TLDR;
This video explains the quarterly theory, a refinement of ICT (Inner Circle Trader) concepts using time-based analysis. It details how the market moves in four distinct quarterly stages—accumulation, manipulation, distribution, and reversal/continuation—across different time frames (monthly, weekly, daily, and intraday). The video also introduces the concept of "true opens," particularly the true day open, as key levels for identifying potential trading opportunities. The presenter uses chart examples to illustrate these concepts, showing how to anticipate price movements and use true opens as magnets for price action.
- Quarterly theory divides market movement into four stages: accumulation, manipulation, distribution, and reversal/continuation.
- These stages occur across different time frames: monthly (4-hour), weekly (1-hour), daily (15-minute), and intraday (5-minute/1-minute).
- True opens, especially the true day open, serve as significant levels that price tends to gravitate towards.
Introduction to Quarterly Theory [0:01]
Quarterly theory suggests that the market operates in four distinct phases within specific time intervals. These phases are accumulation, manipulation, distribution, and reversal or continuation. The market follows a pattern known as AMDX or X AMD, where A stands for accumulation, M for manipulation, D for distribution, and X for reversal or continuation. Each quarter has its own behavior and designated time within the market cycle.
Time Frames and Quarterly Divisions [0:59]
The timing of these quarters varies depending on the time frame being analyzed. On a monthly cycle (using a 4-hour chart), each week represents a quarter: the first week is quarter one, the second week is quarter two, and so on. For the weekly cycle (1-hour chart), Monday is quarter one, Tuesday is quarter two, Wednesday is quarter three, and Thursday is quarter four. In the daily cycle (15-minute chart), the Asian session is quarter one, New York AM is quarter two, and New York PM is quarter three. For shorter cycles like the 90-minute or micro cycles, each session is divided into four equal parts. For the 90-minute cycle (5-minute chart), each quarter is 90 minutes long, while for the micro cycle (1-minute chart), each quarter is 22.5 minutes.
True Opens Explained [3:39]
True opens are the opening prices at the beginning of quarter two of each cycle. A general guideline is to buy below true opens and sell above them. The presenter emphasizes the true day open on the 15-minute time frame, which occurs at midnight New York time, as the most useful. True opens can act as draws on liquidity, similar to magnets, attracting price towards them.
Chart Example: AMDX Pattern [5:20]
The presenter uses a chart example to illustrate the AMDX pattern. In quarter one, price accumulates liquidity. Quarter two involves a manipulation move, taking out sell-side liquidity and creating an SMT (Smart Money Tool). Quarter three sees a significant upward move, distributing price. Quarter four results in continuation or reversal. The presenter uses the "Day Quarterly Theory" indicator by two degrees to mark out the boxes of the stages of price.
Chart Example: X AMD Pattern [9:59]
Another chart example demonstrates the X AMD pattern. Quarter one shows price moving in one direction, indicating a reversal or continuation (X). Quarter two involves sideways movement, representing accumulation (A). Quarter three shows manipulation (M), with price moving higher to manipulate. Quarter four shows distribution (D), with price moving lower.
Using True Opens in Trading [13:15]
The presenter explains how to use true opens, particularly the true day open, to identify trading opportunities. Midnight open acts as a magnet, drawing price towards it. In the example, price is below the true day open, suggesting a potential long trade towards the true day open. The presenter identifies a manipulation leg on the 5-minute chart, Asian session lows, and a sequential SMT on the 90-minute cycle. A cracking correlation and an SMT fail further confirm the long entry. A five-point stop loss is set, targeting the true day open for a 1 to 13 risk-reward ratio.
