Overview
This lecture covers advanced trading concepts focusing on Points of Interest (POI), order blocks, fair value gaps (FBG), liquidity, and entry models in market structure analysis.
Price of Interest (POI) & Key Concepts
- POI refers to specific price levels attracting trading activity due to order blocks, liquidity, or FBG.
- Price trends can be identified by moves, pullbacks, and corrections; a downtrend consists of repeated lower moves and pullbacks.
- A pullback or retracement is a temporary reversal against the prevailing trend.
Order Flow & Order Blocks
- Order flow tracks the movement and filling of buy/sell orders in the market.
- Order blocks are zones where large institutions place their orders, often causing price reversals or continuations.
- Valid order blocks often coincide with high trading volume and market structure breaks.
Fair Value Gap (FBG) & Liquidity
- FBG is a price imbalance or gap between two candles, often filled by price retracement.
- Liquidity refers to areas where stop-losses accumulate (liquidity pools), often targeted by big players.
- Liquidity hunts trigger stop-losses, causing sharp price moves.
Entry Models & Market Structure Shifts (MSS)
- Entry models are based on identifying valid POI, order blocks, FBG, and liquidity.
- MSS (Market Structure Shift) signals a change in trend direction, used for confirmation before entry.
- Inducement (induction) refers to price movements designed to attract traders before the real move.
Multi-Time Frame Analysis
- Trade entries are refined by analyzing POI, order blocks, and FBG across higher (e.g., 4H) and lower (e.g., 1M) time frames.
- Lower time frames are used for precise entries after identifying setups in higher time frames.
Advanced Concepts & Scenarios
- Engineering liquidity involves creating false liquidity zones to trap traders.
- Extreme order blocks and engineering liquidity have high reversal probabilities (up to 80%).
- Multiple entry models (e.g., IDM, sweep, breaker block) are used based on market context.
Key Terms & Definitions
- POI (Point of Interest) — Critical price level for potential entries/exits.
- Order Block (OB) — Zone marking institutional buy/sell orders.
- Fair Value Gap (FBG) — Price gap signaling imbalance, usually filled later.
- Liquidity Pool — Cluster of stop-losses and pending orders, targeted for market moves.
- MSS (Market Structure Shift) — Change in trend direction, often used for entry confirmation.
- Inducement/Induction — False move to trap retail traders before true price direction.
Action Items / Next Steps
- Review the lecture recording and your notes on POI, order block, FBG, and liquidity identification.
- Practice identifying POIs, order blocks, and liquidity pools on multiple time frames.
- Prepare questions for the next class covering advanced and scenario-based trading entries.