Will Street

🥷Welcome to Chapter 2 of the series "DECODING THE ALGORITHM".

In this chapter, I will talk about:

 ⏲️TIME-BASED ENTRIES⏲️

I'm sure you've often wondered, what is the best time to enter a trade? Let's find out!

(2/11)

Before we begin, you should know that the market is divided into several time zones: Asia, Europe, and America.

Our focus for trading Forex will be on the London open, London lunch, and New York AM session.

This is probably the first time you've seen sessions split by these specific hours. You have two options: either you trust what I'm telling you, or you use the killzones that everyone else uses, and you'll get the results that everyone else gets. ;)

(3/11)

If we split the 24 hours of the day, we’ll find that there are key hours in the price action. I won’t go into more detail on this point, but if we want to align sessions with the available time frames, we’ll see that the 6H, 4H, and 1H candles are where we will find our best entries.

If we overlay the 6-hour chart, the candles that coincide with our sessions open at 23:00, 05:00, and 11:00.

If we overlay the 4-hour chart, the candles that coincide with our sessions are at 01:00, 05:00, and 09:00.

(4/11)

Once we know this, you should also know that each individual candle can be treated like a daily candle, with its PO3, OHLC / OLHC.

These three candles (01:00, 05:00, 09:00) make up the body of a daily candle, where one of these three candles will represent accumulation, manipulation, and expansion.

(5/11)

But this chapter is about which candles we are going to trade, right?

Let’s start with the 0100 candle:

This candle (from 01:00 to 05:00) is the London open candle. Where will the body of this candle form?
00:00 Accumulation
01:00 - 02:00 Manipulation
03:00 Distribution (we trade this candle)
04:00 Continuation / Reversal

(6/11)

Next is 0500 candle, this is the London lunch, we trade this candle when one of the following three criteria is met:

The 01:00 candle has reached its target → Reversal
The 01:00 candle has not reached its target → Continuation
There is news at 08:30

(7/11)

Let's continue with New York AM session,  will trade the 0900 candle when:

There has not been an expansion candle at 01:00 or 05:00.
The daily DOL has not been reached.
The daily DOL has been reached, and a reversal scenario is created.

(8/11)

Finally we have the New York PM session, actually I don't trade this candle and I don't recommend it in forex, but anyway:

Trade this candle only when the daily dol is not met during NY am session.

(9/11)

Once we know which candles we are going to trade and how, where are we going to enter?

Before getting into this point, you need to watch Chapter 1 of the "Decoding the Algorithm" series (https://x.com/willstreet_fx/status/1827706140357976407?s=46&t=li7kgeOu2vtc0ptalXNR1Q).

As we know, the algorithm makes a purge making the move. Extrapolating this to LTF candles, where do we enter?

Each new candle aims to take at least the high or low (or attempt to) of the previous candle, so we will enter at the beginning of new candles.

(10/11)

So, when do we enter our trades?

There is a grace period in the algorithm. This refers to the first 15 minutes of the new hourly candle and the last candle of the hour. 

This way, we enter the trade optimally, as we enter at the wick of the PO3 of the new candle. 

Backtest it and thank me later.🪄

(11/11)

To conclude...

We wait for a HTF purge of the previous candle and then in the first 15min of the new candle another LTF purge, then we entry.

What happens in swings where the previous candle is not mitigated? Then a failure swing is created. 

How about 250 RT to make this Chapter 3?

att:

- 🐺

🥷 Welcome to Chapter 3 of the series "DECODING THE ALGORITHM by WillStreet

In this chapter, I’ll be talking about:

FAILURE SWINGS

Why doesn’t the price always take out the previous low or high before making a move? Let’s find out!

🧵👇

(2/14)

🔙Before we begin, you should have watched the previous two chapters to understand the context and how the algorithm is programmed to move the price.

If the price always took out the previous candle on every timeframe before each move, it would become too predictable so everyone would make money.

🥷That’s why there are certain conditions and characteristics that trigger exceptions, leading to the Failure Swing.

(3/14)

⏲️In essence, a Failure Swing occurs when the price fails to create a new swing before making a move. However, this isn’t always the case; sometimes, a failure swing can appear mid-move, but always keeping in mind what was discussed in Chapter 2 about the start of the trading hours.

(4/14)

💡Here’s an example of what a Failure Swing looks like visually. In this case, we would keep waiting for the previous high to be taken out, and we’d never get our entry.

