Lecture Notes: Equilibrium in Trading - Day 2

Introduction

• Continuation from the previous session; focus on the concept of equilibrium in trading.
• Equilibrium is a retracement tool used to measure premium and discount market zones.
• Useful for identifying where smart money enters the market.

Equilibrium Concept

• Definition: Measures from the low to high to find the 50% mark.
• Premium Zone: Above the 50% mark.
• Discount Zone: Below the 50% mark.
• Smart money typically buys and sells in the discount zone.

Application

• Uptrend:
  • Measure from low to high.
  • Look for price to enter the discount zone for entry opportunities.
• Downtrend:
  • Measure from high to low.
  • Look for price to enter the premium zone for shorting opportunities.

Tools and Settings

• Gan Box and Fibonacci tools can be used to measure equilibrium.
• Recommended settings: Price levels at 0, 0.5, and 1.

Chart Analysis

• Steps:
  1. Identify the structure (breaker structure).
  2. Measure the range using equilibrium.
  3. Look for price actions like fair value gaps, order blocks around equilibrium.
  4. Target previous areas of liquidity.

Practical Examples

• Multiple Time Frames: Works on any time frame, from daily to 15-minute charts.
• Case Studies:
  • Illustrated examples of equilibrium plays using various assets like gold.
  • Showed how to look for breaks of structure and potential entries.

Advanced Concepts

• Integrating other tools and signals like order blocks and fair value gaps.
• Recognizing patterns on multiple time frames.

Future Learning

• Upcoming Topics:
  • Developing a trading plan.
  • Integrating knowledge into practical trading strategies.
  • Exploring Forex strategies, session opens, stop losses, and take profits.
• Additional Resources:
  • Future videos to provide text and visual explanations of concepts.

Conclusion

• Equilibrium is a foundational concept that, when combined with other tools, provides robust trading opportunities.
• Emphasis on practice and spotting these patterns regularly for proficiency.

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Note

• No need for an Equilibrium Part 3; next focus will be on integrating all learned concepts into a cohesive trading plan.