Lecture Notes: Understanding the Box Setup in Trading
Introduction
- Video focuses on the box setup as an entry model
- Can also be used for understanding market biases
- Recommended to watch Alex's video for additional insight
Key Concepts
- Box Setup
- Consists of accumulation, manipulation, and distribution phases
- Involves: consolidation, aggressive move out, aggressive move back in, distribution
- Important to mark consolidation range and extend horizontal lines
Steps to Identify Box Setup
- Mark the Consolidation Range
- Identify the range of consolidation
- Extend horizontal lines from this range
- Look for Aggressive Moves
- Out of the range and back into it
- Identify balanced price range (BPR) within these moves
- Retest for Long/Short Entry
- After aggressive moves, look for a retest of the consolidation area
Trading Strategies
- Running Sell Side Liquidity
- Use to initiate a higher move
- Running Buy Side Liquidity
- Use to initiate a lower move
- Broadening formations also fit within this model
Example Analysis
- Lower Time Frames
- Faster occurrences; preference for lower time frames for quicker plays
- Key Focus
- Not on consolidation but on aggressive moves (fair value gaps)
- Retest of range aligns with ICT setup
Practical Tips
- Avoid getting caught in trades due to wrong timing on buy/sell side of curve
- Seeking Liquidity
- More likely to reach previous lows than reverse unexpectedly
Bias and Higher Time Frames
- Use 4-hour or 1-hour charts to determine bias
- Focus on:
- Displacement
- Lack of displacement
- VPR (Volume Price Range)
- Determine bullish bias via displacement back into range
User Discretion
- Use bodies vs. wicks based on situation
- Retests of fair value gaps or BPR crucial for entry decisions
Conclusion
- Encouragement to experiment and provide feedback
- Open to new video suggestions
These notes capture the essential aspects of the box setup trading strategy, providing a structured approach to identifying and utilizing the model for market predictions.