Lecture Notes: Power of Three Market Makers Buy or Sell Model
Key Concepts
Power of Three: Accumulation, manipulation, and distribution stages in market trading.
Market Maker Buy/Sell Model: A model that incorporates various stages and elements such as power of three, standard deviations, and SMTs (Smart Money Techniques) for trading.
Standard Deviations: Used for anticipating phases and stages in trading models, not just for measuring targets.
Market Maker Buy/Sell Model Components
Power of Three:
Accumulation to manipulation to distribution.
SMT confirmations in transitions.
Standard Deviations:
Used to anticipate different trading stages.
Key deviations occur at zero, zero and a half, one and one half, two and two and a half, and three and a half to four.
SMT (Smart Money Techniques):
Used for confirmation in various stages.
Provides verification for changes in accumulation, manipulation, and distribution.
Standard Deviation Zones
0 and 1 Deviation: Smart money reversal area.
0.5 Deviation: Low-risk buy or sell zone.
1 and 1.5 Deviation: Accumulation or distribution level (Silver Bullet Zone).
2 and 2.5 Deviation: Retracement or reversal, and potential for redistribution or reaccumulation.
3.5 and 4 Deviation: Smart money reversal or turtle soup.
Dynamics of Market Movements
Smart Money Reversal: Occurs between 0 and 1 deviation, serves as a measure for the next market model phase.
Low-Risk Buy or Sell: Occurs at 0.5 deviation, gives an entry point for traders.
Accumulation or Distribution Level: Silver Bullet Zone at 1 and 1.5 deviations, where critical decisions are made.
Practical Implementation Example
Weekly Candle Analysis:
Observing market structures like weekly highs/lows for action points.
Leveraging SMT for confirming market direction.
Daily and Lower Time Frames:
Using 2 a.m. and 6 a.m. openings for market bias confirmation.
Identifying low-risk buy/sell and confirming with SMT.
Important Considerations
Higher Time Frame Premise: Essential for determining overall market bias.
Time Levels: Integrating time and price levels (e.g., weekly, monthly opens) for better decision-making.
Deeper Analysis Tools: Using standard deviations and SMTs to anticipate and verify market movements beyond surface-level analysis.
Conclusion
The Power of Three and Market Maker Buy/Sell models provide frameworks for understanding complex market dynamics.
Effective trading involves anticipating these stages and leveraging tools like SMTs and standard deviations to confirm and execute trades efficiently.