0:02 Hello, my name is Ali Khan and I've been
0:05 trading for around 10 years and nine of
0:07 those years I have specialized in
0:09 algorithmic price action. In today's
0:12 video, I'm going to go over my favorite
0:15 model and what I believe to be the best
0:18 model that you can trade in 2026. It's a
0:20 relatively straightforward and simple
0:23 model with very few moving parts. But
0:25 today I'm going to cover some of those
0:27 things and give you the real nuts and
0:30 bolts of what makes a really high
0:34 probability model. So one of the things
0:36 that we're going to need when it comes
0:39 to any model is understanding liquidity.
0:41 For this specific model, we're going to
0:44 be using session liquidity. So session
0:47 highs and session lows. We're also going
0:51 to be using fair value gap. or areas of
0:53 inefficient price action. And thirdly,
0:56 we are going to be using dealing range
0:59 theory or I call DRT that we will use as
1:02 a framework to find where high
1:05 probability setups will occur. Now,
1:07 before we move any further, without
1:08 understanding higher time frame
1:11 narrative, i.e. where the market wants
1:14 to move to and why, it's very difficult
1:16 to determine where high probability
1:18 setups are going to form. And that's
1:20 simply because when we are trading in
1:22 the direction of higher time frame order
1:24 flow, for example, if we're bearish,
1:27 then ideally we want to see a buy side
1:31 liquidity pool rated before we look for
1:33 an entry. And obviously vice versa, if
1:35 we are bullish, we're looking for a
1:38 sellside liquidity rate. Now, we don't
1:40 want to look at just any random old high
1:44 and low. We want to ideally look at the
1:46 liquidity relative to the previous
1:48 session. The algorithm is always going
1:51 to repric to near-term liquidity first.
1:53 And without over complicating this, I'm
1:55 going to quickly run through a few
1:57 charts here. And at the end, I'm going
1:59 to give you an actual real trade example
2:01 based on the information I'm going to
2:04 teach you in this video. So, we of
2:07 course have a chart here on gold. this
2:11 dotted line here, I'm delineating the
2:14 12:00 a.m. New York Eastern Standard
2:17 Time on a 5minut time frame. Now, the
2:19 reason 12:00 a.m. is important is
2:21 because it's the start of a new day.
2:24 It's the start of a new delivery cycle.
2:26 So, at this time, the algorithm is going
2:30 to look back and is going to reference
2:32 liquidity pools above the market and
2:35 below the market. The opening price at
2:38 12:00 a.m. is a specific price point.
2:40 It's a specific data point that the
2:43 algorithm is going to utilize when
2:45 referencing previous price action. Now,
2:47 what do I mean by that? Well,
2:49 essentially, we can use it as a filter.
2:51 Now, for the sake of argument, let's say
2:55 that we have a bearish higher time
2:57 frame. We've seen a massive expansion on
3:00 gold and now the market is retracing
3:02 lower. So, the first thing we want to
3:05 see is the market reprice
3:08 above the 12:00 a.m. opening price. As
3:10 we can see here, above the market, we
3:15 have all of these relative equal highs.
3:17 Now, above those highs, there's going to
3:20 be buy side liquidity in the form of buy
3:23 stops. So, breakout traders are going to
3:26 be going long once price obviously
3:27 breaks towards the highs. Now, Smart
3:29 Money anticipate this and what they're
3:32 doing is they're pairing that liquidity
3:34 in the form of buy stops with short
3:36 positions of their own and they're going
3:38 to offset those positions to opposing
3:42 liquidity down here. Right now, I'll get
3:45 on to that in a second, but firstly, we
3:47 can see here a few things. We can see
3:50 that at 12:00 a.m. the market has gone
3:53 higher collecting all of those buy stops
3:56 and then we quickly see it repric lower
3:59 when this candle over here. This is a
4:02 sellside imbalance and something that we
4:04 call a fair value gap. Now what's
4:06 important here is a few things. This
4:08 displacement lower has traded through
4:12 the opening price of these three
4:15 consecutive sorry four consecutive uplo
4:17 candles. What this signals to the
4:18 algorithm is a change in state of
4:20 delivery which basically means that the
4:23 algorithm is finished offering buyside
4:26 delivery and now it's going to repric
4:28 lower by offering sellside delivery.
4:31 That's the first clue that the markets
4:35 turned around. Number one, we have seen
4:38 a liquidity raid.
4:41 raid.
4:44 Number two, we have seen a break and a
4:48 close below this swing low. So, we have
4:52 seen a break in market structure.
