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Introduction
Dear Reader,
Welcome to this exclusive eBook, where we invite you to embark on
a journey toward a deeper understanding of Algorithmic Price
Delivery. This guide is crafted for those eager to elevate their
trading skills and gain insight into the intricate mechanisms that
operate within financial markets every day.
As emphasized by The Inner Circle Trader (ICT), Michael J.
Huddleston, understanding Market Maker Models (MMXM) is
essential for any serious trader. Ignorance of these models can
hinder your grasp of market dynamics and ultimately your trading
success.
This advanced PDF aims to significantly enhance your understanding
of Algorithmic Price Delivery. By the end of this book, you will not
only grasp the concepts discussed.
So, buckle up, grab your notepads, and prepare to unlock the
potential of your trading journey!
Phases of Market Maker Models (MMXM)
1. Accumulation
Definition: This is the initial phase where market makers
quietly accumulate positions, often at lower prices.
Purpose: Market makers create a sense of stability or a
perceived trend to attract retail traders, leading them to
believe that the market is moving in a specific direction.
Strategy: By generating false price movements, they entice
retail traders to enter positions, often against the market
maker's own intentions.
2. Distribution
Definition: Following accumulation, this phase occurs when
market makers begin to sell off their accumulated assets at
higher prices.
Objective: Market makers capitalize on the increased
demand and higher prices generated during the accumulation
phase.
Mechanics: As retail traders buy into the perceived upward
trend, market makers offload their positions, profiting from
the price increase.
Insights and Implications
Understanding Phases: Recognizing these phases helps
traders anticipate market movements and avoid being misled
by apparent trends.
Strategic Positioning: By understanding how market makers
operate, traders can make more informed decisions and align
their strategies with the underlying market dynamics.
Next Steps
Deep Dive: Moving forward, we will explore each phase of
the MMXM in detail, equipping you with knowledge to enhance
your trading skills and understanding of market behaviour.
Market Maker Sell Model (MMSM)
The Market Maker Sell Model (MMSM) provides a
framework for understanding price movements in financial
markets through its distinct buyside and sellside
components.
Structure of the MMSM
Buyside: The buyside of the curve draws higher, targeting
buyside liquidity above previous highs. This upward movement
is often driven by market makers to attract buyers and
accumulate positions.
Sellside: In contrast, the sellside of the curve draws lower,
seeking sellside liquidity positioned beneath old lows. This
downward pull is engineered to trigger stop-loss orders from
long positions, creating opportunities for market makers.
Phases of the MMSM
1. Initial Consolidation: The MMSM begins with a consolidation
phase where relatively equal lows are formed. Retail traders
often interpret these equal lows as strong support, leading
them to place stop-loss orders just below.
2. Psychology of Retail Traders: When the market fails to
break lower, retail traders view this as a bullish sign. Their
stop-loss orders become sellside liquidity that market makers
can exploit.
3. Market Expansion and Retracements: The market then
expands upwards, often experiencing 1-3 retracements on
the left side of the curve. Each upward leg attracts more
buying interest, further accumulating positions.
4. Transition from Buy to Sell Program: Eventually, the market
reaches a critical level where it shifts from a buy program
to a sell program. This transition occurs because the buyers,
who have profited during the upward movement, now have
their stop-loss orders positioned below the recent lows.
5. Smart Money Reversal: As the market changes from buying
to selling, the sellside liquidity—comprised of the triggered
stop-losses—becomes the target. This marks the Smart
Money Reversal, where the market begins to roll over.
6. Sellside Dynamics: Once the market shifts, it will typically
see 1-3 expansions followed by retracements, all leading
towards the original consolidation low. The ultimate goal is to
reach and trade below this consolidation, completing the
MMSM.
Conclusion
Understanding the MMSM helps traders recognize key
market dynamics and anticipate potential price movements.
By being aware of the buy and sell phases and the
psychology behind retail trading behaviour, you can position
yourself more effectively within the market. Next, we'll
explore the best entry patterns that can emerge from this
model.
Market Maker Buy Model (MMBM) Notes
1. Concept Overview
Opposite of MMSM: Focuses on market maker behaviour and
buyside liquidity.
Objective: Understand how market makers manipulate price
action to create liquidity.
2. Market Structure
Initial Phase:
Consolidation: Price stabilizes before significant movement.
