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Hello everyone, welcome back to the live stream. I see we just started the live stream a minute ago, and we already have 220 people connected, so thank you for spending your Friday with me, and I see many messages already coming into
Live stream on quartile market mapping and weekly cyclical dynamics, focusing on algorithmic market behavior and psychological price levels.
Key Takeaways
- Quartile levels (25%, 50%, 75%) are crucial for understanding market reactions in an algorithmic trading environment.
- Psychological price levels like round and half-round numbers are significant triggers for algorithmic market behavior.
- Market mapping should be tailored to the trader’s time frame and style for maximum effectiveness.
- Backtesting and using objective data are essential to validate trading strategies based on quartile theory.
- Automated tools exist for quartile mapping but may require customization for optimal visualization.
What the video covers
- Introduction to quartile mapping and weekly cyclical market dynamics, with emphasis on algorithmic trading influence.
- Explanation of quartile theory dividing market swings into four parts (25%, 50%, 75%) and their significance for price reactions.
- Discussion on psychological price levels such as round numbers and half-round levels as key algorithmic triggers.
- Comparison between quartile mapping and Fibonacci levels, clarifying differences and relevance in algorithmic markets.
- Presentation of automated software tools for quartile mapping and suggestions for customization.
- Importance of qualifying market swings based on trader type (scalper, intraday, long-term) for effective market mapping.
- Encouragement to backtest strategies using free platforms like TradingView to build statistical market edges.
- Reference to the book 'Quarters Theory' by Ilian Yatov as a resource for deeper understanding of quartile market dynamics.
- Live interaction with viewers, answering questions about volatility, trading indices, and educational content availability.
- Emphasis on continuous learning, research, and practical application to improve trading performance.
Chapters
- 00:00Introduction and Live Stream Start
- 04:14Discussion on Quarters Theory Book and Market Concepts
- 07:30Automated Quartile Mapping Software Overview
- 10:44Market Mapping Based on Price Action and Swing Qualification
- 14:14Psychological Price Levels and Algorithmic Market Behavior
- 17:27Live Q&A and Trading Strategy Insights
- 23:11Summary and Closing Remarks
Full Transcript — Download SRT & Markdown
Speaker A
the chat. As always, the chat is visible only to the organizers. I won't greet everyone individually because we are already at 50 messages. Good evening. So, for Q&A, I'll hear what you have to say and answer you at the
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end. Hello, regarding volatility mapping. In the meantime, Matteo, if I want to trade indices, you do it by hand, you do it by hand. You can still do it by hand, don't worry. It has a different evaluation metric, okay? But
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it still works there as well. Uh, the management lessons are missing. R. Yes, those will also be uploaded, guys, they are simply in a different database, so we have to go retrieve them. Great, great. I see questions from Riccardo
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too. I can't hear any audio. It's not that you can't hear the audio, Zacaria, I simply just turned it on because I was typing that we are starting in about 2 minutes. Uh, I'm waiting for more people to connect. We are almost
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at 300. Um, tonight we are going to talk about quartile mapping of the market and weekly cyclical dynamics. We have never covered weekly cyclical dynamics before. Quartile mapping, however, we have already covered, but we can go much deeper because it
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follows certain rules. For those interested in diving in a, uh, in a vertical way, there is a book called "Quarters Theory" by Ilian (I don't remember the last name: Yatov, something like that), which talks all about how the market can be divided
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through quartiles and how the market reacts. Since we are talking about an algorithmic market, we will also explain why this happens from the point of view of round numbers. Okay, I'll wait the last few minutes and then we'll start, guys. Fabio says: "Does
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that book cost €300 on Amazon?" Well, that's because it went out of print, so the price has gone up significantly.
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If I remember correctly, uh, the PDF is available online at a much lower price, at least as far as I remember, guys, I read it several years ago. Will it be put on YouTube? Absolutely, yes. Is the book in English? Yes, but the book goes
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deep into concepts that I will try to simplify for you as much as possible tonight, okay? I will bring you objective data. You can also go and verify by backtesting, because everything I'm bringing you tonight can be found for free on the platform
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TradingView. Um, so the book is called Luca says can you repeat it? It's this one here, it's called Quarters Theory and the author's name is Ilian, I don't remember the last name, maybe it's Ilian, maybe that's it. If you don't
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find the first one, try the second. Anyway, it's a very solid book. No, they aren't, they aren't Fibonacci, guys, okay? They are not Fibonacci.
