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Marketstructure

The true thinking process of the banks - Forex Master Pattern Hello there traders, in this article I have compressed information which will be useful for every trader. There is this trading methodology which very little know of (Even though its public information) that revolves around a market cycle which consist of an contraction, expansion, and trend. This article will just open the doors to your understanding of these principles, and will just go over the basics, to master it you must practice it a lot and identify many different zones in the markets. Practice Makes Perfect __________________________________________________________________________________________________________________________________________________________________ What will be gone over in this article? This article will explain what exactly are contraction phases, expansions, and trends and how to identify these different market phases. Get a basic understanding of what institutional traders look for and how they operate vs Retail. What exactly is the value line and how it acts like the "center of gravity". __________________________________________________________________________________________________________________________________________________________________ What is the Forex Master Pattern? The “Forex Master Pattern”, is a alternative type of Technical Analysis which shows the true psychological patterns of the Financial Markets. This pattern has 3 Phases, which is known as the Contraction, Expansion, and the Trend Phase, which will complete one market cycle in this term. This pattern also creates a concept known as the “value line,” which is the fair value zone or the neutral belief zone where buyers and sellers agree is the fair value. Consider it in terms of the center of gravity. This pattern is present on every timeframe and in every market with enough liquidity and volume, and shows the behavior, psychology and activity of retail, professional traders, institutional traders and investors and market makers. __________________________________________________________________________________________________________________________________________________________________ The Contraction Phase The contraction phase is the setup and it indicates a period that the market is in consolidation, with a tight and narrow range. During the contraction phase there is going to be low institutional volume and they are avoiding positions and trades. It is best to avoid trade entries in this phase and wait for a clear trend after the expansion. The Expansion Phase The expansion phase is the play and its when the institutional traders begin to accumulate positions. There are many things that institutional traders would do in this phase. If the institutional trader or "market maker", main goal is to buy the asset, they will drive the price lower with their money to draw in retail traders to place shorts and sell their positions which will generate liquidity for "smart money" to buy cheaper. and vice versa. If the institutional trader or "market maker", main goal is to sell then they will make the price go up a little with their own money to lure in traders who will buy their bags so that "smart money", can sell in a profit and overvalued. The Trend Phase The trend phase is the final phase that completes this market cycle. Once the institutional traders feel like it is time for them to start taking profits, will commence the distribution cycle which causes price to move down. All this profit taking from "smart money", will eventually lead retail traders to understanding that they were in the wrong side of the trade and the panic, liquidations, and stops start. Eventually they panic and start buying back in, and this generates liquidity for institutional investors and traders to take profits, leaving retail with overvalued bags, for the cycle to repeat itself again. For the short scenario it'll be a vice versa too, they will move price up with their own money, cause retail to believe the price is going up so that they get into wrong trades (Retail buys, Smart Money Shorts), they start accumulating short positions or selling their bag and with the trend drive price back to value or even below, and at this point retail again begin the panic, liquidations, and get stopped, and ultimately sell their bags to institutional traders who buy at a discount. This pattern is also similar to the accumulation and distribution cycle and are basically the same theories with different executions. __________________________________________________________________________________________________________________________________________________________________ What is the value line? Previously in this article I have explained how contraction zones create fair value lines. Value lines can be described as the average price and the neutral belief zone for price. It sorta acts like an center of gravity. Knowing the HTF value lines can be your key to success since you will understand the general direction of the market. Value lines help you visually understand what territory the market is in, like if its consolidating at value you should avoid entering any trade at all cost and wait for the expansion and perhaps the trend. These value lines and contractions can also be used to find certain broadening wedge ranges and the longer price stays in a proper broadening wedge the more volatile it will get. The broadening wedge starting from the origin of the contraction is rare to find but can create some pretty good scalping environments and conditions. Conclusion: Well I hope this was educational, and it gives you another way of understanding the markets. This article was pretty basic in understanding this pattern and methodology but hopefully now you have more awareness. The best way to start understanding these principles is to practice in the charts and learn to identify the three phases. This isn't a strategy but more like a theory or a concept which explains the behavior of the market. With proper understanding you can create many different strategies since this is extremely versatile and works on any market and timeframe if the liquidity is there. So go on the charts and try to identify the three phases and see how you can improve your trading game!.
Education
by Traders_Endeavors
2
2:1 RiskToReward: Gold Sell Off This trade idea is supported by multi-timeframe analysis, trend continuation and market structure. All key components of sound price action trading. Going into the trade setup, Gold is trading "flat" for the day (price is equal to the start of the day). However that doesn't tell the whole story, throughout the Asian session the market traded up and tested one of our levels highlighted from the market breakdown I posted last week (linked below). As the market ticked over into the London session, price broken below this marked red arrow line to signify both a break of support and also a break of the market structure on the small 1hr timeframe.
OANDA:XAUUSDShort
by JoelWarby
6
Bitcoin EnvironmentAmongst all the hesitation in the market right now, the environment on the larger scale ( M ) tells us a lot. It's easy to see that the retracements of most 'bear markets' had approached the 80% retracement level, which is no different from the current market we're in. There is currently a lot of fear surrounding the health of crypto at the moment, and I think it's important to keep an open mind, develop our own ideas and sentiments, and look at things from a broader perspective. Do not be so quick to jump on the bandwagon of what is being pushed at the moment.