Equal Highs: Formation of relatively equal highs misleads retail
traders into thinking a strong resistance level is present.
3. Sell Program Dynamics
Price Drop: Sudden decline confirms resistance for retail
traders, prompting short positions.
Stop Loss Placement: Retail traders place stop losses above equal
highs, creating engineered buyside liquidity.
4. Transition to Buy Program
Key Level Reached: At the right moment, the market transitions
from sell to buy.
Sellers' Profit: Sellers have profited during the downtrend,
leading to the shift in market dynamics.
Liquidity Seeking: The market targets buyside liquidity above the
old highs.
5. Structure of MMBM
Sellside Curve:
1-3 Expansions: Characterized by downward movements
followed by retracements.
Buyside Curve:
Expansions and Retracements: Similar structure as sellside;
marked by upward movements and pullbacks.
Fractal Nature: The left side (sellside) influences how the right
side (buyside) unfolds.
6. Model Completion
Final Indicator: The MMBM is complete when price trades above
the original consolidation level, signalling a successful shift to a
buy program.
7. Key Principles
Liquidity Engineering: Understanding how liquidity is built and
sought by market makers.
Market Phases: Recognizing the phases of sell and buy programs
helps in anticipating price movements.
Fractal Patterns: Insights from past price behavior are crucial
for predicting future movements.
This structured format should help you grasp the essential
elements of the MMBM more effectively!
Smart Money Reversal (SMR) Notes
1. Concept Overview
Definition: The SMR occurs at key price levels during specific
time windows, indicating potential reversals driven by smart
money.
Importance: Recognizing these reversals helps traders align with
market movements.
2. Time and Price Alignment
Key Principle: Significant market movements happen when there’s
alignment between time and price, often referred to as “Time
and Price alignment.”
Focus Areas:
Key Price Levels: Identifying Time Based Liquidity Pools and
Higher Timeframe PD Arrays (e.g., HTF Imbalances).
3. Time Based Liquidity Pools
Understanding: These pools are linked to specific times when
liquidity is expected to be present.
Application of Time Cycles:
Killzones: Specific time frames during which liquidity pools can
be anticipated.
Asia Session: Generally ignored for liquidity.
London Session: Focus on Asia’s High and Low.
New York Morning: Consider both London and Asia’s High
and Low.
New York Afternoon: Focus on Morning’s High and Low.
4. Fractal Time Cycles
Concept: Time cycles can be broken down into smaller cycles,
providing opportunities for more granular analysis.
5. Liquidity Purging
Mechanism: When price crosses the High or Low of a previous
time cycle that opposes the current narrative, look for
confirmations (signatures) indicating potential liquidity purging.
Objective: Draw towards the opposing liquidity pool.
6. Bearish Example
Scenario: During the New York session, anticipating lower prices.
Observation: Price trades above the London High.
Action: Look for confirmation signatures indicating a potential
SMR.
Target: Anticipate the London Low as the Draw On Liquidity.
7. Bullish Example
Scenario: During the London session, anticipating higher prices.
Observation: Price trades below the Asia Low.
Action: Look for confirmation signatures indicating a potential
SMR.
Target: Anticipate the Asia High as the Draw On Liquidity.
Key Takeaways
The SMR is a critical concept for identifying potential market
reversals based on time and price.
Understanding the timing of liquidity pools helps traders align
their strategies with market movements.
Using killzones effectively can enhance trading decisions by
providing context for potential liquidity events.
These notes capture the essence of the SMR and its practical
applications in trading!
Higher Timeframe Imbalances
Notes
1. Concept Overview
Fair Value Gaps: Form when the market expands in one direction,
creating areas where price has not yet retraced.
Purpose: The market typically seeks to retrace into these gaps
before continuing in the anticipated direction.
2. Bearish Institutional Order Flow
Mechanism:
Expansion Lower: The market retraces into a Bearish Fair
Value Gap.
Lower Timeframe Model: This setup represents a Lower
Timeframe Market Maker Sell Model.
Connection to Liquidity:
Fractal Time Based Liquidity Pool: The low of the Bearish Fair
Value Gap often aligns with these liquidity pools, enhancing the
validity of the retracement.
3. Bullish Institutional Order Flow
Mechanism:
Expansion Higher: The market expands upward and leaves a
Fair Value Gap.
