ICT: Okay guys, welcome back we are in volume three of the positioning concepts video series is the last in the series. In the first series volume, we talked
about weekly order flow. And the second volume, we talked about weekly order blocks. And now to bring this series to a conclusion, recipe, I'm looking at the
concept of trading inside the range. Okay. And it's a concept that I used to teach my kids how to trade with it. And I always try to find a way to
conceptualize what it is that I see in the marketplace. And because I don't have another source, readily available, so I can just take them to insect This is
what it is that I'm referring to. I kind of dubbed it as an L seven range. Okay, and l seven. kind of silly sounding. But what is it exactly? Well, whenever
you're looking at a price chart, and I have purposely picked the US swissy pair, and it's because I believe this is the king of volatility in terms of pairs. If
you were to look at any one of these reaction high in reaction low, this is a daily chart of the swissy. I want to draw your attention to a few things. And
I want to show you that if directional premise is a stumbling block for you. It need not be because it is not necessary for you to have a directional premise at
100% of the time. Okay, if you're comfortable trading inside of dealing ranges, okay. It's quite lucrative, actually, if you understand what is specifically
you're doing when you trade inside of predetermine range. And what do I mean by that? Well, the reason why I dubbed this as an L seven, inside the range concept
is because if we look at, say, for instance, this range here, okay, this low to this high, and we'll define it by this. And this is a rather simple concept. But
it's absolutely amazing if you apply it in your trading, and actually if you start looking at it as a training, exercise, trade within a predefined range,
because young, our understanding is is obviously the markets are 70% of the time in a trading range. Now, the definition of that, okay, was one of the longest
stumbling blocks for me as a trader when I was first developing, because I always misunderstood what they were saying. Like, I assumed this was the trading
range here, okay. But I looked at this and said, Okay, well, this is a trading range, okay. And look how much time it spent out of there and it rallied up here
and rallied up here. To me, it seems like it's always trending and spent very little time inside of a trading range. It wasn't until I understood the the
natural ebb and flow in the marketplace, where it became quickly apparent as to what that statement means when markets are 70% of the time, instead of a trading
range. We have a high here and a low here. The the range is defined by this low and this high, the likelihood of price moving out and continuingly to move
higher is rather low. Okay, in other words you have the way I interpret it. And you can go with this if you want. I view this as we have a 70% odds that this
market is going to have a very difficult time breaking out to run to new highs. Now it could stab through. The way I interpret that is that as the market begins
to move outside of that range, hi. That statement indicates that it has a 70% chance of failure to move to new highs and continuing higher. Okay, yes, we see
a violation on a few candles on a daily chart where it did in fact, sweep above that range high back here. But ultimately, what did it do? It returned back
inside of the Define range of this low. And this high back here. Okay, so how can we use this information? And what does it mean to us as a trader? Well, as
price trades down and makes a low here, I'll ask you this. What do you think the least? least road of resistance, okay? Is it to go higher, or it's good go
lower. Because we've already went lower than this low here. We went lower than this low here. We took out this high with a very small minor move here. But
we've recently started to move higher. If you start looking at this, like a letter L, okay, in envision a letter L here. We're trading down here at these
levels here. Where is the point of reference for this range? If we're at the lows here, it's up here. Okay, so now how do we incorporate that? Well, at this
old high, if we start looking at the order blocks that represent the selling that caused this market to drop, we'll look at a few of them. We have this is a
Sunday. So I'm going to avoid that. We're going to say this is the first bullish candle prior to this Sunday here.
And if we're down here, we could look to see if price would rally back up to that price point. Now, yes, invariably, we could probably see it retest as high.
