Balanced Price Ranges and Liquidity in Trading

Bounces off one more, goes to a lower low than that low, so we have this low.

Then it retraces all the way back up into the propulsion block, and then finally gives up the ghost and breaks lower and leaves the range defined by that low and that high.

So what makes this a balanced price range?

We trade down, up, down, up. So we have worked all of this price action in here, back and forth.

It's offered efficient delivery higher and lower.

And then once it leaves it on that candle, once it leaves it, it becomes a balanced price range.

So it- it's not a matter of just go up, down, and leave.

It's got to go up, down, back and forth, delivering up, buy side, delivering down, sell side, all of this back and forth price action.

It's a clear and obvious trading range, so it's balanced.

It's going to take a very significant price run to get above this high and above this high.

So watching the new opening gap on August 22nd during that live stream, you'll hear me say, you know, if it, if it wants to continuously power through, then the next thing would be here.

But I tell you very specifically, I am not interested in going long because of the factors over here and what I've outlined on the daily chart.

So this is a balanced price range. Balanced price ranges are very difficult to get through.

Buy side or stops above this high here would be called high resistance liquidity, meaning that it's going to take a lot of movement, something very significant, in this case, manual intervention, where the algorithm is overridden by a manual intervention.

So they reprice aggressively there because they just want to mess with everything that's in the marketplace, and that can sometimes happen.

Just look at FOMC, just look at non-farm payroll, look at CPI, PPI, those types of events.

You always want to trade after those news drivers because you don't know what they're going to do at the time of delivery at those high impact or medium impact news drivers.

So whenever you have a balanced price range, you want to extend that throughout the day.

I did not have that on the chart, but I have these levels on a notepad.

So I'm watching it, and you can see how quickly there, the chart gets very, very busy.

You, while you're learning it, it may be beneficial for you to have this on your chart, which is what I'm teaching my son to do. Okay?

So just know that we're looking for these things to have an effect on our perspective on price action, seeing what price may do around them.

Not that you should expect to know what to do with them right now, Caleb.

What you're doing is, is you're, you're collecting information so that way you'll start having a journal of price action.

You can go back and look, and the things you're going to learn by going forward with me teaching you, you'll be able to go back and see that these setups were there too.

But it's not important for you to see them right now.

But you do have to have the mechanics of seeing what price action looks like, what is balanced, what's inefficient.

Inefficient is this run here. Okay? So it leaves it energetically below that low.

That is displacement. It's leaving aggressively.

So if it comes back up to the low of this area here, up into this candlestick here, that means we have what?

We have a return back to a balanced price range, and it should have really hard, uh, a difficult time, if you will, to get through it, to get to this PD rep.

So this is kind of like guarded by the algorithm. It's not likely to see it trade to it.

But if it does, it's indicative of, okay, then there's something else at play.

There's manual intervention. I won't chase it going long.

I'll just cut the, the interest in the day and be done.

All right. So with that information, we're going to drag it out to the 9:30 opening bell, which is right here on that candle.

And that shaded area here is the top of that level right here.

That's the high and the low, that shaded area.

That is that balanced price range on the one-minute chart.

Again, if you're just looking at this lecture here and looking at how it's annotated and not watching that live stream, it's going to be completely alien to you.

You will not be able to pick up the subtle nuances that's being shown here.

It'll go right over your head. So it's a combination of watching this and going back and watching that live stream again, Caleb, from Friday, August 23rd, 2024. It's not that long.

It's like an hour and 15 minutes or so. It's not that big of a deal.

So we have the opening bell, first tick here.

That is the beginning of the opening range.

Opening range goes to 10 o'clock. That's essentially right here.

And it started going higher.

If you notice, this is your very first fair value gap.