Retracement: The market seeks to retrace into this Fair Value
Gap before resuming the upward movement.
Lower Timeframe Model: This scenario represents a Lower
Timeframe Market Maker Buy Model.
4. Confirmation of Retracement Ending
Intermarket Relationships:
Importance: Pay attention to relationships between different
markets (e.g., correlations) to confirm that the retracement
has ended and that the market is likely to expand in the
anticipated direction.
Key Takeaways
Understanding Gaps: Recognizing Fair Value Gaps is crucial for
anticipating price retracements and expansions.
Order Flow Analysis: Differentiating between bearish and bullish
order flows helps in identifying potential trading opportunities.
Confirmation Techniques: Using intermarket relationships adds
another layer of validation to trading decisions based on
retracements and expansions.
These notes summarize the critical aspects of Higher
Timeframe Imbalances and their practical implications in
trading!
Intermarket Relationship Notes
1. Definition
Intermarket Relationship: Analyzing the behavior of correlated
or inversely correlated markets to identify deviations from
expected patterns.
2. Correlated Markets
Examples:
Highly Correlated: Markets like $NQ (Nasdaq) and $ES (S&P
500), or $EU (Euro) and $GU (GBP/USD) should typically move
together.
Expected Behavior: They should form swing highs and swing
lows simultaneously.
Cracks in Correlation:
Example 1: If $NQ makes a lower low while $ES makes a
higher low, this indicates a crack in correlation.
Example 2: If $EU creates a higher high while $GU makes a
lower high, that’s another sign of a crack.
3. Inversely Correlated Markets
Examples:
Inversely Correlated: $DXY (US Dollar Index) and $EU should
typically move in opposite directions.
Expected Behavior: If $DXY makes higher highs, $EU should
create lower lows.
Cracks in Correlation:
Example: If $DXY creates a higher high while $EU makes a
higher low, this indicates a crack in correlation.
4. Significance of Cracks in Correlation
SMT (Smart Money Technique): A crack in correlation is
referred to as SMT.
Contextual Importance: Not every crack in correlation is
significant; only those that align with the overall Narrative and
Points of Interest (POI) are meaningful.
5. Framework for Analysis
Overall Framework: Utilize these insights to identify key
Algorithmic Signatures.
Next Steps: Understanding these relationships lays the
groundwork for recognizing entry patterns within the trading
framework.
Key Takeaways
Monitor Correlations: Keep a close watch on correlated and
inversely correlated markets for potential trading signals.
Identify Significance: Focus on cracks in correlation that
resonate with your trading narrative and key market levels.
Framework Application: Use intermarket analysis to enhance
trading strategies and identify entry points.
Entry Patterns Notes
1. Introduction to Entry Patterns
Focus: This section discusses entry patterns corresponding to
each phase of the Market Maker Model (MMM).
High Probability Model: The goal is to present the highest
probability entry model for ICT traders.
2. Low Risk Buy (LRB) and Low Risk Sell (LRS)
Definition:
Low Risk Buy: The first entry within a Market Maker Buy
Model (MMBM).
Low Risk Sell: The first entry within a Market Maker Sell
Model (MMSM).
Confirmation:
Both entries are typically confirmed by the first Market
Structure Shift (MSS) or a Change in the State of Delivery
(CISD).
Note: Not every LRB/LRS will have an MSS, but for
simplicity, focus on those that do.
3. Understanding MSS and CISD
Purpose: MSS or CISD indicates a switch between market
programs (e.g., from buy to sell or vice versa).
4. Examples of Entry Patterns
Low Risk Buy Example:
Scenario: A chart shows an institutional swing point (breaker)
forming within a Higher Timeframe (HTF) Price Delivery Array
(e.g., 1H BISI).
Confirmation: A CISD/MSS confirms the shift from a sell
program to a buy program.
Entry Point: The entry is made inside the breaker block.
Low Risk Sell Example:
Scenario: A chart on the 4H timeframe shows NQ forming a
high and then displacing through an intermediate-term low.
Confirmation: This displacement confirms the transition into a
sell program. A retracement occurs into the breaker block,
with evidence of Smart Money Technique (SMT) with
correlated assets (e.g., ES).
Entry Point: The entry is made inside the breaker block.