But what do we what do we already state that markets have a 70% likelihood of staying inside of predetermine ranges. So if we could find a long down in here,
we could look for this market to move higher up into this level here. Now, also note that we have
this shorter term range from this high and odd was note the bullish candle prior to the drop down in this low here. So this is a pre determined range as well, if
we were long here, we could look for initial objectives in here. And if this highs take out, reasonably expect this order block here to be retested. And if
it continues to control even higher, we could retest this high here and maybe look to see some kind of sweeping event like we see many times in my videos or
in commentary. So as the market also traded in this range with this high here, in this low, the range was this high in this low? If we could find a long in
here, we could trade inside the range and look for this bullish I'm sorry bearish, rather this bearish ICT order block to be retested. Okay, we entered
into that same area had a small little turtle soup, which is a false break above old high, and then rejection. Okay, but I'm not trying to teach that pattern
here. So I probably shouldn't have said that. So it is what it is. But any longer here, your objective would be to look for the counter order block that
saw price drop down, okay, we we try to trade back up into it, this would be a known level of institutional selling. Okay. And you can see that does in fact,
come on their way. The market does drop down precipitously. We're using the L concept and here of this con is this particular approach, okay? And it's
probably an oversimplification, okay. But to me, this makes sense. And it helps my kids learn this as I teach it to them. So we have a point of where we are
now, and where do we go from here? Well, The range ties here. So that would form a letter L. Okay. And it probably sounds like Sesame Street to to people in the
States. But it really is a rather simple approach. Now, how do we approach a seven range? Okay? Or the constant? How does this seven come into play? Well, if
you look at, let me get some of these lines off here, because it's going to get in my way, price at these levels. Okay, and we're not going to reference
anything over here. For now, we're just going to look at where we're at in terms of the dealing ranges and such. We have this high here. And we see price runoff
back into the order block here. And then we start to sell off if we were able to see something bearish back here. Okay, the point of reference is what, here's
the area where we're at the likelihood of us continuously breaking higher. Okay, because this was the previous high price rally out of that. Okay, now it's
several 100 pips because it is a daily chart. But look what happened, it was unable to stay above this, this range high. So it pulled back inside of the
range to run below this old low. But more importantly, okay, it's this range low here. And the new high that formed.
We have dealing ranges this high. This low. So if you're up here, hunting sell signals. Okay, where's the range? Well, we have several ranges to deal with. So
that's the question and why I always ask, Where are we inside the dealing? What what dealing range are we within, we have these highs, we have a reaction low
here. So that's a point of reference. Okay, this is one point of reference. This is another point of reference. Not a point of reference. Another point of
reference, okay, so these are all ranges that price works within while trading, okay? This low here, price bounced off, this is pretty, pretty nice. Obviously,
price came down into this low here sweating just a little bit and then rallied even more. Okay? Price, when we made this range here.
We had this high in this low. Okay, where's the path of least resistance, okay, it's going to be on the upside because it's been dropping Lower, lower, lower,
lower, lower, lower, lower. And now Dolly thing that we got to consider is where the stops are. And that's where the price is going to seek it's going to seek
liquidity, because everything's been going lower. So eventually, there's going to be an A low and selling. So what happens is, the market will reach up and
seek out liquidity above the short term highs and see if there's any stops. But still notice even as aggressive as this bounce was and rally higher. Where does
it run back to previous order block? Okay, this bullish candle prior to drop lower, if you want to use this candle as well, you're still within that same
range, okay. Here. Okay. So, inside this range, we've come all the way back up to here. Okay, so now, again, while price is right here, is it likely to
continue and break through this high and trade under the new highs? odds tell us statistically that 70% of the time, price will stay inside of a range. So as
price rallies on up here aggressively. Okay. When we start moving back into these dual bearish order blocks, it's reasonable to expect this market to try to
look for sell scenarios or sell patterns. Okay. Now, Where's it? Where's the range at this point? Because we have this high here.
And this low where it came from originally down here. So the order block that resides out here is this one.
Okay, so if we sell up in here, we could reasonably expect it to come back down in this area. Okay. And maybe retest this low, but again, we have a 70% odds
that it's going to stay within this range. Okay, price comes down. Does it break this low? No. What does it do it rallies once more. Okay. How Why is it rallying
up here? We have high here. We have short term high here. Okay, this is a this is a bearish order block. trades back into this is a bearish order block that it
trades back into Okay, the range is this short term high to this short term low notice we did not classify it as this low because this is the this is the true
range here, this is the range that has not been violated this high in this low. So, as we have the short term high price moves from this point down does not
break this low and rallies back up whereas rally up to above the short term highs taken out any liquidity is resting in the marketplace is short term high
here in the short term high here. Okay, both being order blocks that it does trade within. And then what does it do it sells back off now. We do see price
violate this low and the old reference point low here. Okay, it, it breaks below it. it sweeps back into the range here. Now what's going on here? Well, we have
a new range. We have this high here. And we have a new range low here. Okay, to have this high to this low price rallies on up. And where's it go back to a
previous bearish order block right here, this candle right there? draw that out and find you see it, tag it right there. So now, what are we saying here? what's
what's the what's the premise behind this? Well, if you understand where we are in terms of the present, trading range, you don't need a directional premise.
Okay, you can trade very, very short term, either intraday or day trading or short term trading. Okay, with a premise in mind that is long as you know,
you're not going to overstay Your welcome. Okay. You have the likelihood of, of taking short term, intraday scalps, short term intraday price swings, and short
term trading. And capture a lot of these little little moves here. Now, if you're very disciplined, you can do this over and over and over again, with a
good pair like this. Like I said, the swissy is pretty volatile. And this gives you a lot of opportunities to trade like this. I don't trade the swissy a lot.
