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Master Pattern

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380 views

Master Pattern

Uploaded by

lasercuttingbydaniel
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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MASTER PATTERN

CM wants to make a trade, but, he has a problem. The problem is liquidity. The liquidity is too small for
him to trade, so he will go through the phase of accumulation (contraction/consolidation) (1).

Then he will go through the manipulation phase (expansion) to take out the liquidity that's sitting on
top/bottom of the accumulation phase, depending whether CM wants the price to go down or up (stop
losses from longs/shorts) (in our example, CM wants to drop the price so he grabs the liquidity from the
stop-losses up) (2a).

After CM eats up that liquidity, he shoots the price up/down (in this example down). People start to
think it will go down and they go short, and put their stop losses below the accumulation phase. CM
then drops the price down, grabs the stop losses (2b), makes the price go back up to the center of the
contraction phase (3) to retest it, and then he uses that liquidity to aggresively sell or buy which will be
mark down/mark up phase (in this case, mark down) (4).

This happens in any instrument that's institutionalized, always.

Preferably, we want to get in the trade after we have a lot of certainty and confirmation and ride 60-70%
of the markup/markdown phase. We're not interested in trading the
accumulation/contraction/consolidation phase.
MP's are fractional. If we identifited that we're in the markdown phase in the 4h TF, there will be smaller
MP's in the markdown phase in 1h/15min/etc TF's.

So, once you've identified that the market is already in the markdown phase in the higher TF, you can go
down to the lower TF and trade the lower TF's MP's, since you know the bias in bigger TF.

All the master pattern is is a dumbed down version of Wyckoff.


The price will want to come back to the value area are retest it.

Real chart example (BTC all time high MP) (middle line – center of the contraction phase).

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