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Demystified ICT 369-21-32

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428 views12 pages

Demystified ICT 369-21-32

Uploaded by

raquelpinheirocr1234
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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You are on page 1/ 12

When you’re only interested in the current PO3 partition,

because this is where current price action is taking place, go


to the next part, where we discuss the calculation of the
current PO3 partition.

Above you see a chart of Microsoft with all visible PO3


partitions for PO3 27 on it.
We start at base 0, this partition runs until 27, the next
partition runs from 27 towards 54, next from 54 to 81, …

Typically, as discussed, price tends to “stay in the range” for a


while. It can brie y leave the range, and go back into it, or it
can leave it, and move on to the next PO3 partition.

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YOUR TRADING PROFILE / SIZE
Every trader has a certain style. This is linked to your
personality, your (working) situation, …

Some people can only trade once per month and are looking
for a position trade. The other want to trade twice every
session, and scalp a certain amount of pips, while others
prefer a “one shot, one trade” per week.

Below you’ll nd an overview of a typical range (or number of


pips / handles they are looking for), and map it to the type of
trader you are. (Scalper, day trader, long term trader, …)

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Number Swing Size Used For

31 3 Stop Runs

32 9 Stop Runs / Scalping

33 27 Intraday trader /
session trader

34 81 Daily Range

35 243 Weekly Range

36 729 Monthly Range

37 2187 Yearly Range

38 6561

39 19683

310 59049

311 177147

You’re looking at a swing of the “type of trader” size (eg. 27


for a scalper), inside a PO3 dealing range we’re going to
identify.

Read the next part determine optimal PO3 DR size on how


to calculate the most optimal dealing range you need to use.

Inside this optimal PO3 dealing range, you will look for the
swings you’re interested in.

So for example, we identify the most optimal PO3 dealing


range as 243 pips, and we - as a session trader - are looking
for 27 pips/handles inside this dealing range.

Page 23 of 147 Version 1.0.8


DETERMINE OPTIMAL PO3
DEALING RANGE SIZE
Now the question is, how do I know what PO3 value to use
for the asset I’m currently trading.

I would suggest to open a 4 Hour chart, and look at the most


obvious swings.

They will most likely come in the form of a PO3 level, it will
jump straight from the chart, as you can see here on this 4H
EURUSD chart.

We see a lot of swings of 243 pips, so that’s the number


we’re going to use going forward for the dealing ranges.

Page 24 of 147 Version 1.0.8


On top of that, I also use a chart with 1 PO3 level higher, so
that would be a 729 chart in this case. I use this to follow the
longer term picture, usually on a 4h or daily chart.

One can also opt to use a chart with a level lower than the
number we found, so this would be a 81 PO3 dealing range
chart in this case.

We can monitor this to see if we potentially need to do a


range expansion (use the larger PO3 number), or do a range
contraction (use the lower PO3 dealing range).

Page 25 of 147 Version 1.0.8


USING PO3 DEALING RANGES
In the previous part, we learned how to calculate the PO3
number. This number is now going to be used to de ne our
PO3 dealing ranges.

Remember from the previous part, we will use PO3 partitions


starting from base 0, so start at the 0 level.
This can be 0 for crypto, stocks, … or 0.0 for forex.

In order to calculate the dealing range partition we’re


currently in for our asset – be it fx, indices, crypto, … – we
need to have following variables:
current price
the most optimal power of three number. Read the part on
how to calculate the optimal PO3 dealing range,
previously discussed in the book

We’re going to draw a xed range, using 2 lines, which will


delineate our PO3 dealing range.

For the current price, we’re just going to open a chart, and
take the price that’s currently printing.

Now, we’re going to calculate the current PO3 dealing range


low and high.

For this, we take the current price, and remove the decimal
point, if there is one.

We are also only interested in the integer part for anything


not forex related.
For forex we use the rst 5 numbers, and ignore the decimal
point.

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Asset Current Price Price to take

EURUSD 1.23459 12345

SP500 4032.8 4032

Bitcoin 23589.4 23589

DXY 124.456 12445

Gold 1921.78 1921

Page 27 of 147 Version 1.0.8


Now that we have our base price to use, all we need is the
power of three number we de ned as optimal (in the previous
part).

Use the following formula to calculate the low of the current


xed dealing range.

dealing range low = floor(current price /


optimal po3 number) * optimal po3 number

The oor function is of importance here. It will take only the


integer number, and disregard the fractional part.
If we don’t do this, we will end up with the same number as
we started with.

Eg. 12345 divided by 243 = 50,802469135802469


We are only interested in the number before the decimal
point, i.e. 50.

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EXAMPLES
Using the oor function in for example excel, you take the
current price, divide it by the power of three number, and you
only take the integer part, ignoring the fractional part.

current po3 Result oor ( Dealing


price num current range
ber price / low
po3
number
)

12345 243 50,8024 50 50*243=


6913580 12150
25

4032 81 49,7777 49 49*81 =


7777777 3969
78

23589 2187 10,7860 10 2187 * 10


082304 =
527 21870

Page 29 of 147 Version 1.0.8


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Now that we have de ned our dealing range low, we can
calculate the dealing range high.

We just take the dealing range low and add the power of
three number we used in our formula above to it.

So let’s say we are calculating the dealing range high for our
EURUSD asset.

We determined above that the PO3 dealing range low for our
243 PO3 range was 12150.

We add the 243 PO3 number to it, and we get a dealing


range high of 12150+243 = 12393

dealing range high = dealing range low +


po3 number

The last step we need to do is to put back the decimal point,


at the position it originally was, and the asset was forex
related.

In our EURUSD example, the decimal point was after the rst
position, so we get following dealing range low and high for
our 243 PO3 range

dealing range low = 1.2150


dealing range high = 1.2393

Page 30 of 147 Version 1.0.8


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FRACTAL PO3
Below you see a 243 PO3 dealing range, with equilibrium and
the 1/3 and 2/3 levels as well.

The nice thing of the PO3 ranges is that you can divide them
in 3 parts, and each of those 3 parts, will be a smaller PO3
range in itself.

So the above 243 PO3 consists out of 3 smaller 81 PO3


ranges.

You will have a premium part, a discount part and an


equilibrium part.

We will re ne the levels to be used inside the dealing range


later in this book.

If you can’t wait, read up on the Goldbach levels, aka


Huddleston levels (or IPDA).

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It’s good to emphasise that I use just the big range, here 243.

I don’t split these up into 3 81 pip ranges, but rather go for the
wireframe, i.e the Goldbach levels you’re about to read.

The 3 partitions here were just to highlight the fractional part


of PO3 numbers.

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