Market Maker Model: 5 Steps Trading Plan and Contextual Entry Methods
Key insights
Trade Entry Points and Risk Management
- 🎯 Identifying potential entry points and targets based on fair value gaps and market structure shifts.
- 📊 Emphasis on understanding order flow and context for making trading decisions and risk management strategies including taking profit at 1 to 2 and leaving 20% running towards the next target.
- 🎓 Promotion of a mentorship program and upcoming boot camp for those interested in improving their trading skills.
Patience, Timing, and Trade Execution
- ⌛ Importance of patience in recognizing high probability conditions and the significance of timing in executing trades, considering factors like news events and time windows.
- ⏳ Utilization of different timeframes for context and execution, such as one-hour and one-minute timeframes.
Market Conditions and Trade Entry Points
- 📉 Observation of the transition of order flow from bullish to bearish price action, identification of resistance levels, and assessment of probabilities and risks in trading based on entry patterns and liquidity.
- 🔍 Importance of reviewing the information multiple times to fully understand the market maker model and trading plan.
- 📊 Understanding context areas such as previous day low candle, monthly swing low, and weekly fair value gap, for potential market movements.
Diverse Entry Methods and Market Conditions
- 🎚️ Different entry methods such as overlapping defense, FV Gap, and Silver Bullet, with the choice depending on risk management, time management, and personal preferences.
- ⚖️ Advice to target a 1 to 2 within the context for balancing return and win rate.
- 💹 The Silver Bullet entry relies on price action and order flow rather than a specific time of day.
Market Maker Sell Model Strategies
- 📊 Time frame alignment and context are essential for identifying high probability trade entries.
- 💰 In a market maker sell model, trading the sell side curve can lead to high probability condition moves, while trying to trade the buy side curve is lower probability.
- 🎯 Emphasis on using fair value gaps and premium arrays for entry points and the importance of risk management.
Fair Value Gaps and Context in Trading
- 📈 Using higher time frame fair value gaps as the strongest reference for trading decisions.
- 🔄 Understanding the move from premium array to discount array to create context in trading.
- 🕰️ Aligning time frames to determine entry points for trades based on the bias and narrative.
Market Maker Model Trading Plan
- ⚖️ The market maker model trading plan consists of five steps: bias, narrative, context, entry, and risk management.
- 📉 Bias determines the direction and liquidity, with a bearish bias for Australian dollar US dollar targeting previous week and swing lows.
- 📚 Narrative focuses on how the bias will be fulfilled, considering premium or discount arrays for price movement.
Q&A
How are potential entry points, targets, and risk management strategies addressed in the video?
The video addresses potential trade entry points, targets, and risk management strategies based on fair value gaps and market structure shifts. It also highlights understanding order flow and context in making trading decisions, along with discussing risk management strategies, such as taking profit at 1 to 2, leaving 20% running towards the next target, and adjusting entries based on context.
What is highlighted regarding the importance of timing and patience in trading?
The video stresses the significance of understanding context, including daily and weekly gaps, to determine potential market movements. It also emphasizes the importance of patience in making successful trades and explores the significance of timing in executing trades based on factors like news events and time windows.
What aspects of order flow and market conditions are emphasized in the video?
The video emphasizes identifying the transition of order flow, recognizing key resistance and fair value gaps, and understanding the probabilities of trading specific price actions. It underscores the importance of reviewing the information multiple times to fully grasp the market maker model and trading plan.
What entry methods are discussed, and how should they be approached?
The video covers different entry methods like overlapping defense, FV Gap, and Silver Bullet. The choice of entry method depends on risk management, time management, and personal preferences. Targeting a 1 to 2 within the context is advised for balancing return and win rate. The Silver Bullet entry relies on price action and order flow rather than a specific time of day.
What are the key elements of the market maker sell model for entry and risk management?
The market maker sell model emphasizes using fair value gaps and premium arrays for entry points, with a strong focus on the importance of risk management. Having a clear, emotion-free trading plan and understanding entry options before trading are crucial elements.
Why is the sell side curve important in the market maker model?
In the market maker sell model, the sell side curve represents the move with higher liquidity and involvement from institutions and major financial banks. Trading the sell side curve can lead to high probability condition moves, while attempting to trade the buy side curve is generally lower probability.
How does fair value gaps and context play a role in trading?
Fair value gaps and context are used to understand market movements and effective trade entry. Higher time frame fair value gaps are considered a strong reference for trading decisions. Context is created by understanding the move from premium array to discount array, and time frames are aligned to determine entry points based on bias and narrative.
What is the bias and narrative in the market maker model trading plan?
The bias sets the trade direction and liquidity. In the case of the Australian dollar US dollar, the bias is bearish, targeting previous week and swing lows. The narrative focuses on how the bias will be fulfilled and considers premium or discount arrays for price movement.
What are the key components of the market maker model trading plan?
The market maker model trading plan consists of five essential steps: bias, narrative, context, entry, and risk management. Each step plays a crucial role in determining trade direction, liquidity, narrative fulfillment, entry points, and risk mitigation.
- 00:00 We're learning a market maker model trading plan with five steps: bias, narrative, context, entry, and risk management. The bias determines the direction and liquidity. For Australian dollar US dollar, the bias is bearish, targeting previous week and swing lows. The narrative focuses on how the bias will be fulfilled, considering premium or discount arrays.
- 06:59 The video discusses the use of fair value gaps and context in trading. It explains how to use higher time frame fair value gaps and align time frames to enter trades effectively.
- 13:32 Understanding time frame alignment and context within a market maker sell model is crucial for identifying high probability trade entries. The sell side curve is the key focus within the model, as it represents the move with higher liquidity and involvement from institutions and big financial banks. Following the sell side curve can lead to high probability condition moves, while trying to trade the buy side curve is lower probability.
- 20:15 Market maker sell model emphasizes using fair value gaps and premium arrays for entry points, with a focus on risk management. Emotion-free trading plan and understanding of entry options are crucial.
- 26:55 The speaker discusses different methods of entry in trading, covering the concepts of overlapping defense, FV Gap, and Silver Bullet. The choice of entry method depends on risk management, time management, and personal preferences. Targeting a 1 to 2 within the context is the advised approach for balancing return and win rate. The Silver Bullet entry relies on price action and order flow rather than a specific time of day.
- 33:35 The video is about identifying the transition of order flow in market maker models, recognizing key resistance and fair value gaps, and understanding the probabilities of trading certain price actions. It also emphasizes the importance of multiple reviews to fully grasp the information presented.
- 40:15 The video segment discusses identifying entry points for trading based on specific market conditions. It emphasizes the importance of understanding context, including daily and weekly gaps, to determine potential market movements. Patience is highlighted as a crucial factor in making successful trades, and the significance of timing in executing trades is explored.
- 46:34 The speaker discusses potential trade entry points, targets, and risk management strategies based on fair value gaps and market structure shifts. They emphasize the importance of understanding order flow and context in making trading decisions.