4:56 Thirdly, we have seen from this candle's
4:59 low to this candle's high, we have a
5:03 fair value gap. This will be our third
5:05 thing that we are looking for to sell a
5:08 high probability entry short. Notice
5:10 that the liquidity pool that we raided
5:12 was the previous
5:14 Asian session. Now this is where the
5:17 algorithm will repric to generally if we
5:20 have low or medium impact news. If we
5:21 have high impact news however then it
5:25 can often repric to the previous London
5:28 and or New York session on the previous
5:29 day. That's why it's important to
5:31 obviously look at the economic calendar
5:33 to determine how far that price can
5:35 raid. But let's say for example here
5:38 that we didn't manage to get up here cuz
5:40 again this is going to be a very
5:42 difficult entry and you need quite a bit
5:44 of experience to trade that high. What
5:47 is better is to wait for the
5:50 displacement and then what you want to
5:52 do is you want to grade the entire
5:55 dealing range. Now what do I mean by
5:57 that? Well, if we have our lowest low
6:01 down here and our highest high up here,
6:03 what the algorithm is going to do is
6:05 it's going to ignore the candles, the
6:08 first thing it will reference is the
6:11 highest price, which we can refer to as
6:14 the dealing range high or the DRH. the
6:17 lowest price which is the dealing range
6:22 low, the mid price which we call our 50
6:25 DRT level and then the prices in between
6:28 each of those price points. So we have
6:31 the 25 DRT here with this orange line
6:35 and the 75 DRT here. Now this is
6:37 important because the algorithm is going
6:41 to print arrays around these price
6:43 points. Now, if you look closely here
6:46 inside of the fair value gap, we have
6:50 that 75 DRT level that overlaps, which
6:54 is also in close proximity with the 12
6:56 a.m. opening price. So, this is a
6:59 fantastic area to go short. It's also
7:03 worth noting that nested at that 75
7:06 level, we also have a reclaimed fair
7:08 value gap here. You can see how the
7:10 bodies here are failing to close above
7:12 that fair value gap. They're also
7:16 failing to close above the 75 level and
7:18 also failing to close above the
7:20 consequent encroachment or the midpoint
7:23 of that sellside imbalance. Not to
7:26 mention we also have this down close
7:28 candle which is a breaker. We have a
7:32 high, a low, a higher high, and we also
7:34 have those four consecutive up close
7:36 candles, the bearish order block that I
7:38 spoke about earlier. So, what's
7:40 happening here is that we're pairing
7:42 timebased liquidity in the form of the
7:44 Asian highs, the 12 a.m. opening price
7:48 as a filter, seeing price sweep by side
7:52 liquidity. We're pairing the 75 DRT
7:56 level with one, two, three, four
7:59 different PD arrays also with that 12
8:02 a.m. opening price. So, this is what
8:04 constitutes a really, really high
8:06 probability setup and is one of my
8:08 favorite models that has made me and my
8:10 students a lot of money over the years.
8:13 When we're trading this, we would set a
8:17 limit order at the 75 DRT level. Our
8:19 stop would go above the dealing range
8:22 high and our takerit would go at the
8:25 dealing range low. Notice that we have a
8:28 higher low to the right. This
8:31 constitutes a low resistance liquidity
8:34 run signature. Smart money are going to
8:36 pair sell orders with the buy stops
8:38 above the Asian range high and they're
8:42 going to offset those positions to the
8:46 sell stops below the Asian range low.
8:48 Now, when you apply higher time frame
8:51 narrative, directional bias, economic
8:53 calendar, and the time of day to
8:55 everything that I've just outlined over
8:57 here, this can very quickly retire you.
9:00 Now, let me go through another example
9:02 just to give you a little bit more
9:05 detail here. So, we have here the Euro
9:07 dollar. Now, this is on the 4hour time
9:09 frame. Here we can see that inside of
9:12 this range here we have the highest high
9:15 which is our dealing range high and we
9:18 have our lowest low or our dealing range
9:20 low. Once we have these levels of course
9:24 we can grade again here we are looking
9:27 for a continuation lower since this
9:29 higher time frame is trending lower. In
9:33 this scenario, we have the market
9:37 repric higher after raiding some lows or
9:39 balancing an inefficiency to the left.
9:43 The market has repriced above the 50 DRT
9:46 level or the equilibrium price point
9:48 which is the fair price between the
9:50 highest price and the lowest price.
9:52 Ideally, we want to look for shorts
9:56 above the 50 DRT level. Now just like
9:58 anything when it comes to price
10:02 everything's fractal. We can also divide
10:05 each of these quadrants in half also
10:08 where we can find the midpoint of this
10:11 premium quadrant. Now overlapping that
10:15 quadrant is this balanced price range.
10:18 So we have sellside delivery going lower
10:21 here. We have buy side delivery going
10:24 through that range. And then we have
10:26 sellside delivery back through that
10:28 range. Now this is something known as a
10:30 balanced price range. A balanced price
10:33 range generally happens in three stages.