Key Takeaways
Entry Types: Understand the distinction between Low Risk Buys
and Low Risk Sells as foundational entries in the Market Maker
Models.
Confirmation Signals: Pay attention to MSS and CISD as
indicators of market program shifts.
Practical Application: Use real market examples to identify and
execute these entry patterns effectively.
1st Stage Accumulation/Distribution
Notes
1. Introduction to 1st Stage Accumulation/Distribution
Context: This phase represents the second entry in the Market
Maker Model (MMXM), indicating the 1st stage of Accumulation
in a Market Maker Buy Model (MMBM) and the 1st stage of
Distribution in a Market Maker Sell Model (MMSM).
2. Characteristics of This Phase
Formation: Involves the second formation of an intermediate-
term high or low within its respective Market Maker Model.
Location:
Often occurs inside an inefficiency on the left or right side of
the curve.
May also form within a mitigation block (an old order block on
the left side of the curve).
3. MMXM Tip
Mirroring Principle: The right side of the curve often mirrors the
left side; where old selling occurred, new buying will take place,
and vice versa.
4. Examples
Accumulation Example:
Chart Analysis: On a 5-minute chart of NQ, observe the
formation of a Low Risk Buy.
Price Action: Price trades above an old area of selling
(highlighted in a grey box) and utilizes this area, along with
the Breaker Block (BISI), to hold support.
Key Insight: This behavior exemplifies the concept of old
selling becoming new buying, crucial for understanding MMXM.
Distribution Example:
Chart Analysis: On a 1-minute MMSM chart, the 1st stage of
Distribution forms inside a Breaker Block, with an Inefficiency
Fair Value Gap (IFVG) annotated in red.
Engineering Insight: Note how the Breaker Block was
engineered to initiate a Low Risk Sell stop hunt and was
subsequently used for entry in the 1st stage of Distribution.
Key Takeaways
Understanding Phases: Recognize the significance of the 1st
stage of Accumulation and Distribution as integral components of
the Market Maker Model.
Price Behavior: Pay attention to how previous selling and buying
areas influence current price action and support/resistance
levels.
Chart Analysis: Utilize real market examples to solidify
understanding of these concepts in practice.
2nd Stage Accumulation / Distribution
(Silver Bullet) Notes
1. Introduction to the Silver Bullet
Definition: The Silver Bullet refers to the 2nd stage of
Accumulation/Distribution within the Market Maker Model
(MMXM).
Characteristics: Known for its rapid delivery towards the draw
on liquidity.
2. Variability of Stages
Stage Flexibility: Not every MMXM will contain two stages; some
may have one, others may have three.
Uniqueness: Each Market Maker Model is unique, similar to
snowflakes.
3. Understanding the Silver Bullet
Timing: The Silver Bullet phase is significant because price is
typically very close to the draw on liquidity when it appears.
Magnetic Analogy:
Draw on Liquidity: Think of it as a magnet.
Price: Analogous to a piece of magnetic metal (iron or nickel).
Dynamic: As price gets closer to the draw on liquidity, urgency
increases, causing price to accelerate towards the target.
4. Identifying the Silver Bullet
Stop Hunt Preceding Silver Bullet: A stop hunt often occurs just
before the Silver Bullet phase.
Phase Context: The phase in which the stop hunt occurs (e.g.,
LRB/LRS or ACC/DIS) helps indicate when the Silver Bullet is
likely to form.
5. Examples of the Silver Bullet
Low Risk Buy Phase Example:
Context: When a stop hunt or Smart Money Technique (SMT)
occurs during the Low Risk Buy phase, the second
Intermediate-Term Low (ITL) formed after this will represent
the Silver Bullet.
1st Stage of Distribution Example:
Context: A stop hunt occurring during the 1st stage of
Distribution indicates that the next Intermediate-Term High
(ITH) formed will be the Silver Bullet.
Key Takeaways
High Probability Phase: The Silver Bullet is one of the most
reliable entry points in the Market Maker Model due to its
proximity to the draw on liquidity.
Awareness of Market Phases: Understanding the sequence of
events (stop hunts and their phases) is crucial for identifying
potential Silver Bullets.
Chart Application: Use the insights gained to analyze charts and
identify Silver Bullet opportunities effectively.
