:20
higher then we have it retracement okay price retraces trades into what
18:27
this up candle so what's this they sold here at last up candle is they sold why
they sell there
18:34
to drive price below these lows in here so there's your uh your run on stops
18:40
so the up candle they used right here to get sellers below the marketplace
18:46
with their sales stop why would they want the sellers because their sales thoughts
become marketers to be a buyer counterparty too so it's the sell stops
18:53
below these lows they will activate them and buy them smart money will buy it up
once price
18:59
trades through that it'll come back down and trade right back into the last up
candle why are they doing that
19:06
because the shorts that they have on they have to take those off and mitigate them
19:11
so this wick down to the body is a mitigation block
19:18
so price comes down hits that level here the shorts that they use when price was
going up remember smart money sells as
19:23
it goes higher then he drove it lower right to run the stops price trades through
that
19:30
candle right here but their orders are underwater now as it's up here so when price
comes back down trades in that same range from the
19:36
high down to the body of the candle they can take those shorts off and buy them and
then you're going to see explosive price action why because it's
19:44
going to be buying a cover on shorts that are here and then buying more for
19:49
new net long position and you'll see expansion aggressively and you see that here
19:55
so now you have down candle right before the up move
20:00
in a time when institutional overflow suggests prices should be bullish while we're
in that shaded area
20:07
price trades down into the bull shoulder block new buying should take place and
expand up now when we've seen buying down here
20:14
or would expect buying in here the reasonable expectation would be to see price
straight up to this up candle first that's your first objective
20:20
then above this high for stops and then expansion up into closing in this range
here into this bearish order
20:27
block which is this last up candle comes back down buys bull shoulder block
20:33
expect it to run through here and then back up into the mirror uh monthly bear
shorter block
20:39
and it does that handsomely here sweeps it out and then we can see what price break
down again how do we know it's gonna be bearish because it breaks the
20:45
last up candle at an area where we would expect to see bearishness breaks it here
comes right back up at
20:50
the bottom of this up candle retrades to it you can be expecting downside
20:55
movement in price price starts to break lower one more time retrades back up into
this bare shoulder block for good
21:00
measure breaks down now it's going up it's going to go lower trades up one more
time works that same bear shoulder
21:06
block here finally gives up the ghost and trades back up into this high here
21:11
price rate trades lower reaches for the liquidity below here
21:17
below the bodies of the candles over here over here by reaching down and then
21:24
ultimately reaches below these lows
21:30
and back down into the bowl shoulder block right over here which is what we're
seeing here so if you start with your monthly and
21:36
you break down into the weekly chart we can go down to a daily chart now you see a
lot more definition on the
21:43
daily chart bullish candle which is the bears order block because price drove lower
retrades
21:49
right back into the bearish order block right here body's respect in the middle of
that up candle
21:55
sell-off market creates a bullshotter block
22:00
rallies through clearing short-term highs retreats back down to the last down
candle
22:06
bull shoulder block rally down candle propulsion candle rallies up
22:12
small little drop down hits the exact high of that candle here high comes in at
2802
22:19
[Music] the low and this candle comes in at 27.95
22:27
into this body's candle i'm sorry scandal's body rallies all the way up into bear
22:33
shoulder block now again we're in a blue shaded area so
22:39
while on the daily chart it's dropping lower lower lower lower lower lower the
institutional overflow on the monthly is
22:45
telling you to get ready for a buy so we get down to these levels in here expect to
see some buying but we have to
22:52
wait for price to want to show a break above a short-term high
22:57
we see that short-term high violated here so now we know buyers are in the market
again wait for it to come back down into
23:04
that monthly bullish order block we see it traded in here but now look what happens
this down candle here
23:10
rallies away it comes right back down into it now on a daily see the daily here
23:17
hits that bullish order block and then look at the react look at the reaction it
expands quickly now we have this down
23:23
candle draw that out in time buy it here buy it here rally's up this down candle
23:29
key filing institutional overflow the highs 3436
23:36
the low is 3423 right into this down candle again buy it
23:43
again boom explodes keeps going higher and higher higher
23:49
goes into consolidation
23:55
every new buying finds a down candle you go right back to the previous down candle
here
24:00
buy it again rice price rallies again price dips back down into what this down
candle here buy
24:07
it again the down candles in here all one order block halfway point through that
right
24:14
there boom buy it again rallies through keep in mind of the monthly and weekly
24:20
order blocks as we're seeing it again in here you see the response boom it rallies
that's why you don't see anything over
24:26
here notice there's no bullish order block in here there's no any any kind of point
of which you would
24:33