In Image 2, you can see the ideal entry at 02:00 and the ideal exit at the new low at 05:00.

(5/14)

Let’s start with the reasons why this happens:

💎Reason #1: Divergence with highly correlated or inversely correlated pairs (like the DXY).

In this example, Pair A does take out the previous HTF candle, while Pair B fails to do so.

Therefore, Pair B would be valid for selling because, according to the algorithm, the raid on the previous candle has already been completed, and there’s no need to revisit it.

(6/14)

Here’s a real example showing a Failure Swing at the beginning of the move and mid-move.

Beginning: The 03:00 candle fails to mitigate the low of 02:00, while the correlated asset (GU) does. In this case, GU is our trigger, and we’re clear to buy.

Mid-move: The PO3 of the 04:00 candle in EU fails to mitigate the low of the previous candle, while GU completes it, making it valid for buying as well.

Our exit for the long would be at the new 4H or 6H candle, around the new high at 05:00.

(7/14)

💎Reason #2: Purge at the End of the Hour

If the price created a raid on LTF in the last 15 minutes of the hour, the algorithm validates this raid. The new hourly candle will fail to attempt the raid again (since it’s already been done). Our entry would be on the new candle, after the LTF raid, as we need confirmation that it won’t be revisited.

(8/14)

Here’s a real example:

On the 1H chart, the price fails to create a new high. I imagine it this way on the chart for the following reason:

In the 5-minute chart, we see the high occurred exactly at 02:55, the last candle of the 02:00 hour. The algorithm validates this raid, so it doesn’t need to revisit it. The entry is at the 03:05 candle, and the exit is, as usual, at the new candle at 05:00.

(9/14)

Another example, same process: The 03:00 candle fails to create a new high. We check the LTF to see what time this occurred, and surprise, it was again at 02:55. Our entry is at the 03:05 candle, and the exit is at the low of 05:00.
Here, we also have extra confirmation, GU did take out the high of the 02:00 candle, giving us two confluences that indicate the price is about to start a bearish move.

(10/14)

💎Reason #3: Price Attempts to Make the High or Low at the Beginning of the Hour

In the first 15 minutes of the new hourly candle, the price tries to attack the previous high or low and fails. When it fails, the algorithm validates the raid of the previous candle.

Adding divergence to this reasoning strengthens the argument.

(11/14)

Let’s look at a real example:

On the 1H chart, EU fails to create a new high at 08:00.
When we look at the 5-minute chart, we see that at the beginning of the hour (08:05), the price attempts to create the new high but fails, this is validated.

In this case, GU followed the correct procedure, so we add strength to our argument with divergence.

(12/14)

Another example:

Now we’re at the London lunch. At the 05:00 candle, the price takes out the high of the 01:00 candle. When we check the LTF, we see that at the start of the new hourly candle at 06:00, the price tries to make a new high, taking out the high of the 05:00 candle but fails.

Entry would be on the next candle, after rejecting the high, with our exit at the new 4H candle at 09:00.

(13/14)

These are the main reasons but there are others I can't share.🤐

🥷Chapter 4 will focus on the logic behind my entries and exits and how the algorithm seeks efficiency when creating price reversals.

For that, 250 RTs, just like in Episode 2! 😉

(14/14)

The main reasons why the price fails to mitigate the previous high or low before making a move are:

· Divergence with a correlated or inversely correlated pair

· The last candle of the hour completes the LTF raid

· The first 15 minutes of the new candle attempts to attack the previous candle but fails.

🩷If you found this helpful, I’d appreciate a like + retweet for my work. That way, I’ll continue the series with 

🥷Episode 4: The Logic Behind My Entries and Exits.

Att:

- 🐺

🐺 DECODING THE ALGORITHM 🥷🏼

Have you ever thought about how the algorithm is coded?

I guess you’ve never paid enough attention to the details. I’m going to start a series and reveal a small portion of how price delivery works and how we can take advantage of it.

Let's go to CHAPTER 1.

A thread🧵

(2/10)

For market makers, it's impossible to manually control the prices of all markets, assets, and timeframes. 

For this reason, in the 80s, an algorithm was invented to deliver prices efficiently in the markets. 
The market makers only need to input certain values, specify the program in which they want the price to execute the movement, and set the speed.

(3/10)

Since the algorithm is coded the same way, it makes the price fractal across all timeframes—annual, weekly, and even 15-second charts. 

