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TRADING MODEL
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System is based on market aggregation. The basics premise of the system lies on how
exchange engines aggregate orders in order to match them creating the subsequent price
action (PA). PA is therefore a function of the liquidity.

The process of aggregating orders in order to match them creates what we call efficient or
inefficient price action.

When an efficient price action is created, all orders are aggregated. When inefficient price
action is created, it leaves behind “gaps” which the market usually comes back to in order
to aggregate the remining orders.

Efficient Price Action:

Inefficient Price Action:

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2. Liquidity Gaps and Liquidity Gap Candles:

The way in which inefficient PA unfolds is by creating Liquidity Gaps (LGs) through Liquidity
Gap Candles (LGCs).

Liquidity Gap Candle (LGC)

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Liquidity gap (LG):

The “gap” left from the previous candle’s wick to the next candles wick.

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There are 3 levels considered “logical” or “significant” when talking about LGs and LGCs:
High, Low and EQ (Equilibrium)

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3. Market Direction and Ranges.

Markets move up or down. There is always a direction.

You can establish direction by observing where the highs and lows are being created AND,
most importantly, the direction in which LGCs are created.

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Except when in price discovery, price moves in ranges.

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Ranges help you gauge direction. They are defined by a specific high and a specific low.
Looking for the range in which the PA is happening is the first step in system.

4. Rebalancing:

As you can see. Even when in a clear uptrend or downtrend, there are movements we
could consider “countertrend”. While the direction still remains the same, those
countertrend moves are considered rebalancing.

Rebalancing occurs after an expansive move due to the market aggregation process
explained previously. PA develops towards previous LGs in order to “aggregate orders”,
gather liquidity and continue the expansive move.

Rebalancing is always done to previous LGs/LGCs and/or to previous highs or lows.

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Sweeps, raids and LGRs indicate either start of rebalance (i.e. end of
expansion) or end of rebalance (i.e.
start of expansion)
Sweep of a high/low:

Raid of a high/low:

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Liquidity Gap Reversal (LGR) :

An LGR is a candle that closes through a previous LG. LGRs are not used to establish
direction. LGRs in isolation “mean fuck all”. You should use them in the proper context to
analyze if there is going to be a rebalance or the end of one.

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GOAT LGR:

Same concept as the normal LGR but, the highs or lows are taken before creating the LGR.

GOAT LGRs have a high probability of signaling a rebalance or the end of one.

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Remember: LGRs in isolation don’t mean anything.

5. Other Concepts:

Ass Rape Candle (ARC):

A candle that takes the high and low at the same time. It gathers liquidity from both side
signaling a possible expansive move.

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All concepts seen here can be seen together e.g.

• An ARC can also be an LGC
• An LGR can also be a sweep
• An LGR can also be a Sweet and an ARC
• and so on…

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trading system is based on a clear set of rules:

1 - Directional Analysis: Find your range. Mark the levels we're reaching for
and the levels we're moving off. (Untested LGs)

2 - Sweeps, raids, and LGRs around these levels will either signal a rebalance or
possible continuation.

3 - Once we've got our direction (UP or DOWN), then we can drop to the 30m
and look for our triggers in that direction, as long as the 4H is still pointing in the
direction we want.

4 - When we get a trigger, analyse the chart and look at if the 30m is lining up
with the 4H, or if the 30m is looking like it needs a deeper rebalance towards the
next logical level.

5- Wait for 5 or 2 minute Market Structure Break (MSB) and set orders.

1. Directional Analysis
The first step of the trading system is finding the range we are trading at and establishing
direction. This will not only allow you to set where the targets are but most importantly,
what trades to take and which one not to. So, how do we establish a range and a direction?
The answer is Order Flow.

2.1 Order Flow

The market aggregation model creates imbalances or inefficiencies in PA. This inefficiency
can be seen on the charts through the creation of LGCs.

When price pushes through previous levels (previous LGs) it leaves these imbalances behind
due to spike in transactional volume.

The gaps left behind are ALWAYS retested, immediately or at a later time. When being
retested, these LGs can just be wicked through (failure to close) or closed through.

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To establish your range, analyze in which direction LGs are being closed through and LGCs
are being created.

Your range is the previous mayor swing high and swing low WITH the untested LGs in
between. This range will mark the levels the price is reaching AKA, your targets.

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When all LGs in a given range are closed through, your next target is the next swing
high/low.

In this system, we use the 4H chart to establish direction.

As you already know. After an expansive move, there is a rebalance. Rebalances usually
create a much more efficient PA, your goal is to position yourself in this rebalance to
profit from the next expansive move.

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When a candle closes through a swing high or low. You reassess an go external to the new,
broader range and it’s untested LGs

2.2 Change in order flow

One of the biggest questions is how to differentiate a rebalance from a change of direction
or change in order flow.

We spot the start of a rebalance with a sweep, raid or LGR. Typically, the gaps start to get
smaller and smaller before a rebalance occurs.

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When a rebalance closes through the Origin of Expansion (OE) and starts closing
through the gaps left in the previous expansion while creating new LGCs, we consider
there is a change in order flow and thus, direction has changed.

Origin of Expansion (OE):

The Origin of Expansion is the gap left from the first candle that formed a swing high/low.

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When all criteria is met, you can start changing direction and establishing a new range.

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3. Trading the system

Now that you have established your direction and range, you can start taking trades in that
same direction.

There are several ways to know when it’s time to start looking for entry triggers.

Close through an LG:

4h sweep of a high or low followed by LGR (end of rebalance):

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LGR in the direction of your bias (end of rebalance):

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These are NOT entry triggers, these are patterns you can use to dive into the 30 min chart
and look for trigger.

Take into account that rebalancing can and might go as far as retracing until the origin of
expansion.

If you want to be certain the rebalance is finished, wait for an LGR in the right direction for
confirmation.
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Also, a failure to close through an LG might signal an end of the rebalance.

3.1 Entry trigger

Entry triggers in the system are done at the 30 min timeframe. Once you have your direction
established clearly and spot the end of rebalance. You can dive into the 30 min chart en
look for your entries.

The entry trigger for the system is a 30 min sweep of a high or low at a significant level.

Significant level means at the high, low or EQ of an LG or LGC. Sweeps in the middle of
nowhere are not considered entry triggers.

30 min sweeps:

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It is important that the direction of the 4H and 30 min charts are aligned for you to be able
to take a trade. If the 30 min does not align with the 4H direction, wait for a further
rebalance while you still assess the 4H direction

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3.2 Entry Technique

Once you have your direction and your sweep. You can dive into the 2 or 5 minute chart.
What you are looking for is a Market Structure Break in your direction and a Return To Origin
Candle. (RTOC)

Once you have your MSB, look for the Origin Candle (OC). This is the candle that originated
the swing that broke market structure.

Yo can then set you entry at high, low or EQ of the OC and your SL a few ticks above it.

Tip: If you want to avoid “no fills” set the entry a few ticks above/below the strict entry.

Your next logical target is the next LG that hasn’t been closed through.
Although it is advised to take all or partial profits at 3R.

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THANK YOU

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