see oh that's this is what that would be no it's found on the weekly and the
monthly that's why you see this response here
24:40
price rallies away comes back down trades into bearish candle which is a
bullshotter block
24:45
and then this one really did it traded right into uh below 4626 into this order
block right
24:52
here and rallies again you can see the shaded area we had again from the monthly
24:57
and rallies again explodes up into monthly bearish order block glasstop candle
25:04
right here this one when it violates that does it here expect to see bearishness
wait for it
25:10
boom it breaks so when price breaks down you're going to be waiting for a return
back to
25:17
a either a breaker or a bearish order block or you can look for a stop run on an
old
25:24
high so we're in an area where we expect the seed markets continuously moving lower
25:31
on the daily chart we can be using all these old lows to see price reach for them
or expand down so institutional overflow
25:38
is suggesting lower prices especially from the monthly and the weekly now we're in
25:44
a daily chart time frame when the institutional overflow should be weak or bearish
25:51
when the market creates a return back into a monthly order block here it becomes a
25:58
mitigation block on the daily chart because now we're unwinding what was used to be
bought here
26:04
which is a breaker what is it breaking this old high
26:10
that's where we're seeing it right here you can clearly see it happening here on
the daily chart but it was seen on the
26:15
monthly and on weekly all through here
26:22
all through here in this red area every single time the market creates a
26:28
new bearish order block or if it creates a run above old highs
26:33
we see the old highs here runs through them sell off old highs in here runs above
it sell off hold high
26:41
here runs above it sell off and we also have bearish order blocks last stop candle
right for the down move
26:48
sells off last up candle before the down move retraced back to it sells off
26:56
blast up candle even in this sloppy mess right through the body of the candle right
there boom now we're in a bullish
27:04
area on institutional overflow and you would expect to see all these levels which
are being found
27:10
on the monthly in the weekly look at the sensitivity that you see on the daily now
27:15
we have this last down candle here wait for the up move price trades into it here
and it's on a higher time frame
27:21
order block down candle here as well buy it again
27:26
buy it again price explodes look at the sensitivity right there
27:33
again this level was arrived that on the monthly and weekly and look at the
responsiveness you're seeing price
27:41
and what's it reaching for liquidity above the old high and a better shoulder block
on the
27:46
monthly so what you're doing is what institutional order flow is
27:52
it's the seeking of large institutional liquidity and it's going to be found on the
27:58
monthly and the weekly and you see that being traded into on the daily that's
28:04
why i tell you on the daily chart and again this is what we're looking at daily the
daily chart will always seek
28:11
the fund level institutional overflow in other words the stocks that are found on
monthly and weekly charts
28:17
you're going to see all your signals to have the greatest magnitude the biggest
moves that take place are always going
28:23
to be found on that monthly and weekly basis because that's where all the large
whales are okay when i say whales i'm talking about
28:30
big funds large funds okay and when they have money at risk
28:35
that's where the market's going to go because that's orders that they can counter
party with the banks cannot counter party with you
28:42
and i we're just not big enough even collectively we're not big enough but the
funds because they're
28:48
controlling billions and billions of dollars and they're that's where the money's
at so if you can find the levels
28:55
on the monthly weekly chart keep them on your on your daily chart you'll be able to
see all these major shifts in price
29:02
that sometimes jump off at you after the fact and you wish you would have known
they were coming now you know how to see them by
29:08
transposing them from the monthly to weekly into your daily chart if you do your
trading around these
29:14
levels you will see every significant price swing that they ever transpires on
price
29:21
you'll see them coming before they get there and you'll also know relative to
institutional overflow where the stops
29:28
or liquidity is above the marketplace when you're ready to buy it or when you
expect a bullish scenario to unfold
29:33
you'll already know where the market should be reaching for should it take off and
start trading higher
29:38
when it goes up to a level of resistance or some kind of bearishness before you
even sell short you're going
29:44
to know where it's going to be reaching for which is the cell stops below the
recent lows or a bullish order block
29:50
and by having that idea how the market will continuously look and seek liquidity
it's not our liquidity it's
29:56
not our stops it's looking for it's looking for the stops found on the monthly and
the weekly and daily
30:02
because that's where the whales reside that's where the large funds reside and
that's what pushes price around
30:07
understanding that that's why the market will go to these levels because it's
wanting to take those participants
30:12
either out of the marketplace or draw them in as counterparties to their intended
purpose
30:18
either being a buyer counterparty to sell stops or to be a seller counterparty to
buy stops
30:24
and that's the nature of institutional order flow so with that guys i wish good
luck and
30:30
good trading