2025-02-12 13:49:49
Understanding daily market cycles is crucial for traders, and by integrating Candlestick Pattern Analysis with the Smart Money Concepts (SMC) strategy, traders can pinpoint high-probability setups driven by institutional order flow and liquidity manipulation.
The Daily Chart is a significant element that we could refer to in navigating our trade decisions during the day. This is mostly relevant to those who are trading the markets on daily basis. Don’t worry, we will also have a segment that covers a much higher timeframe in analyzing the Weekly Candle Stick Anatomy and determining the Weekly Market Cycles.
A candle stick usually composes of what we call the “OHLC” or Open High Low Close. These 4 are not just there to tell us where price open, how high and low price reached during the day and where it closed. There’s something more beyond that. We could analyze the market cycles during the day by just checking out the OHLC.
This cycles can be observed during the day at a specific time period. It does not happen all the time at those periods but once opportunity presents itself with these cycles, you could reap a handsome profit.
This can also be referred to as the AMD Concept or the more familiar term, the Power of 3.
Before utilizing and taking advantage of this concept, there must be a premise or a bias in the higher timeframes, particularly the Daily timeframe.
In this situation, we are seeing a bullish sequence by creating higher highs and lows. The premise of our AMD is bullish and we can look for bullish opportunities, intraday.
Timeframes that we can use in the lower timeframes is the H1 or M15 Timeframe as our Higher Timeframe inside the Daily candle.
In the H1 timeframe, we can see an obvious accumulation during the Asian session that we can refer to. At this point, its best that we wait for price to do something first either the support or the resistance line as we don’t want to enter yet since there’s still no manipulation.
This was the playground of the big boys until the markets became public, available, and accessible to anyone Post-1970.
Since there are other entities present in the market, entities with big pockets, we’d like to play around with their footprints.
These footprints can be found during the Manipulation phase.
Where do we look for these concepts intraday?
This happens during the Asian session where we are in a sideways move.
This happens because institutions are engineering liquidity. It allows orders to accumulate wherein there are both stops above and below that range.
The accumulation range we look for is until 12:00NN PHT or 00:00 New York Time.
The support and resistance level is a key area that is very attractive where algos might take interest in since this is where most Stop Loss orders are place.
Going back to the example above, we can see an obvious range during the Asian session.
Since the other premise is that liquidity has now been engineered by making a range bound price action, we wait for the high or low to be taken out. We’d like price to do something with the high and low during the London session.
During this time, the look of the Daily candle here is bearish and we are below the opening price of the day where we are looking for an opportunity to go long.
The key here is to be patient and wait how price will react on the support and/or resistance level.
If we are looking for a bullish opportunity, we can anticipate either of these to happen in favor of the bullish side:
Note that we are looking for a bullish opportunity on intraday since the premise of our daily chart is bullish but it doesn’t necessarily mean we won’t adjust to bearish if given the opportunity. Our methodology in approaching the market must not be rigid but we are to be flexible on what the market will show us.
There are still other scenarios like it will go on a long sideways or will finally breakdown. The key here is to wait and observe what price will do and how it will react at the SnR (Support and Resistance) levels before anything else.
This is the phase where want price to react at a certain level with a momentum.
We can go down the lower timeframes like M15 and M5 to see signs of momentum and reversal patterns.
In this case, there’s significant move to the upside. Price have also broken the previous high for an upside potential.
If we are indeed bearish, we’d want price to have a bearish follow-through but in this case, we have not seen any significant bearish move.
If all goes well, and price goes in our favor, this is what the Daily candle we are anticipating to build.
Note that there are times the market during Asian is still on distribution and London will be on accumulation and at New York, the manipulation will occur.
The cycles may vary depending on the catalysts like interest rates, and other significant red folder news.
This content covers the daily candlestick structure and its significance in identifying market cycles for intraday trading. The concept is based on the AMD (Accumulation, Manipulation, Distribution) or Power of 3 framework, emphasizing a structured approach to navigating market phases.
1. Daily Candlestick (OHLC Analysis)
The daily candlestick structure (Open, High, Low, Close) provides essential data to understand market behavior. Traders can interpret market cycles during the day using these points.
2. Market Cycles
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