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Fibonacci follows a different dynamic based on natural numbers which, in my opinion, has dubious validity within a market that is purely algorithmic and reacts to psychological levels. But obviously, I won't interfere because I know many traders who trade with
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Fibonacci, they are profitable, so to each their own. The important thing is that you build a statistical market edge. Which platform image? Guys, I'm sharing my screen. I'm asking you, Antonio, which one? Maybe you mean the profile one. So, that profile one is
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the Depth of Market from a crypto platform, okay? So it doesn't exist for Forex. Uh no, we aren't talking about prop firms in this video, guys, we're doing training. Okay, I'm always looking forward to the Friday event.
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Excellent Fabio, sorry, I've internalized the schematics theory well but I struggle a lot with backtesting.
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I did a live stream entirely dedicated to backtesting and great job Davide, I can't read that because it's a bit vulgar, but great. And I did a live stream dedicated to backtesting that really helps you put into practice the
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concepts you study both on your own and the concepts I've brought you. For example, I shared a strategy with you for free. Eh, you can ask questions here or in the other chat. Sure, I'll read them all. Are you recording it?
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The recording has already started, guys. Okay, the recording has started. Gradually, all the live streams will be uploaded to my channel. Very well, let's get started. I'd say we can start and I'll go right ahead and talk to you
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about two types of potential market mapping: one based on price action, therefore on the qualification of the range you are trading in, and this uses this tool which, I repeat, is called Fibonacci, but the numbers inside are not Fibonacci's, they are quartile
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numbers. These numbers, they also talk about them in the book, okay? Why? Because if the market moves 100 pips, okay? It will have reactions on the fractions of that swing, so 0.25, 0.50.
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Why does this happen? Because the market presence is 80% algorithmic, maybe even 90% nowadays, and algorithms are actually programmed to work around psychological levels, which are the ones everyone knows, such as the round numbers, for example 0.98, 0.97, 0.96, 0.95; but there are also many other
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important numbers, for instance the half-round levels, the .500, 0.96.500, which are extremely important for understanding this market. And then, instead, we are going to do a mapping that is completely based on quarters, and in this case, I will show you an
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automated one, okay? Because there is software that allows you to automate this mapping, which works well. In my opinion, you can apply it. The only thing it lacks, in my view, is flexibility regarding the colors you can use. I would make the round numbers
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darker because they have greater importance, and the half-round levels lighter. But they built this software this way, so, if someone knows their way around TradingView and wants to optimize this, they can certainly do so. Before I start explaining, I’d like
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to do a quick check in the chat—a "one" in the chat—if you can hear me well. I also want to see how much delay there is, if it's 10 seconds. Ah, okay, there is zero seconds of delay because
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the messages are already coming in. Great, so let’s get started, guys, let’s talk for a moment about swing qualification regarding price action, okay? So, mapping the market based on the range you are taking into consideration. You must consider the
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range based on the type of trader you are. If you are an intraday trader, it makes no sense for you to qualify the monthly swing. If you are a scalper, it makes no sense for you to qualify the
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weekly. If you are a long-term trader, guys, it makes no sense to perform intraday market mapping. So, what are we going to do in this case? Let's take this swing as an example, from the swing low to the reference swing high,
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which is the current market mapping. By the way, we are currently biased long for the daily, we have a structural breakout, and we are going to take it from the swing low to the swing high. I will show you the first methodology for
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mapping zones within the market. Swing low, swing high. As always, you know very well the effectiveness of the quartile numbers like the 75. And in this case, we are interested in dividing the macro-swing, which has a starting point, which is this, and an
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ending point, into four micro-parts, which are the 25, the 50, and the 75. These levels are precisely for the quartile theory. Wait, let me clear the tools in the background. Here it is, precisely because of the quartile theory, there will be a wide, uh, wide
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presence of algorithms within these levels. As you can see, the market respects and reacts to these levels continuously, okay? An acceptance or a rejection of these levels determines the potential arrival at the next price level. Okay? When this level is
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accepted, the next target is the following one. When this level is accepted, the next target is the following one. Okay? This is a market mapping that is done simply by qualifying the swing, and I usually use it for discreti
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strategies. When I have a structural breakout, I have an acceptance; those who follow me know very well what acceptance means. Okay? So, a structural break. I qualify the swing from swing low to swing high, and the market returns to a quartile level with
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a possible confluence of a demand zone. In this case, this exact point is where I have my statistical edge. Okay? This is the classic mapping, the one everyone knows. Okay? This mapping can actually be significantly optimized if you add the second market mapping that
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is based on the quarters theory. What does Ilian say? What does he explain? He explains that the market is mapped by four main price levels, which are the round numbers, the half-round numbers, okay? And the quarters; the quarters are 0.75 and 0.25. Earlier, we
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did it based only on the reference swing, so we calculated it by measuring the range from the swing low to the swing high. Okay? However, this can be done completely automatically. It is a bit annoying to do it by hand because
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it takes a fair amount of time. So you take the round number 0.94, the half-round number 0.95, the quarters.
