Quarterly theory. Is this the HACK of the algorithm?

Summary

The video, created by 5dUniverse Trading, delves into the 'quarterly theory' and its supposed hack of trading algorithms. The presenter explains a trading concept involving analyzing years in quarters, mirroring the market behavior with phases: accumulation, manipulation, distribution, and a final movement, either reversal or continuation. This fractal theory applies to multiple time frames, from years down to minutes, even influencing daily trading sessions. By identifying two major market profiles, AMDX or XAMD, traders can optimize their buying and selling points. The video suggests that understanding these phases can dramatically improve trading effectiveness.

Highlights

• The quarterly theory is a potential hack for trading algorithms based on market cycles. 🔍
• Concept visualizes market behavior as recurring phases: accumulation, manipulation, distribution. 🌀
• Fractal patterns mean these theories can apply on yearly, monthly, weekly, even daily charts! 📊
• Profiles AMDX and XAMD help define market movement and guide trading strategies. 📘
• Believers think this concept is the key to never losing money in trading ever again. 💰

Key Takeaways

• Discover the 'Quarterly Theory' to optimize your trading strategy! 📈
• Learn to see market trends as fractal and cyclical, repeating in all time frames. 🔄
• Master the AMDX and XAMD profiles to align your trades with market movements! 💡
• Trade smarter by identifying key phases: accumulation, manipulation, and distribution. 🎯
• Envision the market in quarters to anticipate high and low points of the week! 📆

Overview

Imagine mastering the trade market with a theory that simplifies algorithms into comprehensible patterns? That's what the 'Quarterly Theory' claims to do. This approach involves examining the market by breaking down the year into quarters and observing the cyclical repetition of phases such as accumulation, manipulation, distribution, and final movements. The beauty of this theory is its fractal nature; it applies across different time frames, making it versatile for diverse trading strategies.

The concept hinges on recognizing two main market profiles: AMDX and XAMD, which dictate the flow of price action. Understanding these profiles allows traders to pinpoint when to enter or exit trades, supposedly reducing risk and maximizing potential gains. The presenter emphasizes the power of knowing which part of the trading phase—be it accumulation, manipulation, or distribution—you are engaging with, claiming that this insight is the "hack" to trading success.

While the theory is still under investigation by its proponents, it promises a new way of interpreting market dynamics, potentially revolutionizing personal trading methods. The video encourages backtesting this theory and exploring further resources from other trader enthusiasts who are also experimenting with this approach. Combined with a supportive community, this knowledge aims to empower traders with enhanced skills for achieving financial autonomy.

Chapters

• 00:00 - 00:30: Introduction to ICT's Quarterly Theory The introduction provides an overview of the Interest Rate Quarterly Theory (ICT), highlighting the intriguing aspect of viewing the year in quarters. It suggests that each quarter exhibits specific, predictable patterns influenced by algorithmic behavior, as explained by a proficient trader friend.
• 00:30 - 02:00: Explaining the Algorithm Hack Concept The chapter titled 'Explaining the Algorithm Hack Concept' discusses a method referred to as the 'hack of the algorithm.' The speaker mentions that this approach is applicable across all time frames including yearly, monthly, and weekly, and promises to delve into it further to provide a comprehensive explanation. The speaker refers to some information conveyed through posts and mentions looking at quarterly shifts fractally as part of this algorithm hack.
• 02:00 - 04:00: Application of Quarterly Theory on Charts The chapter explains the application of ICT's concept of "the power of three" in analyzing price action on charts. It describes how price action can be broken down into three phases: accumulation (or consolidation), manipulation (often referred to as the 'Judo swing'), and distribution. The chapter emphasizes understanding these phases and the transitions between them, which form a critical part of technical analysis using this theory.
• 04:00 - 05:00: Fractal Nature of the Theory The chapter titled 'Fractal Nature of the Theory' explores the concept of market phases, particularly focusing on the distribution phase where trading is emphasized. It introduces the idea that trading patterns like weekly profiles often dictate trading behaviors. For example, Mondays are typically consolidation periods, while Tuesdays are prone to manipulation, during which the weekly high or low often occurs—about 70% of the time. The chapter underlines the fractal nature of these occurrences, suggesting that similar patterns appear over different time frames, such as annually or monthly.
• 05:00 - 09:00: Example with Real Trading Scenario In this chapter, the discussion revolves around a practical trading scenario, highlighting the various timeframes wherein changes occur, such as weekly, daily, and session intervals. The focus of the chapter is on a trading strategy known as the 'quarterly theory.' This theory involves three key stages: accumulation, where assets build up; manipulation, where market perceptions might be influenced; and distribution, where assets are released into the market. This strategy is presented as a 'hack' that can potentially enhance the skill set of a trader. The chapter appears to advise leveraging this theory to improve trading outcomes and enhance the understanding of market movements.
• 09:00 - 11:00: Conclusion and Community Invitation The conclusion reiterates the concept of distribution trends with two possible profiles, AMDX or XAMD. Understanding these profiles aids in making informed investment decisions. The chapter invites the community to master these profiles for better market entry points.