10:37 We repric lower, we redeliver higher and
10:39 then we rebalance back through that
10:42 range. Now notice all of the candles here,
10:44 here,
10:45 they're really struggling to get back
10:47 above that range because it's been
10:49 sufficiently balanced. And we see the
10:52 rejection from that lower. Now below the
10:57 market, we also have this buy side this
10:59 buyside imbalance between this candle's
11:02 high and this candle's low. Notice that
11:06 it also overlaps with the 25 DRT level.
11:09 So this could be a potential target
11:12 lower. We do not need for price to drop
11:15 below the dealing range low.
11:16 At the time of this recording, I
11:19 currently have some positions on that I
11:21 have left as runners and I'm managing
11:23 that position to see if we want to reach
11:25 that dealing range low. But I'll show
11:27 you that on the next couple of slides.
11:30 So, let's drop down into the 15minute
11:31 time frame and let me talk you through
11:34 the actual trade. I was using that
11:36 balanced price range inside of that
11:39 premium area as the framework for this
11:43 current trade. Right now notice here in
11:46 London we create a high. So from the
11:49 times of 2:00 in the morning till 5:00
11:51 in the morning we have our London
11:57 session. This is our London high, right?
11:59 This is a key liquidity pool because
12:01 it's inside of a key time window which
12:05 is our London session. In New York, what
12:09 happens? We run our London session high.
12:12 But notice that we fail to close above
12:15 it, right? We also fail to close above
12:16 the consequent encroachment or the
12:19 midpoint of that balanced price range.
12:21 And then look at the bodies here. They
12:23 close well below. This indicates that
12:26 the market is heavy and is likely to
12:29 repric low. Obviously, not everything in
12:31 trading is 100%. Right? So, we're
12:34 assessing probability when we see this.
12:37 And if we couple this with an SMT, which
12:39 you can do your homework on, this gives
12:42 us a solid trade idea. Now, watch what
12:45 happens here. Again, we see the market
12:47 repriced lower.
12:52 It closes below this low here. This leg
12:57 is a leg that raids the London high.
13:01 Then inside of the leg that breaks
13:04 structure, we leave a fair value gap.
13:06 That's super important. Notice the
13:08 overlap of the consequent encroachment
13:12 with that fair value gap. Also overlaps
13:15 with the 50 DRT level. This is how you
13:17 know you have the right dealing range
13:19 when you start seeing a confluence from
13:21 a higher time frame down to a lower time
13:24 frame. Once all of this was set up, I
13:28 was able to take a few entries. So, I
13:31 had an early entry. I'm not sure if you
13:34 can see this clearly, but I had a sell
13:35 entry up here. Now, that's an early
13:37 entry. It's beyond the scope of this
13:39 presentation at least, but I want to
13:41 draw your attention to two more entries
13:44 that I got down here, which was inside
13:47 of this fair value gap, which is over
13:49 here. Now, it's a Tuesday. We have CPI
13:52 later. So you want to be cautious when
13:54 you're placing your stop. Now my stop
13:57 was above the balance price range above
13:59 the market. Now we have to account for
14:02 the fact that we have a fair value gap
14:04 above the market still. So it can easily
14:07 repric into that as we see overhead. But
14:10 notice where the bodies are. That fair
14:13 value gap is preventing it from going
14:15 any higher. Again another strong
14:17 indication that the market here is
14:20 heavy. And then we see the market
14:24 reprice lower again leaving a fair value
14:26 cap. When we are bearish and we're
14:29 assessing algorithmic order flow, these
14:30 are the exact signatures that we want to
14:33 see in price. Now, if you take the
14:35 initial dealing range of this leg and
14:37 you grade it, you'll also note the
14:40 overlap with the 75 DRT, but I'll leave
14:42 that for your homework. The point here
14:45 is when you are trading in line with the
14:47 algorithm and you're constantly
14:49 assessing order flow, which is the whole
14:51 point of algorithmic price action, fair
14:53 value gaps and PDAs are always going to
14:56 overlap with dealing range levels. When
14:58 we're looking for session highs and
15:00 session lows as liquidity reference
15:03 points, and we wait for that liquidity
15:05 to be engaged, every single one of your
15:07 high probability cells will occur after
15:10 that scenario. So, I hope this has been
15:13 insightful. It's not exactly beginner
15:15 friendly. Of course, you need to have
15:16 some sort of understanding with
15:18 algorithmic price delivery, but when you
15:20 really have a solid understanding and
15:23 you compare this model, there's very few
15:25 moving parts. And again, I can get
15:28 incredibly detailed with this, but this
15:30 is a more foundational lesson. The hard
15:33 part is knowing where the market of
15:35 course is going to go, and that's the
15:37 first thing that you should focus on.
15:39 So, I always suggest spending more time
15:41 on the higher time frames. If you want
15:43 more of these type of videos and trade
15:46 breakdowns, then please comment below.
15:48 Make sure you like and subscribe and
15:50 I'll continue making more videos like