INDEX:BTCUSD
by Clancy3gbh
2
Key to unlock the true market structure!!!Have you been struggling with marking market structure? You may have come across many Youtubers who aim to teach the market structure, but in a very wrong manner either by taking fibonacci tool or by discretion. This Video can be an eye opener for you all who are struggling in marking valid market structure. Market structure is the backbone for every other SMC concepts. Without market structure there will be no orderblocks, breakers etc. Even if you are a beginner in market structure, that is much better since you won't be acquiring the wrong knowledge in the 1st hand. So are you ready to uncover the real mechanical market structure? Video will be uploaded on YT at 6:30AM GMT on 25th November 2022 Subscribe our YT channel to never miss any content from Lamda Trading. Happy Trading!!! -Team Lamda
Education
by lamdatrading
1
AUD NZD - Approaching the next phaseG'day, Breakdown: 1. Note 2. Contents 3. Research breakdown 4. Education recap 5. Information on Lupa. A note before reading - this is a forecast analysis - based upon a long term trading strategy looking for Fresh Demand/Supply zones. This is tagged Long due to the overall monthly demand in control, until the opportunity of a rejection of the PCP has occurred or a long opportunity from a break and retest of the trend. Overall, where an imbalance is formed and sellers have completed the changing of hands due to purchasing further increments the exhaustive sellers. Until this criteria is met - no trade is taken until reactive, break or curve is confirmed. Monthly timeframe The monthly shows a strong test of the structure back in 2013 - where price has tested the September 2013 monthly candle 'close'. Since this structure high, price has had a strong sell off with a large engulfing sell. Review below for the breakdown from the Fresh nested supply towards the demand zone. Weekly Timeframe Four Day in conjunction with Fibonacci extension The four day has shown the similar zone which aligns nicely with the weekly. Note- here that price has provided a clear sell off which has broken through and on the daily provided a break and retest. This would be the moment for a secondary sell could be placed with a confirmation on the lower timeframe(s). Again structure provides a retest of the previous 'resistance' zone which aligns nicely with the End of August zone. Daily Chart Awaiting the reactive tap and then a further confirmation using the 8 hour or daily if preferred. Price maynot reach the desired Daily, three day cross imbalance zone. Upon a confirm - if price fails to provide engulfing moves - then expect a final push to complete the structure pattern within the arrival imbalance. From here, price will need to test the curve and break the high curve allowing long term trades to take place. Do you enjoy the setups? Professional analyst with 5+ years experience in the capital markets Focus on technical output not fundamentals Focus on investing for long term positional moves Provide updates where necessary - with new updated ideas tracking the progress. If you like the idea, please leave a like or comment. To all the followers, thank you for your continued support. Thanks, LVPA MMXXII
Long
by LupaCapital
GBP/JPY: Bullish setupGreat Britain Pound/Yen Japanese look bullish, what we can to get this opportunity to the upside direction, what I look that GBP/JPY still bullish form this point over $168.12 JPY. But if the price action still bullish in the next up confirmation ,we're very sure that GBP will continue strengthen. So, this it's the idea that I decide to trade after GBP/CAD and EUR/CAD rose up and I was shorting them. But I'm sure that GBP/JPY will going to strengthen. But whatever, I will check what I fell in those trades GBP/CAD and EUR/CAD later of those review and how I can to work this trade a little more. So, I enter in the midday that I'm in long from $168.51 JPY, and I update my Stop Loss now to $167.63 JPY and take profit toward $170.00 JPY. Good luck in this long position!!!
Long
by harisonhbn9718
1
Do not get exited about TSLA yet!TSLA was expected to trade today with low volume. Yet we saw higher volume than expected and a tug of war between buyers and sellers. Today sellers closed with a slight advantage closing near the mark of $170. Now it is up to the opening, If TSLA is able to open above $170. then a $175 retest with a possible targets of $177 and $180. Since it is a short week I am not sure what to expect yet we have data coming tomorrow and the FED speaks which can and will impact price. On the other side an open below $167 will encourage sellers and they will aim for targets at $165 and eventual $148-$150. There is quite a price imbalance between these two support and resistances.
NASDAQ:TSLALong
by JP_Tru
1
USDJPY I Short-term long opportunity Welcome back! Let me know your thoughts in the comments! **USDJPY - Listen to video! We recommend that you keep this pair on your watchlist and enter when the entry criteria of your strategy is met. Please support this idea with a LIKE and COMMENT if you find it useful and Click "Follow" on our profile if you'd like these trade ideas delivered straight to your email in the future. Thanks for your continued support! Brian & Kenya Horton, BK Forex Academy
Long
by BKTradingAcademy
12
GBP/CAD: New Update!!!In H4 timeframe it's appear very clear that the price doesn't have strengthen to continue bullish clearly in H4 timeframe. What right now, we see two thing to consider. First, we see a bearish rejection in this previous higher, and then we see a weakness in the price action, it's like that the price want to drop like a butter in the air. Right now, we see a bearish setup in this side as I comment for past days that GBP/CAD may to forming a possible drop, but now it's the time to sell and closed up manually long position and change to short now!!! I'm shorting from $1.5889 CAD. Stop Loss to $1.5975 CAD. And my fix target to $1.5710 CAD. We hope this drop now as my analysis was update now to short!!! Good luck. As I closed up manually the long in GBP/CAD. I got only a small profit like 0.67% earned in this long. But now I'm shorting GBP/CAD
Short
by harisonhbn9718
3