The only thing that changes is the time it takes to form the candle.⚡️ 

(4/10)

In the first chapter, I’ll discuss the efficiency of price delivery. Do you notice any visual differences between the two charts?🪞

And if I tell you that one is a weekly chart while the other is a 1 minute chart, what do we notice in both charts when creating a swing high or low and reversing?

(5/10)

Before starting a bearish move, the algorithm will create a new candle that mitigates the last high to enable a downward move. 

The intention is to reduce the maximum number of people making money while shorting and to hunt for the maximum number of stops from early sellers.

The opposite occurs in a bullish market.

(6/10)

How can we identify a swing and that the price will reverse?

🥷🏼In this chapter, I won’t reveal this secret. Just think about aspects like time and simple things such as candles, highs, and lows. 

(7/10)

As mentioned earlier, this occurs in all timeframes you can imagine. 
For my trading style, it doesn’t make sense to wait for a monthly or weekly high or low to be mitigated, or for a 1 minute or 15-second candle to be mitigated… But, what if we wait for the 1 day and 1h candle to be mitigated?

(8/10)

So, how can we take advantage of this?

When a swing high or low is created, we wait for the next new candle that mitigates the opposite side of the next movement and then enter our trade.

This is how we can trade turtle soup setups with such precision and capitalize throughout the entire movement.

(9/10)

What happens with swings where the previous candle is not mitigated? Then a failure swing occurs.

 How about 500 retweets for this to be Chapter 2? ;) 

(10/10)

Closing here...

To conclude, we wait for a raid of the previous HTF candle and when it's mitigated we go to LTF and wait for exactly same protocol.

If you enjoyed this thread, please share and give some love. 

Can we reach 500 RTs for Chapter 2? 

🥷🏼You won’t want to miss the failure swing...

Att,

- 🐺

🥷 Welcome to CHAPTER 4 of my series "DECODING THE ALGORITHM" by Will Street.

 🎯Today, I'll break down The Logic Behind My Entries and how I pinpoint trading opportunities with precision.

If you truly understand how the algorithm works, you'll leverage it to get the best entries possible.

🧵👇

(1/18)

🔙Before we dive in, make sure you've checked out the previous chapters. They provide the necessary context on how price move occur and why they happen. 

Once you've done that, come back to Chapter 4 to deepen your understanding of entry logic.

(2/18)

🔁Every entry is also an exit, and vice versa. If you recall Chapter 1, the algorithm always mitigates the highsand lows of the previous candle across all timeframes, applying the fractality of price. 

We trade these HTF (High Time Frame) raids on LTF (Low Time Frame). This means, when the market shifts from a buy program to a sell program, it mitigates the high before moving down. 

If we're in a buy, our exit point is precisely this high. For a sell, our entry is the exit of a buyer. This is the concept of algorithmic order pairing: every candle starting a move must be mitigated, creating opportunities for us to trade.

(3/18)

💡During the price movement from the starting point to the Draw on Liquidity (DOL), the range is divided into four quarters. My strategy focuses on trading the first and last quarter.

Why? The first quarter provides the most optimal entry, minimizing drawdown and maximizing the risk-reward ratio. 

The middle can cause retracements that might stop us out. 

The last quarter is where price has mostly completed its move, offering a final opportunity to join the trend via a low-time frame raid.

(4/18)

Visual Example: Let’s visualize this with a bullish example. 

Our first buy happens when the High Time Frame Draw on Liquidity (DOL) is mitigated. As the price reaches the previous low, we factor in time and the type of HTF raid. 

The second entry occurs when a Low Time Frame raid happens, ensuring we enter as close to the start of the move as possible. 

The third entry is when price fails to complete the HTF bullish DOL, giving us a chance to enter, albeit with a lower risk-reward.

In a bearish scenario, we apply the same concepts, but in reverse.

(5/18)

In a bullish case, always buy on the buy side of the curve to avoid drawdowns. 
Trade during the new candle hours, except if a failure swing* occurs at the end of the previous hour (explained in Chapter 3).

We never buy before the Turtle Soup has formed. You have two options: follow my WS Time-Based Entry Model or wait for confirmation entries, which I'll explain next.

(6/18)

How to Enter: Low Time Frame Raid WS Time-Based Entry Model Once you know when to enter, here's how: The Low Time Frame raid in my WS Time-Based Entry Model is the most optimal entry, always occurring after an HTF raid. If it captures the previous hour, that's even better.