But if I do trade it, I trade it in this capacity, because I don't feel that it's one of the pairs that I can trust because it's very, very volatile. It
comes down a lot takes out low stakes or highs. And it's it's characteristic is very, very range bound. And you can trade a lot of setups with this with this
pair. You have a bullish order block here. Okay, price dips down into rallies. Okay. And you can take profits in here. Yes, evaluates and goes through it.
Okay. But look at the profit potential that's available by understanding where you are in the range. That's 280 pips. Catching up, I like that. Just so you
know, I'm not cherry picking. We have a dealing range low here and dealing range low on high here. Okay, price rallies back up to what the old order block right
here. sells off? Where's it go down to this range high to this range low to the previous bullish order block right here. Okay? Don't buy, take profits at old
highs. Okay, sure, you can hold on to higher prices, but there's no guarantee it's going to do it. Remember, we have a 70% chance that price will stay within
a range. So you can take a large portion of your trade off maybe 80%, Li 20% on these types of incidents. That's what we're talking about. When we talk about
taking partial portions of our trade off. You want to be doing it with a systematic approach to it,
but a framework as to why you're doing it. Because as we trade up to here, there's no guarantee this is going to continue going up, it could deeply
retrace, and you'll have to ride through all that. And many times, it could just continue to trade lower and blow out your stop. So it's it's very, it's nicer as
a trader to take some profits as a logical place of resistance, where we could see potentially a retracement where we don't want to ride through that. Okay,
because if we're at the extreme of the range, we want to hopefully see this continuation, but there's no guarantee it's going to happen. So by having that
understanding, we're trading with a 70% chance of Yes, this may hold us lower, but you also you're taking 100% likelihood of taking a large portion of your
trade off. So let's say you took 80% off it This high from a low down here that you've went long on previous order block your trading inside the range here,
this is your high and this is your low, we know that 70% of the time, we're 70% odds that you are not going to see a higher breakout. That means take a larger
portion your trade off. So let's say we took 80% off on long down here, leave 20% on look at it does, you end up making more money on the 20% remaining in the
position than you did on your 80% taking it off from here to here. Okay, and you're keeping risk low, you're minimizing risk and maximizing profit potential.
Okay. Now we have another range here we have a low and a high to this high in this low bullish order block is right here, dips down into it 70% likelihood to
this range low will maintain and this range high will maintain. So when we do, you can be a buyer here and taking profits here. If that's the case, and we buy
rate that waterblock high as 343 pips made available, and taking out again 80% of the position right here leaving 20% on and look at it as it gives you a
little bit more of a pump in that position. Now we have another dealing range, we have this low and this high. Okay. Price comes down. And here is your bullish
order block right in here. This right here would have amounted to a loss. Okay, I want to give you opportunities where this would not work. Okay. I don't want
to sit here and look at a chart and cherry pick everything in hindsight and say look how great I am. Look how great the tools are. But this is one where if you
were trying to capitalize on this range phenomenon, it didn't work. But I'm gonna ask you a question. If you use your fibs in conjunction with this witness
be below the 79% retracement level. So with this swing, qualify up here it would but you didn't dip down in the order block far enough back here. Okay, so
forgive me, I can't remember if I went over this pattern here this this bearish order block here, but we have one price breaks back down below inside this
dealing range high here. And we violated this low here we have a new range low and this range high up here. But inside of this range, we have this high, this
high this high, this high this high, this high. For each one of these are potential dealing ranges the way we use it
and let's put them on a chart so you can see it.
I'll leave this one alone because that's a Sunday I'm sure. Okay, so we have and this low down here, which this user full horizontal for that. So we have this
range. And we have this range. And we have this range. And we have the old high back here and the low here prior to this rally up. Let's incorporate our fib
Okay, price retraces to well this this this level here absolutely means nothing to me. So I wouldn't I wouldn't look at this fib level as a means of interest I
like 62 from this high here we still don't have anything from this high here. We have nothing still. We have this high here. And suddenly we have a sweet spot.
Now what's nice about this one is we have old lows here actually we have a nice fractal low that was broken to the downside and we came back and retested it.
Okay, see how prices move back into this area here. See this low, lower low, higher low. Okay, so we have a fractal here. We broke through it, and then
retested it in here. Okay, back in this area over here. But now look behind price.