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You understand that it becomes demanding, but there is software that I am now going to share with you for free so that you can start backtesting, which is called 50 Pips Round Numbers, and it plots them within the market.
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I'll also give you the name so you can add it. Give me a second, because sometimes it doesn't show it. It is created by David Brunet and the indicator is called Round Numbers Above and Below, okay? So, above and below.
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It is free, you can add it without any problems. And now I want to show you for a moment how the market feels these price levels. Okay? When it comes to moving into intermediate zones, as you can see, the market passes through very
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easily, but every time it breaks a zone , it returns to test the previous level as a sort of confirmation. And when we have major reversals, these reversals happen—start observing the numbers on your right, either on half-round levels
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, so in this case 89,500, or on round levels. The reference highs and lows of the swing we are currently qualifying are at 89,500 and 94,500. Now, what is the probability that a market reverses at two random levels? It is very low.
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And what is the probability regarding the subsequent reference swings, okay? So it stops, from here, a projection is made up to 92,500, it comes back and stops where? With an accumulation zone at 90,500, where does the projection stop? 93,500, then it comes back to
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test on the round level. Why doesn't the main reversal happen, for example, at 750? Why does the market return, accumulate, and distribute at these price levels? Because this is where the majority of the volume within the market resides. Okay? These numbers
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have been proven—you can even do a search called "volume in round numbers" which shows you, at an algorithmic level, how there is. It seems to me the chart was very similar to this one. It shows you the volumes at normal levels.
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Okay. Then the half-round level arrives , you see this, the round level arrives , and you see this. Okay? Half-round, round. Half-round, round. Now I don't remember the exact name on Google of how I searched for this chart, but I
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can tell you that if you look into it, you will see that most of the volumes in any market enter at these psychological levels, okay? For the reason I told you—that is, for the round and half-round numbers, which are
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psychological prices—this low set with an imbalance is also at 89. Now, these are two different methodologies, it's true, but they can be used in conjunction. I'll give you an example of when they can be used in conjunction . Let's take the case of a long market
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structure. I'm not interested in clarifying the timeframe because it can be applied to any timeframe. Okay, we have a structure break, therefore a bullish price action. And in this case, the qualification of the reference swing, so from a swing low to a swing
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high that gave me acceptance. I find my 75 at this level, therefore the reference discount price, I make it a bit darker green and I mark it down.
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Okay, besides this, I'm going to notice —now, this is a case study. Did it happen by chance that the 75 aligns with 82,500? The chart is giving me a hand tonight to give you some quite practical examples. What is being
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created for me? A cluster zone, therefore a round level cluster and a discount level cluster. If along with this I also have a nice demand zone that forms within this area and causes acceptance, you can clearly see that
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this whole price level becomes a high-reaction potential price level because I’ve added two theories that have been proven to work. The first, the law of supply and demand. The second, the law of swing qualification, which in this case we have also
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overlapped with the law of round numbers. Ok? In this case, Gio asks a question: do we draw the swing on the daily? Well, I showed you a practical example on the H4, okay? But this theory works on all timeframes.
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Obviously, if you drop down in timeframe, going to M5 or M15, you will start to see that levels like 0.75 and 0.25, which are the true quarters, also play a strong role. Why is it called quarters theory? Because within a round
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number, okay? So between 81 and 82, it qualifies the internal swing into four sub-zones. Ok? So, four sub-zones. The first level price encounters when moving from a round number is 0.25, then it hits 0.50, then 0.75, and then
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what does it have? The new round number . So, if you think about it, within this range, the swing is sub-classified into four zones. Ok, very good. Let's move on. Is everything clear so far, guys? Give me a one in the chat, then
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we'll continue. Excellent, excellent. I see 400 people connected. I am happy that you like it. Very good, very good.
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Let's move on. Let's move on. And in this case, without lingering too much, I want to show you on an asset that follows a much more consolidation-based dynamic, at least throughout May until August, then it took a directional
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phase. how the asset behaves with the same indicator. Ok? As you can see within these zones, even in consolidation, the few times that the price went outside the equilibrium levels, right? This is all consolidation inside. The few times the
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price managed to go outside, okay? Where did it stop? Always on round or half-round numbers. These are all clusters of round levels. Now it didn't plot it here because we went too far, but it's 71 and 500, okay? And it is
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visible to the naked eye. When the market forms a candlestick pattern at these levels, you can use any type of confluence to confirm your thesis, okay ? It creates a pattern that is statistically very advantageous, okay?
