Welcome back folks. This is lesson four for short-term trading, blending IPTA data ranges and PD arrays for liquidity runs. Okay, when we're looking at IPTA data ranges, we're referring to specifically time and PD arrays are dealing specifically with price. So blending the two elements together, you're blending time and price theoretically. If the data ranges provide you a context to look back the last 20 days, the last 40 days, and the last 60 days, as you move forward, you're casting forward for a new set of 20, 40, and 60. Each new day, you shift that range forward.
To look back. back period gives you the context of frame the PD arrays with a reference point in time. The interbank price delivery algorithm will reach back in to data arrays between the last 20 days, the last 40 days, and the last 60 days. Which data array they use or refer to is respective to the PD array in reference to price. If price is in a premium market, obviously working with the market price up, we would be looking for a bearish mitigation block, a bearish breaker, liquidity void, a fair value gap, a bearish order block, a rejection block, an old high or an old low.
From the market price and below, For a discount market, we would be looking for a bullish mitigation block, a bullish breaker, liquidity void, fair value gap, bullish order block, rejection block, old low or old high. Moving from the market price up in the order that's listed in the premium data arrays, that's the order in which the algorithm will seek those respective prices. reference points.
They're not in any different order. This is the order or the hierarchy in the way that they're set up. There is not always a void or gap or mitigation block. It may just simply need to go all the way up to a bearish order block or a rejection block.
And the same thing is said in opposite terms for when the market's in a discount. It's not ambiguous when we look at price. in the form of the PD array matrix. A good practice is always to simply go through your price charts and just look for where price is right now at the market price and above you, okay, looking back last 20 days and 40 days and 60 days, which PD arrays in the form of a premium market exist. Again, not all of these bearish or premium.
arrays will exist in your price. There may be a selection of three or four or maybe as little as two. Rarely will you have all of them to choose from.
So what you're doing is you're looking back over the last 20 days and you're looking to see above us in terms of the market price, what would be deemed as a premium market, the last 20 days, which PD array exists in price action. Looking back 20 days, which discount PD array exists below us? There may be a PD array above and or below us that's already been used by price action. For instance, there may be a bullish order block the price is already traded down into and responded and reacted accordingly and had higher prices. That PD array has now been exhausted so you'd have to look for another discount PDR.
When we refer to time and price what we're doing is we're blending both the components just like the algorithm does. The algorithm has to go back a specific number of time. So what we do is we break it into 20 trading days which is essentially one month, 40 trading days which is essentially two months. and 60 trading days which is essentially 3 trading months.
By combining both time and price, we get the closest thing we can arrive at in terms of what the algorithm will seek to do in terms of trading to the next level liquidity. When the markets are bearish, we work from a premium market down to a discount. Based on whatever premium PD array, discount PD array.
exist in your current market action, when it's bearish, those premium PD arrays will be your resistance points or where sell signals or sell-offs will occur or new sell setups. The objective for price to reach down into will be the discount PD arrays that exist in your price action. We don't force the ideal of any of these PD arrays.
they're either in the chart or they're not. If there's an absence of any one of them, it doesn't negate or increase or lessen the validity of an ideal setup. It just means that you have far less to choose from in terms of targets or setups. All right, let's take a look at an example.
We're going to use the Australian dollar. This is the daily chart. and the first thing you want to do is you want to break your market up in reference to time so now we have the look back of 20 trading days 40 trading days and 60 trading days we can go back all the way to the 60 trading days and you can see that the lowest point with the old low and the highest high formed in the last 20 trading days that is our total 60 day trading range splitting that market in half in reference to its old high and its old low we can see where the premium and discount market ranges exist if this old low is violated we would have to go back and look at the old low formed in the 60-day look back period.
The arrow delineating the lowest low in the last 20 trading days. If that is violated and traded below, we would go back not to the 40 trading days because there's no lower low. The next lower low or discount PDArray exists in the 60-day look back and those levels are noted respectively.
The last 40 trading days, you can see the range is defined by the highest high and the lowest low in the last 20 trading days. So when we look at the last 20 trading days, what we do is we think in terms of the PD array matrix. Now what I've done here is I've overlaid the actual matrix.