Hey, what do you see in this consolidation in here? Okay, what do you see? Where's the waterblock? At?
see it right there. So inside this range, we've rallied back up, I would not this is, and this is where we're getting at with this, I would not be willing to
assume new long positions, trading up against this bearish order block on a daily chart. And we're at the extreme of the range. Again, we're getting up to
these levels here. And we bar this level. Here's that swing high. So we're dealing range highs here, we're off the lows here, we got a 70% likelihood This
is going to maintain price. Okay, that's what statistics tell us. Price spends 75 of time inside of range. So as we get up into this level, look, what we're
doing, would you be willing to buy up here up against a bearish order block at the far extreme of a dealing range on a daily chart like this, okay, so inside
this range, okay, we have very little to go by in terms of statistical odds. In fact, it's statistically against us, okay, the odds are that this is not likely
to continue higher. Okay. And that's, that's the benefit of looking at where we are in a current range. Now, let's go back to this level over here. Okay, down
in here we have a bullish order block. Okay, very handsome. You can see how that was handled there. As price starts to break down. Notice how we got very, very,
very close to it, but never violated. Okay, so price stayed what inside the range. Price eventually comes down to that range, okay, breaks it a little bit.
But look at it as it trades deep back into the range again. Sweet low, it again works a couple times, and then eventually moves outside of the range. But look
how long it took to get outside of that range a very long time. Going back through all these levels, okay, we can see many instances were trading by
defining where we are in terms of the current trading range. You could trade counter swing trades, both directions, okay, like this level one here. Okay, you
have a bearish order block here you have a bearish order block here.
And I apologize if if this seems like a whole lot of just looking at a chart and grabbing the best positions. I promise you if you spend a week going through
every pair that you'd like to trade and go through and look at highs and lows, okay, old highs and lows and see where prices retraced and and all of the
retraces back to the highs and lows. Okay, you'll see that there are absolutely beautiful trading opportunities where over and over and over again. You could be
really finding a lot of times what many traders can't see on the chart. This low to this high really handsome opportunity. Again now once we get up here, what do
we do? We can look for a bearish scenario. If you're a harmonic trader, you look for bearish bats bearish butterflies, bearish gartley is up in here. There's
turtle soups, bearish, stochastics, bereits, MACD divergence, you know, head and shoulders formations, all those types of patterns in this area here, trade
looking for what the retracement back into the dealing range here and this is your bullish order block here. And we would look to take a exit point and maybe
even look for a bullish pattern to trade in here with the expectation of this high being retested. So it gives you a means of trading at the very, very
extreme of each range. Okay, so when you're looking at chart, you want to be looking at doing at least 90% of your trades at the far extreme of each range
that you're working within. Okay, yeah, the likelihood of trading in the middle of the range is much, much lower. If If you trade in the middle range versus the
string, outer range. Like up in here, you being a seller up here versus being a buyer. It goes without saying it's pretty obvious. Okay, the price is right this
far. Okay, just like we see here, price rallies and this far one direction, you're going to outer CUSP, okay? They're out a range of this trading range, the
likelihood of that continuing up is far, far less than the likelihood of going lower. Okay? So again, the question is, is where we're in the range. And where
is the path of least resistance in a, if you think like that, looking at the charts, defining the, the current trading range that we're working within and
understanding that mechanics are setting time and time price dates in a range, it does not mean 100% of time, it's going to be like that. But notice what we're
doing, we're looking for trades, back and forth, each direction, and not having to rely on a trend directional bias, like we talked about in the first two
volumes. And the reason why I'm including this is because I know some of you simply can't trust the moving averages, and you want to have something that has
a lot more action in your trading. If you start trading inside the range like this, you're gonna have more trades than you ever dreamed of. Okay, but you're
also going to have the likelihood of losing more times than you probably would if you just stayed on one side of the marketplace, like we discussed on volumes
one and two. So, to recap, when we look at price, we want to find out again, where are we at in the range? What dealing range highs and lows are we working
within, and the likelihood of that range? Staying intact is 70%. Okay, so that's pretty good statistical odds. If you add that equation with the order blocks and
you keep your profits very concise, very. You objective and onwards, this is an area where you would expect to see selling because we had selling all through
here. But more importantly, we have a very clear, bearish order block price wrap in that level and what happened true to form that drop down, look at this, it
goes right back into a previous bullish order block. Here is a perfect opportunity to take your profits, just doing a trade like that. Okay, just
simply doing something like that. here to here. It's 180 pips, would it be far too far for me to say that, realistically, there's a good 60 pips in that that
you could have taken out? Think about that. It's not getting every high and low. It's about getting portions of these moves, okay, and banking them and
compounding the growth of your equity over a period of time. And I promise you if you spend time looking at the charts and studying it, you'll see many many
more opportunities trading inside the range.