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So you have a high probability that a market reversal will start from here. The same thing happens in accumulation zones; in this case it didn't retrace, but the largest market reversal happened by chance from the 61 level.
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Okay. Daily chart that doesn't accept, accumulation schematic, price springs below, and we start a reversal. Okay, thanks Angelo, I really appreciate it.
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Can you repeat the name of the indicator? Absolutely, guys. So, uh, when you want to find the name of indicators you might find and want to save, just click on this code and you'll see it in the title; it's called
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Round Numbers Above and Below. And if there happen to be more than one and you want to make sure it's David Brunet's. Okay? Very well. Now I want to explain a theory that integrates perfectly with these concepts I’ve
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always given you for market mapping. This theory is the Wyckoff theory. Okay . Wyckoff said a great thing in his books, which is that not everyone studies the market; there are many people who study what others say, thinking they are studying the market.
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In reality, the only study, the only methodology for studying and researching the market is what the market has to say about itself; meaning not what Fabio says about the market, not what Michele, not what Alessandro, not what Emanuele has to say about the
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market, but what you, with your own concepts, are able to backtest and verify within the market. What does Wyckoff mean with this message? That no matter how powerful a strategy or a theory may be, from the perspective of
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the operator—the person actually executing the trades—if there isn't an active research component, such as evaluation, identification, and development of what they've learned, we never have an awareness of what we are applying. So, what I’m asking is: I am giving you free software that you
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can test, clearly with free live sessions, but it would be useful for you to improve by starting to backtest and seeing if these concepts can be integrated into your own strategy, which can be of various types. Okay?
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Let's move on. And here, instead, we talk about the difference between "dumb money" and "smart money" within the schematics. I am leading you through this whole discussion to eventually show you what happens in the weekly and daily cycle on a continuous basis
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within the market. Okay? In this case, we have the dynamics of accumulation zones in the market. You'll see that this isn't just an example and you might say, "Well, Wyckoff talks about theories from hundreds of years ago." You will realize that these theories
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are applicable and these patterns are present in the market every single day. Okay? No, Wyckoff didn't backtest on TradingView. Great Paolo Wyckoff. When he was testing, he explains in his book that he used sheets of paper, so he
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drew charts by hand. Think about what a huge job that was. We are at a great advantage from a study perspective.
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Obviously, he didn't face such an algorithmic market; instead, we are in a market that has become 80-90% electronic. SM is the acronym for Smart Money. Who can best define the term " smart money" for me? What does smart
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money mean? Not literally, which means intelligent money, but within the market. Okay? Anyway, yes, the literal translation, joy, is intelligent money, but what is meant within the market?
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Exactly, very well done. Marco summarized it perfectly. Marco summarized it perfectly. One could define them as institutional banks.
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Marco, however, used the correct words. Those who know the rules of the game. Those who know the rules of the game.
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But why do they know the rules of the game? Because they created them and because they move this market. Okay?
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With our little accounts of 5, 6, or 7 figures, we are crumbs and cannot move such a large market. We're talking about CFDs, or if we're talking about Forex, the most liquid market in the world, okay? And there are repetitive
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schematics that Wyckoff had identified that allow us to understand where smart money positioning occurs. Now, you could be nitpicky and say Wyckoff is too complicated, he uses terms that are too technical, he overcomplicates things, gives too many names to every
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swing, and I get confused; and I can tell you I agree. Wyckoff can be greatly simplified. His theories served to bring retail traders to a higher level of awareness, but today, the whole smart money trend has derived from Wyckoff's theories, okay? So it
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allowed us to arrive at advanced supply and demand, at a concept of schematics like Wyckoff Waves, at a concept of orders and evidence within the zone. So that whole trend of high market awareness was created, which doesn't use concepts that are inflationary,
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like "buy at the third touch," which makes no sense. Okay? Very well. In these phases, we must also clarify the difference between profit release and accumulation. Okay? Accumulation occurs 90%of the time by smart money during a period of pain for retail, therefore in
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a painful period. Thinking about this, does it bring anything to mind regarding market cycles? When the market crashes in any sector, what does the classic trader do? The classic trader gets scared and liquidates. But why do they get scared and liquidate?
