Mitigations
The illustrations below demonstrate mitigation-to-mitigation price movement, which generates and maintains orderflow in the market until an objective is reached. In RIMC, continuation typically aims to overcome the structure established during the initiation phase.
Unmitigated Ranges
The charts below showcase more intricate RIMC deliveries. Remember, price movements aren't always clean and straightforward, so you must adapt to various patterns while adhering to the underlying narrative and intentions. Both images depict unmitigated ranges/OB's within broader sideways movements.
Sideways Delivery in Initiation Phase
The following charts illustrate a framework NJAT traders employ to navigate aggressive initiation deliveries. The core principle is that price cannot sustain vertical movement indefinitely.
Price must decelerate and accumulate more fuel (volume/orders) before the next initiation - envision it as a shelf supporting price while volume enters the market. During sideways movement, BFIs stack orders by liquidating internal structure and early traders. Within this contained delivery, we aim to exploit the 75/25 edges as shown below.
Identifying Reactive OBs
The chart below demonstrates the significance of ranges that break structure. Have you struggled to determine which range to focus on? Have you wondered, "Which OB will trigger a price reaction?". The key is to observe reactions at these areas, but you can identify higher probability locations based on the range's impact. As illustrated, there are several ranges lower in the A-B, but the highlighted one is the range that broke structure. This indicates substantial volume entered the market within this range as it surpassed a high that had previously broken a low. Study these locations yourself to gauge their importance, but remember, it's a game of probabilities - not every range preceding a BOS is guaranteed to elicit a price reaction.
Strong vs Weak Highs & Lows
Below, we explore the concept of Strong Highs and Lows versus Weak Highs and Lows. A Strong H/L is structure created by a rapid directional change, suggesting a large volume of orders entered at that point, causing an aggressive turn. When price revisits these areas, we're likely to observe a significant reaction from the H/L. These are prime locations to identify as POIs at edges.
Momentum Principles
The chart below underscores the importance of the Law of Effort. When price moves with intention, it's evident through speed and aggression. Price establishes an A-B during this phase, and as it begins to retrace, it's crucial to note the retracement's momentum. Is the pullback slower than the initiation? Does price exhibit less momentum compared to the initiation? If so, there's a higher probability that price will resume in the same direction as the initiation once a key location has been mitigated.
Location Strategy
Sideways ranges can perplex many traders, but not NJAT Traders. Our traders utilize a framework for navigating sideways ranges to pinpoint optimal trade execution points. We ensure we're Selling High and Buying Low - a fundamental principle often overlooked by others. This approach allows us to position ourselves on the right side of probabilities, leading to more frequent success. Remember, sideways ranges aren't solely about focusing on the edges.
The FU Candle
FUs followed by Intention are strong indicators of BFI footprint in the market. This combination signals heavy buying or selling to dramatically reverse price direction. Excellent trading opportunities often arise after an FU followed by initiations. In the green-boxed continuation delivery, you can see multiple prospects for a 1:10 continuation on the M30 timeframe. Even if price doesn't push through to capture the swing high, trades can be managed according to the current market phase, which in this case is a large sideways range.
Initiation Phase
This type of price delivery can challenge many traders. It's often rapid, demands intense focus, and requires exceptional skill to execute at the right moment and location. At NJAT, we've developed specific frameworks and concepts to help you construct a narrative and understand how to identify the current market phase.
