Draw the MASTER PATTERN CONCEPTS by hand
HOW TO MANUALLY DRAW THE MASTER PATTERN CONCEPTS
# STEP 1 - Identify the Contraction Phase
The contraction phase consists of a tightening of price where there is a simultaneous lower high and higher low, this is where the supply and demand equalize in the market. This is a leading indication that volatility is coming next.
You want to look for places where you find contraction/constriction of price, where it clearly looks like its moving into a defined consolidation zone.
STEP 2 - Identify the Expansion Phase
The expansion phase is the 2nd phase in the market, its known as the manipulation phase. It reveals incoming volatility entering into the market, this is where most retailers lose their money.
This phase can be defined as price breaking out of the contraction box, and whip sawing around the value line. This is the accumulation phase where the market makers accumulate their inventory from weaker hand holders.
Price usually whipsaws around the value line 4-7 times before the 3rd phase in the market starts, which is the trend phase.
STEP 3 - Identify Liquidity Lines
Liquidity lines are where the retailers place their stop losses, it is an excellent places to enter and exit the market.
These can be defined as HH or LL points on the chart where there are swing high and swing low points. By anticipating where these stop loss levels are located you can be aware where there are pools of resting liquidity. These are excellent places to enter or exit the market.
Understanding Contraction / Expansion and Liquidity are key price action concepts that help you understand trading from an institutional level and give you a deeper insight into the intentions of the market.
# STEP 1 - Identify the Contraction Phase
The contraction phase consists of a tightening of price where there is a simultaneous lower high and higher low, this is where the supply and demand equalize in the market. This is a leading indication that volatility is coming next.
You want to look for places where you find contraction/constriction of price, where it clearly looks like its moving into a defined consolidation zone.
STEP 2 - Identify the Expansion Phase
The expansion phase is the 2nd phase in the market, its known as the manipulation phase. It reveals incoming volatility entering into the market, this is where most retailers lose their money.
This phase can be defined as price breaking out of the contraction box, and whip sawing around the value line. This is the accumulation phase where the market makers accumulate their inventory from weaker hand holders.
Price usually whipsaws around the value line 4-7 times before the 3rd phase in the market starts, which is the trend phase.
STEP 3 - Identify Liquidity Lines
Liquidity lines are where the retailers place their stop losses, it is an excellent places to enter and exit the market.
These can be defined as HH or LL points on the chart where there are swing high and swing low points. By anticipating where these stop loss levels are located you can be aware where there are pools of resting liquidity. These are excellent places to enter or exit the market.
Understanding Contraction / Expansion and Liquidity are key price action concepts that help you understand trading from an institutional level and give you a deeper insight into the intentions of the market.
The Banks Code Trading Methodology - Master Pattern Concepts