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Because they lack awareness of the market edge, if they even have this market edge. The smart money trader already knows their entry point and their target, okay? So, regarding their directionality, they know that if they manage to position themselves down here
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on this spring that I am identifying with the arrow, rather than on this double bottom, they will only increase the risk-reward and position themselves at a discount on a move they expect anyway. So in reality, it is still an
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advantage if the market falls, whereas do you know the reasoning the retail makes? It broke my zone, I’m exiting the position. Why does this happen?
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Because retail has a very limited conception of stop-loss placement, okay ? So they place their stop-loss where the masses place it, they remove their operation from the market, therefore liquidating and pulling out where they think most traders are exiting. And now
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I’ll tell you something: where most traders exit is the exact point where smart money enters. This is the reason why Wyckoff opened everyone’s eyes to the operations of smart money. Let’s move on. These are all classic schematics. Remember how they are
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structured: accumulation channel, imbalance, departure; accumulation channel, imbalance, departure; accumulation channel, reversal, they unbalance below and go down. Markdown situation, accumulation, this is a short reaccumulation, imbalance, departure, accumulation, imbalance, departure. Let’s move on. Now I will explain something more in-depth. What
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happens from a smart money perspective? Here it shows you how a market sell-off —what Wyckoff called the selling climax, the maximum moment of fear within the markets—leads the asset to be underpriced. We can talk about any asset, and I can even give you an
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example with BTC, right? Have you noticed that most traders, when it was perhaps at 30,000 or 3,000, would say, "I'm not interested." Okay? It’s too risky. But when the rally started, okay , and it was at 50, 55, 60,000. Wow,
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BTC is really a great asset. Why is this? Because in human psychology we always think about confirmation bias, so if everyone is doing something, then I’ll do it too. If everyone is following this study path, then I will
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too. Which is a mindset that is totally wrong both in life and in the markets.
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The markets prove this to you, not with words but with numbers, because if we look at what happened, everyone who bought at the highs is currently in drawdown. Now, if we talk about BTC, we are talking about a store-of-value
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asset with high return potential, and in that case, it's a bit broader of a topic. Anyway, what happens is that we have a selling climax here. As soon as retail sees the recovery, what happens?
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This is a peak, okay? A peak, the market formed it for the bullish recovery, but I don't feel confident yet. A channel is created, you know what happens? Retail, one touch, two touches, three touches, they position themselves because there are three
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touches, so surely most traders will be in there supporting this price. And this is true, but you have to ask yourself, who makes money? Most traders , or the minority who are aware of what they are doing? In the markets, the
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minority who are aware of what they are doing are the ones who profit, and they are the ones who move the market and have the volume. Okay? Those who all position themselves at the same level because they see three touches and
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think "damn, it's a valid support, everyone is positioning here, I'll add my position too," are unfortunately those who end up losing money when the market makes another move. Okay? This move is the inducement. Most long traders are induced. Okay? I defined
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this movement as temporary profit because it's the moment when you see blue on your platform and think, " Perfect, it worked." Move to break even . All set, I'm not looking at the trade anymore; this is the reasoning of most
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traders. What happens instead is that the market goes to clear out this cluster zone because a sort of cluster is created, a huge cloud of sell orders , okay? And here are the various stop loss levels, so the less conservative
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retail, the average retail, the retail that takes on more risk, and the market wipes them out. Now, if the asset has a valid long-term value, okay, we expect a move; do you think the institutional investor, if they bought it at 30, gets
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scared to buy it at 27-26? No, they don't care because they are aware that this movement went on to cut out a lot of market operators. Okay? So what they do is position themselves even lower than fair value, therefore realizing a
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larger capital gain. What is the problem? It is that, unfortunately, this whole mass of traders, in the meantime, have been liquidated, okay?