Quarterly theory. Is this the HACK of the algorithm? Transcription

• 00:00 - 00:30 let me take you into something I really find mind-blowing a few months ago a friend of mine that's a really good Trader was looking into some concepts of ICT and ICT spoke about how you can see the year into quarters right so we have like this seasonal stuff so the first quarter of the Year second third fourth and how they have a tendency to move in a certain way because of the algorithm so the friend
• 00:30 - 01:00 of mine and let me um grab the posts he sent me he said you can also look at quarterly shifts fractally and I will dive into it and explain everything to you but I think this is the hack of the algorithm so this is something you can see on all time frames so the yearly monthly weekly stuff like
• 01:00 - 01:30 that so let me explain ICT always talks about that you can look at Price action in a form of accumulating price like consolidation phase then a manipulation phase and then Distributing right so if we uh speaks about the Judo swing that's the manipulation phase and then the distribution phase so he is always talking about the power of three concept right so the consolidation manipulation
• 01:30 - 02:00 and then the Distributing and the the distribution phase is the phase where you want to trade right so that's also where his weekly profiles come from Mostly that's why it doesn't trade Like Mondays most of the times that's consolidation quarter of the week then on Tuesday there's a quarter with manipulation so in 70 of the times that's when the high of the week or the low of the week is made right so it's a concept that's fractal it happens over the year it happens over the months it
• 02:00 - 02:30 happened over the week it happens over the day and it happens over the session so when we dive into it let me explain you a little bit more on how I think this hack can really help you become a better Trader right so the quarterly theory is nothing else but this profile accumulation manipulation distribution
• 02:30 - 03:00 and then a fourth quarter which can be a reversal or a continuation of this distribute this distribution Trend right there are only two profiles possible it's either amdx or it's xamd and once you know how to identify these two profiles it becomes really easy to get in on the right
• 03:00 - 03:30 a part of the price action and of course timing in the market so it's either amdx or it's X AMD and I will show you loads of examples in a minute and that means in like the the ICT terms the accumulation phase is most times the consolidation phase the manipulation phase is the Judas wing the distribution phase is the low
• 03:30 - 04:00 resistance liquidity run he always talks about getting on the low resistance liquidity runs but how to identify them right and the fourth quarter is a reversal of this run or a continuation in the same direction of this run so when we apply this to the charts and first I want to take it to the chart of the dollar let me remove this
• 04:00 - 04:30 over here we have the dollar chart and I'm on the weekly chart first I want to take you in a high time frame then I'm going to show you how you can trade this intraday and show you a setup where you could have played it just set up from last week on GBP USD so when we have this chart what happens if I place
• 04:30 - 05:00 a quarterly vertical line on the chart that are these lines these lines represent three months each so when we look at this year this was January until April until June uh July and then here's October so these
• 05:00 - 05:30 are quarters of the year what if we apply the theory on it what would it look like and I placed and I will start maybe here to show you some examples so this was the end of 2009 so the start of 2020 right it's also the March Corona stuff I
• 05:30 - 06:00 guess so what you see over here is an accumulation phase then the manipulation face up and then it starts to distribute retrace a bit and then continue in the X the manipulation is a little bit before April but it doesn't matter it's this is accumulation manipulation up distribute Distributing
• 06:00 - 06:30 price down little retracement and then continuing in the same direction and that was all 2020 so this had a amdx profile when we go to 2021 look at this we have the accumulation phase then the manipulation and what does the manipulation phase do it takes out liquidity and what do I mean by that it
• 06:30 - 07:00 takes out this liquidity and then it starts rallying so it's Distributing and then continuing we go to 2022 this year has a different profile this is X AMD so we have ax still continuation of the trend then a consolidation phase where we
• 07:00 - 07:30 start going up and down and up and down and then it starts manipulating massively up and distributing down that was the last phase of 2022. this year I see this profile happening we have an X so it's reversing and then accumulating and it manipulated down
• 07:30 - 08:00 in July and I expect a distribution of its also conform all my analysis that we will visit this box let me just turn on my yeah that was the Box this is a monthly fair value Gap monthly order block I think we will go up there and it it also um fits into the profile of the year
• 08:00 - 08:30 so this is the X this is the A and now we're manipulating down we took out all this liquidity everybody was thinking we were going to go down more but no it's just a manipulation phase of the cycle and now we're Distributing up and we're gonna end up somewhere around here probably for the the rest of the year so the great part is this is fractal
• 08:30 - 09:00 Theory so what happens on the yearly also happens within a month so the first week of the month is either a accumulation profile or a reversal continuation of the previous cycle so it's either a A or ax so it's up to you to decipher what is the manipulation phase because after that comes the distribution and that's what you want to trade all right so
• 09:00 - 09:30 within a week you can also that's why ICT always says don't trade on Mondays or it's less likely to find a good setup on Monday of course you can scalp if you're good at it stuff like that but if you want to trade the weekly profile on the weekly expansion phase then you have to wait until like at least Tuesday when a manipulation is over but maybe the manipulation even happens on the Wednesday if it's an xamd profile right but it also happens within a day and now