The Best Entry Pattern: The True Unicorn
1. Introduction to the True Unicorn
Definition: The True Unicorn is an algorithmic signature
representing institutional sponsorship, observable across all
fractal timeframes.
Significance: Recognized as the most powerful entry signal when
aligned with higher timeframe order flow.
2. Characteristics
Beyond Breaker Block and FVG: While influenced by concepts
from ICT, the True Unicorn incorporates additional elements for
enhanced effectiveness.
Balanced Price Range: The True Unicorn setup includes a
balanced price range within the Breaker Block and Fair Value Gap
(FVG).
3. Examples and Application
Chart Analysis: The pattern can be found frequently across
various charts; traders are encouraged to backtest and explore
its prevalence.
History: This setup has been successfully utilized for over two
years by The Ones That Know community.
Macros in Market Maker Models
1. Introduction to Macros
Focus: This section discusses the use of macro times within
Market Maker Models, specifically the time of interest (TOI).
2. Time of Interest (TOI)
Definition: The 30-minute period every hour (XX:45 - XX:15)
serves two primary functions:
Reversal: Indicates a potential change in market direction.
Expansion: Indicates continuation in the same direction.
3. Reversals
Context: A reversal occurs at the Smart Money Reversal (SMR)
point, marking a change in the state of delivery.
Anticipation: If a reversal is not confirmed ahead of a TOI,
expect the upcoming TOI to produce a reversal.
Example: Market Maker Buy Model:
Between 12:45 PM and 1:15 PM (TOI), a Smart Money
Reversal occurs, confirming the right side of the curve.
Example: Market Maker Sell Model:
Between 9:45 AM and 10:15 AM (TOI), a Smart Money
Reversal occurs, confirming the right side of the curve.
4. Expansions
Context: If a reversal is confirmed prior to a TOI, the next
TOI is expected to deliver an expansion.
Example: Market Maker Buy Model:
If the Smart Money Reversal occurs outside of a TOI, the
subsequent TOI is anticipated to show expansion on the
right side of the curve.
Example: Market Maker Sell Model:
If the Smart Money Reversal occurs outside of a TOI, the
next TOI is expected to reflect expansion on the right side
of the curve.
Key Takeaways
True Unicorn Pattern: Recognized as the most powerful entry
setup, integrating key elements that signify institutional activity.
Macro Timing: Understanding TOIs is crucial for anticipating
market behavior, with specific focus on reversals and expansions
to inform trading decisions.
Important Macros
London Session
Time of Interest (TOI):
2:45 AM - 3:15 AM
3:45 AM - 4:15 AM
New York AM Session
Time of Interest (TOI):
9:45 AM - 10:15 AM
10:45 AM - 11:15 AM
New York PM Session
Note: Specific TOIs not provided; traders should identify similar
periods of interest.
How to Trade Using Macros
Trading Rules
1. SMR within TOI:
If a Smart Money Reversal (SMR) occurs within a TOI, you
can trade outside the TOI.
The right side of the Market Maker Model will likely unfold
next, allowing participation until the original consolidation is
reached.
2. SMR outside TOI:
If the SMR occurs outside a TOI, wait for the next TOI to
execute trades.
The upcoming TOI is expected to produce an expansion and
deliver the right side of the Market Maker Model, allowing
participation until the original consolidation is reached.
Entry Checklist
Steps to Frame Trades
Follow this checklist to ensure you’re prepared for high-
probability trades:
1. HTF Draw on Liquidity: Is it obvious?
2. HTF Institutional Order Flow: Is it clear?
3. HTF Point of Interest: Has price reached a level where you
anticipate an SMR forming?
4. Time Meets Price: Are they aligned?
5. Smart Money Technique (SMT): Is there a signature present?
6. Change in State of Delivery (CSD): Is it evident?
7. Entry Model: Is it clearly defined?
8. Invalidation Level: Have you established this?
9. Targets: Are your target(s) defined?
10. Execute: Proceed with the trade.
Key Takeaways
Macros: Utilize specific timeframes for trading during key
market sessions to enhance decision-making.
Trading Rules: Understand the conditions under which to enter
trades based on SMRs and TOIs.
Checklist: Use the entry checklist as a systematic approach to
ensure readiness and high probability in trades.
You will find the concept of price in
the next thread
i hope You enjoyed stay tuned...........................
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