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They have been liquidated within the market. Give me a one in the chat if you understood this concept, so I can take another 20 minutes to explain a visualization of how this happens in the market, and we'll look at it using
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assets we trade every day. I'll take an H1 time frame. These are the majors, I think you all know them, right? The classic pound, and I want to show you something from a perspective that is usually forgotten. When we talk about
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markets, we have two variables: we have a price variable and we have a time variable. Okay? We have a time variable , which is the most underestimated variable in the market, and the time variable is what allows the market to
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develop what is a cycle, a market cycle . Okay? Thanks to the market cycle, certain movements can be understood with ease. Here I have mapped out the whole pound to show you simply what has happened from the beginning of October
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practically until now. But with a different perspective, so without just taking supply/demand levels or swing qualification levels, but I want to point something out to you. Your eye will have immediately jumped to the round level, 1.35. However, what
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happens if we go and add...a mapping that gives us the daily bias, so it shows us how the daily candle closes, and we also need a divider that shows us when the week ends, so when we have the weekend, to understand how a
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trading week closes. And what you will see, coming back to us, is that the trading week, whether the bias is long or whether the bias is short, follows certain logics that are recurring. Now there is a guy, Fabio, who wrote to me
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he's short, caught from 1.35, so great. Anyway, we see that these schematics— channel imbalance channel imbalance channel, imbalance, mitigation, channel , imbalance, reversal—are schematics that are objectively recognizable that you go and see consistently every week, okay? Here we see an order cluster,
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here there is also a reference demand, so it's the perfect setup: a structural acceptance and an imbalance. Okay? This imbalance happens at the start of the week, okay? Only to then make the most important price excursion. Do you
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remember what I told you? I told you that most volume enters at round and half-round levels, and this majority of volume is easily highlighted because if we map this week, okay, from the reference low to the reference high,
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what do we realize? that the widest swings started from 1.35 and from the round 1.34. So these are not only imbalance patterns that we know in line with a mapping, but they also follow everything I explained earlier about
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market quartile mapping. Let's take another week; maybe it's a coincidence, maybe it only happens in certain cases.
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Can you tell me what price level this is, guys? It's 1.36. This is probably just another coincidence too, right? So let's take a moment to see what level the end of this cycle settles on. It settles on a half-round, which is
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1.33500. And even this mitigation here, as you can see, completes at 1.34500 to the pip. Okay? The start of the week happens with an imbalance, okay? And a directionality following the imbalance.
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If you go and look during the week at when the most impulsive movements happen, you will realize that all of this always happens after a swing.
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Always after a swing, okay? Sorry, always after a spring, not a swing, which is the dynamic Wyckoff explained and it's not applicable only to GBP/USD , it's applicable to any asset. Now, to this mapping, I want to add what I
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already showed you before, and here it starts to get interesting because we start to see that through this, we realize that the reversals are to the pip on the zones I told you about. Okay ? When a cluster like this forms, okay?
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So round levels, half-round levels, weekly liquidity imbalance also in favor of structure like this one, because we were in a short structure, the probabilities start to become really high. Let me show you and analyze this week for a moment to see
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what happens here. The week begins by creating a cluster, a double top, it begins by creating a cluster. We have two levels where most of the traders, who went to reverse this, are trapped in here. What happens above the
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reference high? Let's get back to us, okay? Reference high, channel. Pretend that this is a high, okay? In this case , it's a low, but pretend that this schematic is inverted to understand it to the downside as well. Reference high
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, channel. Reference high, channel, imbalance, which would be this movement , full directionality. Okay? More movement was made in one day after the imbalance than in the previous three days. Maybe this is a coincidence too.
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Let's go back. What does the market do? The week starts, it creates a channel, imbalances, and already makes the first directional move. It creates a new channel, imbalances. Also here on the round level, this time 1.38, a directional move that achieves
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structural acceptance. Let's go back, we are consecutively at four weeks following this logic. Balancing, directional move. Here too, they create a cluster, imbalance, another directional move within the market.
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Let's go here now, let's go back, let's go to October, let's see something else . What happens before the start of the rally? Market induction, okay? As we saw here, market induction, when we already have a set low, it's here,
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induction channel, they come back below , they fish these orders, okay? And the new rally starts. This is a situation that we see quite recurrently on assets throughout Forex, okay? And it's a schematic that doesn't take much account of the range, it takes more
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account of time on a weekly level. Here I'll explain how this one is set up. By the way, you can find it for free, it's called multi-frame charts, okay? In here, if you type multi-frame charts, this comes up, but it's not an
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indicator that makes you profitable, be careful, it's the reasoning that makes you that way, okay? It simply draws a day that closes negative in red and a daily that closes positive in green.
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This helps us with the cycle, but it has no potential at a forecasting level . Okay? This one instead is a simple software that tells us the weekend, so if you think about it from a technical point of view, we haven't done anything
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absurd. We have a chart where we subdivided the weekly schematics through software that tells us the daily closes and we went to highlight the levels with the highest probability of liquidity taking because we have double tops, double bottoms, triple
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tops, or triple bottoms. Okay, let's move on and let's take a look for a moment, this time I'll show you how it behaves in real time. I want to walk you through a line of reasoning. I'll clear everything for you, since I think
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the concept is clear enough by now. I'm going to remove this and I want to have you observe instead how daily openings behave. This simply marks the daily openings, okay? No, it's all set up, it's called multi-time frame charts,
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without complicating life too much. Okay, I'll show for a moment what the logic is regarding daily closes and openings. Okay, this is the daily opening at midnight, so we are like this. Okay. What is the market going to
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do? 80%of the time that it wants to have a directional day, therefore a large long candle, okay? It springs below. What time does it spring below?