Now you don't need to have this much information or try to have this in your price action, but I'm giving you a graphic depiction on how I internalize and I interpret price action. So if we see where price is right now at Friday's close of the week of this recording, market price is defined as Friday's close, and we would be looking at the highest high and the lowest low in the last 20 trading days. That's our first look back period of 20 trading days.
We start looking for bearish mitigation blocks in the premium range, a bearish breaker, liquidity void, fair value gap, bearish order block, rejection blocks, and or on old, high or old low. The low market price, we identify any bullish mitigation blocks, a bullish breaker, liquidity void, a fair value gap, bullish order block. rejection block or an old low and or high.
With that in mind, what I've noted is in the last 20 trading days, these are the respective premium and discount PD arrays in the last 20 trading days. Working our way from the top down, we have an old high, a rejection block. a bearish order block mean threshold That's the three up candles, the ranges of their bodies, highest high and lowest low in terms of the bodies, not the wicks.
That's the mean threshold or midway point. Then we have the bearish order block, and then we trade down into the discount area, and we see a bullish order block, bullish order block's mean threshold, the rejection block, and then finally the old low. If we move down into a 4 hour chart, you can see how these PDA Rays give you much more detail.
You can start to see how price moves from one PDA Ray to the next. The market for the Australian dollar made a higher high on Tuesday. Failed to make a higher high and trade higher into a monthly range as I had expected in my analysis.
You're going to learn that having these understandings of short-term trading, it's not required for you to know all the time exactly where the market's going to go. If you fail in your analysis, it'll give you an immediate reason to maybe reverse your analysis and take the trades in the opposite direction. This was the case this week in our mentorship.
Originally, I was long or bullish on the Australian dollar. with the expectation of a larger price move. It failed to do so on Tuesday. Once Tuesday broke down, as you'll see in the later slides in this presentation, we have a lot more analysis to suggest the price was going to trade down and close the liquidity void. Now again, this is a four-hour chart, so if we saw price fail on Tuesday and break down lower during Tuesday, we start looking for bearish ideas inside of the premium range.
So we look for all the premium PD arrays to start keying off all potential sell scenarios. When we sell short on the daily PD arrays in the premium range, we will be looking for a lesser time frame to target our exit. That would be in the form of a four hour or one hour chart.
4-hour here shows a clear liquidity void as outlined here. Price also trades back up into a mitigation and breaker, trades up to an institutional price level 76.80 and while we're not necessarily needing the actual high of the week, we can still take participation in the market move because we understand that the shift in order flow has now been moved to bearish so we'll be looking for discount pd arrays below market action at 7680 we were in the premium range the void closes and takes us into the discount range notice that in the shaded green area if we further refine this into the days of the week on a four-hour chart. You can see how this clearly came down and closed in the liquidity void right to the PIP. If we add our market maker manipulation template forming the high of the week on Tuesday, trading at an old monthly, weekly and or daily high liquidity pool, that's what we saw. on Tuesday.
It traded slightly above Monday's high, rejected it. Once Tuesday broke down, the likelihood that we would see lower prices was in effect why I said we could start looking for shorts at 76.80 with the objective of 76.05 as our downside objective. That was framed, as we see on our market maker manipulation template, the discount market PD array. is going to be used on a time frame lesser than the premium liquidity pool that was used. So the daily high on Monday was violated on Tuesday.
That's a liquidity pool rate on a daily high. If that's the context, we're going to drop down to a 4 hour and or a 1 hour chart to look for a discount PD array. It comes in the form of a liquidity void. taking us down into 7605 was our objective.
everything tied together, we get a combination of elements of time and price blending and using the market maker manipulation templates in accordance to our market profiles that we used and learned in lesson two. We get a symmetry in the marketplace that would otherwise probably escape everyone else. So hopefully with this example and understanding, and using an example we used in live analysis this week while we were initially wrong and our expectation of a higher breakout on aussie dollar that failure swing on tuesday gave us insight on how we can change gears and get short on aussie dollar even while it traded in sympathy with the weaker dollar which isn't typical blending the two time and price it gives us the ability to work within the same parameters that the algorithm will at the interbank level hopefully this has been insightful to you we'll build more on these ideas as we go through and trade with more insights using the iptl data ranges and pd array matrix