• 09:30 - 10:00 that's where it becomes interesting because we can divide the day into four quarters of six hours so we have four quarters of six hours and let me tell you how this works I'm gonna go to GBP USD I have a little indicator set up on a
• 10:00 - 10:30 chart that just simply let me see which quarter is what because how do the quarters in a day work it's relatively simple midnight New York time is the start of a quarter so I'm on the -4 New York time chart and if I go to the 12 am time that is the start of a quarter and then it's in total that first
• 10:30 - 11:00 quarter of the day is in total six hours but now it becomes interesting those six hours you can also divide into quarters so everything's fractal and you can also divide a quarter into a quarter and quarter inches so if you want you can go to the seconds chart but don't do that so when we apply that theory this is where ICT came up with this kill
• 11:00 - 11:30 zones right because if the London session if we take the London session as six hours from noon uh is it noon no that's not noon it's hard for me to start in am and p.m because we have a 24 hour clock right so midnight to 6 A.M is our older quarters where London happens then from 6 a.m to 12. noon
• 11:30 - 12:00 is where the am session of New York is happening then from 12 to 6 is PM session New York and then from 6 to midnight again is the Asian session so if you divide it into four quarters of six hours those are the big sessions and now this is where it becomes really really nice that ICT based his skill zones on these
• 12:00 - 12:30 quarters because zones are from two to five so it starts somewhere around in this manipulation phase and then this into the distribution phase right so he always says find your entry within the kill zones that is exactly where they're at so now it becomes really really cool if you look at this right this was a GBP USD last week on the Friday September 8th uh yeah that's
• 12:30 - 13:00 correct Friday September 8th what happened what you want with a manipulation phase is that it takes out liquidity then it's at least a manipulation you can trust on entering so if I zoom out a bit what you can see over here is that GBP USD took out a really significant High so this was by side that was taken out
• 13:00 - 13:30 during the London manipulation phase so we had some buy side over here and when I go back to the five minutes what you can see is this this is consolidating right it's just going up and down up and down and now it's manipulating taking out their buy side and what's important is that you have the daily bias right so my daily bias was still we're looking for shorts
• 13:30 - 14:00 dollars is coming up higher so with taking out this massive buy side and knowing that it's in the second quarter where it's manipulating it's not very likely that it will go up higher because my bias is bearish and I have all these components in in place right now so the only thing I have to do right now is wait for a displacement so wait for a break of structure happening so to take out a swing low
• 14:00 - 14:30 and that's what it did over here so we're still in London Kill Zone it manipulated up took the buy side we're in the second quarter it displays down right now and create it and really nice fair value Gap with the displacement so how can you trade this just enter on the fair value Gap that constant displacement place your stop
• 14:30 - 15:00 above the highs or even above the fair value Gap but if you want to be safe just place it above the high take a one to two and you see it's consolidating manipulating and starting the distribution phase right so this distribution is going up
• 15:00 - 15:30 and now it starts to reverse back down to continue the trend and finally it took to take profit so as you can see over here you could have traded this with the quart quarterly theory in mind it's what icts teaches right the Judo swing and then you can enter on the fair value Gap with the displacement but if you keep the quarterly theory in mind it's a lot easier to Define where
• 15:30 - 16:00 you want to enter so I think this is the algorithm hack so but I'm still doing research on this it's still for me like finding out what I can use and what not and when it's more likely to happen and stuff like that but test it out just back test it see if you can can see the amdx or the X AMD profiles and also one tip I recently
• 16:00 - 16:30 found out found out like two weeks ago that besides the friend of mine someone else is also talking about this and let me show you it's yeah he's called uh day and he talks about it on his Twitter so if you want to learn more about this watch History or is Twitter uh tweet feet Twitter X I don't know what it's called lately uh you can follow that but let me know what you think about this because I
• 16:30 - 17:00 think it's the algorithm hack and you never have to lose money again so let me know what you think about this uh maybe show some charts join me in my own Discord Community if you want to learn more about this one because I'm gonna share more about this my findings and stuff like that and how how I can trade this I will also add it to my course but for now I'm still in the investigation phase and just testing and testing and have been doing that since May when my friend pointed this out to me so let me
• 17:00 - 17:30 know what you think of this and maybe I'll see you in my community maybe you will watch some strategies I already put on the channel and I really recommend watching my lbs strategy because I think that's a really really really really profitable strategy it's just for free out there on my YouTube but if you want to trade with me join my Discord it's a really small price for the first 50 members right now I just launched it Friday so it's fresh and clean and I'm really looking forward to helping people there become more profitable and more Sovereign Trader
• 17:30 - 18:00 rights because you just want to create a life that works for you and where you feel good in and you have the financial freedom and also have this skill set that people can never take away from you right so that is my goal with the community and I hope you have a really good day and see you in the next video bye bye