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At 9:00 AM. But 9:00 AM is a random time, guys. Yes, they work in all markets, guys. These logics work in all markets; they are not limited to Forex.
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9:00 AM is the London open, guys— everything is always just random, right ? It's the London open, they unbalance, and here they take on directionality.
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Let's move forward a bit and see how the day closes. They go to mitigate that movement, they come back down, they’ve established their intraday directionality, they didn't go to create a lower low because they mitigated this move without creating
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one, and we have the opening of a new day in this case, okay? Market returning to a bullish bias. I'll show you the whole reasoning behind it for a moment with different daily openings.
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Okay? Why? Because the daily opening is usually the average of the prices. Okay ? So when the market wants to go long, it is very likely that it will spring below and then take on long directionality. Okay? These things
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happen not because, as many believe, the market moves solely due to manipulation. That is not the case.
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They happen because most operators are aware of how the masses act, and by leveraging their liquidation levels, they have a great edge, and this verifies a cascade effect. Okay?
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Because I myself also use these logics. Now, simply by taking a look at the chart, if we reason about what happened , they returned to a demand zone that had given rise to an unbalance. They took all these pending orders by
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mitigating a round level. Okay? It’s a schematic that, from a conceptual point of view, is not complicated at all. Okay? In this case, we have a daily opening that is right here. What can we expect? It's not a given. What
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can we expect? That if they want to return to the price average, okay? So this half-round level, since they are at the extreme, it’s likely that they will do this, meaning they will go to unbalance the reference high. Okay? By
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the way, I repeat, guys, I don't remember all the charts by heart. I am showing you these concepts because they are continuous in terms of weekly and daily schematics. Okay, let's move on.
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I don't want to drag this out too long since we've already been talking for 45 minutes. Let's clear everything and I'll show you something on different assets too. Let's go to NZD/CAD. Same market reasoning. Now I'll remove this.
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Instead, I'll show you the weeks from a timing point of view that behave with a double displacement. Okay? Another way the unbalance or spring was called in Wyckoff literature was displacement or shakeout. Shake, because if you think about it, what does an earthquake do?
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It makes the ground shake beneath your feet, it disrupts everything, and a spring is the same thing from a market perspective. Okay? When the trade goes against you, even if you don't have a stop loss, what happens? You get scared
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and you go and liquidate your position. The ground is pulled out from under you , okay? Because you think, "Damn, did I get it all wrong?" If you enter here, let's say, you have a structural break to the long side, this situation forms,
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right? And you enter here, confident. If the market does this to you, goes even two pips below, you say, "Damn, it broke the zone, now it's turning against me, I'm going into the red." Okay, so you liquidate, but millions of
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other people think like you, so what often happens? Everyone liquidates, the market does this, tests, and takes off, and that is how mitigation occurs. Okay ? In this case on NZD CAD, it was interesting to see that they opened the
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week, so after the weekend, liquidity was present above and liquidity below. So look at the perfect example, the induction channel. An induction is when they reach above a certain level, most traders trigger long, too bad. It comes back down. Okay, classic induction, it
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comes back down, everyone liquidates, scared. Okay? The market is at an important weekly low level, so in reality, those who were interested in buying will be even more encouraged, not scared. Okay? And here we have the greatest weekly directionality. This is
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always in terms of imbalance. Same here . I didn't mark these, guys, because I didn't have time to mark everything for you, but I'll show you now. The week closed with a lot of liquidity above the reference highs. Imbalance,
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mitigation. What are they doing here, guys? They are springing. New York open , high liquidity, directionality. But the directionality created by the spring is the most extended one, okay?
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Because pips on an NZD CAD pair are many, they are really a lot. Not to mention the latest market dynamic which , by the way, followed the same logic as gold and the same logic as silver, because what did we have here? Spring,
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directionality, okay? This classic clean high remained, where there will be a cluster of all the traders who went short. Okay? Very well. Before a new cycle starts, as we have seen, what happens? Directional induction. So this one in this case would be the high,
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okay? It would be this induction. Induction, I come back to pick you up below because I know your orders are here. Greetings to everyone. Ok, this is how most weekly cycles occur. Now there are different variations, okay?