For example, if this happens at 03:00, ensure the HTF raid has already been taken, followed by the 03:00 candle raiding the 02:00 high/low. Place your stop-loss to aim for a 3R reward toward your DOL without being stopped prematurely.

(7/18)

Second Entry Type: Order Block Confirmation If you're looking for confirmation entries, wait until a Swing High/Low has been mitigated by the HTF and previous hour’s candle on a Lower Time Frame. Look for an engulfing candle on a 5 or 15-minute chart that engulfs the candle forming the Swing High/Low. Enter when the next candle performs a PO3.

In a bearish case, enter when the candle touches the previous one, after it has closed below. This is known as the Order Block. Place your stop-loss above the high with at least a 5-pip margin.

(8/18)

Entry Type #3: Last Quadrant In the last quarter, wait for the price to fail at completing the HTF Draw on Liquidity, triggering a Low Time Frame raid within the final quadrant.

 Here, we aim for a 1R or 2R profit, no more. Once the target is hit, exit the trade.

(9/18)

🚫Where I Avoid Trading: I avoid trading towards the end of the hour, except when a Failure Swing occurs, as detailed in Chapter 3. 

I also avoid trading halfway between the start and DOL, as entering there can lead to a retracement that stops you out.

(10/18)

Real Example of Low Time Frame Entries:

Entry 1: After a Low Time Frame raid follows the HTF raid.
Entry 2: Price returns to the candle that created the Swing Low.
Entry 3: When a Low Time Frame raid occurs in the first quarter towards the HTF DOL.
Always focus on the first and last quarter for the most optimal entries.

(11/18)

Entry Patterns:

This is what happens when you become a "pattern trader" without truly understanding how price moves.

In the first image, I apply Smart Money or ICT concepts, and we can see how, by only following patterns, we would be completely rekt.

In the second case, we apply the logic behind price movements, identifying the true Draw on Liquidity and understanding what the price is doing at a given time. At 4 o'clock, the Failure Swing is created, marking our ideal entry point.

(12/18)

🐑I'm sure all of you are trading the following: Turtle Soup, MSS, OTE retracement, or FVG, followed by the entry. The problem is, if you trade like everyone else, you'll get the same results as them.

🥷To be different and truly successful, you need to understand price action and focus on what really matters: time, highs and lows, the Draw on Liquidity, and the economic calendar. That’s what will give you the edge.

(13/18)

High Time Frame Reversal Patterns:

Let's see some real reversal patterns in High Time Frame. This is how reversal patterns manifest in candles on higher time frames

If you don’t believe me, I invite you to check for yourself. Study each High Time Frame Reversal and see how the candles behaved on lower time frames. Here’s some homework for you: look for the Swing Highs and Swing Lows on the 4hour chart, then drop down to the 1hour chart and find the entries on the 5minute chart using the concepts I just explained, applying the WS Time-Based Entry Model.

(14/18)

Real Example of Low Time Frame Entries:

Let’s look at another real example of entries on

1. The first entry is made once the Low Time Frame Write has occurred after the High Time Frame Write.

2. The second entry happens when the price returns to the candle that created the Swing Low.

3. The third entry takes place when a Low Time Frame raid occurs within the last quarter, heading toward our High Time Frame Draw on Liquidity.

Remember, as I mentioned before, we don't trade in the middle of the move. Although you might avoid drawdown in some cases, trading in the middle of the run will ultimately lead to losses. Focusing on the first and last quarters will always provide the most optimal entries.

(15/18)

Stop Loss Placement:

Entry 1: Aim for 3R from the LTF raid to your DOL.

Entry 2: Place your stop-loss just below the Swing Low.

Entry 3: Target a 1-2R ratio, as you’re far into the move.

(16/18)

🥷WS Continuation Model: This is the topic of Chapter 5 coming in October 2024, focusing on how continuations develop in an existing move.

🔥 If you want early access to this model, show me some love

(17/18)

🎁 Bonus: If this thread hits 100 RT, I’ll release a YouTube video with real-life examples of these entry techniques in action. Don't miss out! 🔥

(18/18)

Conclusion: 

1️⃣ Avoid trading solely based on entry patterns. 

2️⃣ Understand the HTF Order Flow and DOL. 

3️⃣ Trade only in the first and last quarter of the move.

If you found this thread valuable, hit like, share, and leave your feedback. Your support helps me continue sharing this knowledge! 🫶