Delivery - Phases

————-- 001 - Three Phases

Before we dive into the topics of delivery, it's important to understand a few key terms as followed.

Expansion -> This, in simple terms implies a fast, momentum-drive move from one point of interest, POI.

With aggressive moves, it gives us more of a clear direction of where the market wants to go. Instead of trying to guess where price is going to and wanting to see that expansion, we want to wait for an expansion. After that it will either give us an retracement, consolidation or reversal. But we always wait for that expansion first.

Retracement -> This is where price moves back inside of a created range, after having created a high/low.

Usually, after a strong price run in either direction ( expansion ), price will leave behind displacements, liquidity voids. With a retracement, it entails that price will move back to one of these in a recently created price range. Our goal is to be able to identify where price could retrace to, in order to build that narrative.

Reversal -> This is where price reaches a certain level/area and then moves in the opposite direction.

For price to reverse it has to run... read that one again. It's the most simple way of putting it, and it will hit a lot arder after time goes by. So this entails that when we see a strong move, there must have been a liquidity pool that has been taken out prior to that. (old highs/lows), and we can then expect price to move in a new direction.

So these three are like a vicious spiral.

**Expansion -> Retracement -> Reversal** ( E.R.R )

————-- 002 - Examples

Lets look at EURUSD on H1 - Here we have that entire vicious spiral play out.

Expansion -> Retracement -> Reversal

Notice how the range changes from high, to targeted buyside liquidity ;)

Expansion:

Retracement

Reversal

————-- 003 - Sync between ERR

It might be a little confusing so far...

Lets clear it up for one second.

So essentially price moves in waves as we mentioned. Expansions and retracements. That's the ground rule. But every next expansion with your bias will be a reversal.

See the picture below, completely annotated. You'll come back to this pictures once more of the puzzle pieces are connected, but notice how the low of the first expansion becomes the target for the potential short after the second retracement we had.

Essential both the 2nd and the 3rd expansion mentioned above are considered reversals, as they reverse from the retracement.

Dont get too caught up in this though, it's to be compared with the square and rectangle rule. A square is a rectangle, but a rectangle is not a square

A reversal is always an expansion, but not every expansion will be a reversal.