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Even if we were talking about Covid currently, we can also talk about schematics that have a sort of midweek reversal, an inversion that usually happens on Thursday. So, before the end of the week, you have a directional market: you have an open, imbalance,
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then you have Tuesday, Wednesday, Thursday and, in the New York session, they return to consolidation. Why this schematic? Because if we think about the weekly candle, how is this schematic structured? Open, spring below, directionality above, and close.
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Okay? So this closes like this and this remains the week. It was a bullish week , but it was a week that wiped out all the resting orders down here and wiped out perhaps all the previous highs from
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last week. Ok. Then let's move on. I'll also show US because a guy asked me, " Fabio, do these concepts also work on UST?" Let's take a look for a moment.
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Always the same dynamic. Ok, what do we see? Weekly open, imbalance, induction. Very good, classic. Ok. Reference high, in this case it would be this, okay?
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Induction. Induction, they come back to pick you up above, but they don't need much, eh. A small movement is enough and if this logic is correct, from this zone here a very important directional movement should originate. That's how
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it was. Okay? Maybe it's this week, right? I mean, as always, maybe it's a coincidence, it's not a continuous thing. Previous week open, cluster, they unbalance. Ok, the directionality starts. We didn't see the reaccumulation, so once they have
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unbalanced and taken the directional phase, this can also be done within the cycle. So double top, imbalance, new directionality. What do you notice here ? Cluster, I don't know if you can see this double top, within a bearish cycle
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. Okay? What do they do? Everything happens within a round number. They balance even randomly, always pre-London, right? Between 8:00 and 9:00. These are dynamics that don't happen due to logic, but it's purely backtesting, no? It doesn't work and
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takes directionality. Also here, going back, the same logics even in the previous week. They set the previous week's high, they arrive here, split on the half-round, it reverses before doing, as I told you, it reverses on Thursday, liquidity, and they return
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and the following week you start over. Another round, another ride, but maybe the previous week isn't like that.
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Previous week's lows taken again, directionality. Okay, let's move on. I don't recall if I showed you XAG, which was very interesting from an educational standpoint because analyzing how the last bearish cycle developed was impressive, showing you this Wyckoff schematic, so setting the
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high, then setting the buying climax. Okay, here it is. What do we have? A channel inside. This internal channel forms and then we have a complete imbalance. Okay, imbalance. After this imbalance, the mitigation. After this imbalance, the mitigation. This also
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obviously happens by chance at the beginning of the week at the New York open, okay? on a perfect triple drive.
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Inside the market. From here, the market makes an acceptance, a change of structure, mitigation, and the bearish rally starts. Okay? If we look instead at the origin of the movement that caused this bullish rally, what was it?
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This movement here with a cluster at the beginning of the week taken. Okay. mitigated and from here the rally starts. If we go back further, the same thing. If we go back further, the same thing. Okay, guys, I hope I gave you
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Yes, it also works on M15. I hope I gave you some food for thought, but above all a slightly different perspective based on time and not just price, because the market also follows cyclical logic. these can be exploited
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to implement them within the market. You get all this material for free, the live sessions will remain free, and I only ask you, if you liked it, to leave feedback here. If you want, I'll also write it in the chat for the quality of
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the lesson. Let me write in here for a second. it should have reached you. Um, this lesson, I've already been sent the recording of the first part, the second part will also be edited, and then I intend to put everything on YouTube
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because I also have three recorded lives that I've already edited, so it's just a matter of uploading it to the market, to YouTube. Okay? Can I ask for the names of the indicators? Absolutely , I've already said it, but I'll repeat
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it for you. This one here is called Multi-Time Frame Chart. The one for round numbers is called Round Numbers Above and Below. This one here, instead , is called Weekend. Uh, if you just type "weekend," this exact indicator
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comes up as the first one, which gives you the weekend intervals. The only thing I ask of you, guys, is don't think the indicator does the reasoning for you. So, use these as food for thought to then go and create something
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of your own that can work and which, by the way, you obtained for free. Okay?
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Next week, instead of Friday, I'd like to bring you—since I know many of you weren't able to get your hands on it— the free risk management software, also directly for MetaTrader 4, so that you can optimize. I'll share the actual
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Mega folder with the software that I use myself for risk management and optimization. By the way, I'm also creating another one for trade management that automatically moves you to break even when the structure changes. And that's it guys, happy
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trading everyone. That's all for tonight and I'll see you next week. If you want to stay updated on the free live streams we do, join the group and I'll notify you every Friday about the live session. Bye guys and have a great
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evening.
Topics:quartile mappingalgorithmic tradingpsychological price levelsmarket swingsprice actionround numbersbacktestingTradingViewmarket dynamicsfinancial education
