Summary of "TCT mentorship - Lecture 5A | TCT schematics"
Overview
This lecture explains TCT schematics — a simplified, tradable adaptation of Wyckoff-style accumulation/distribution schematics. Focus areas include range-based supply/demand, liquidity grabs (deviations), confirmation triggers, entries, stops, targets, multi-timeframe structure, and the market‑maker mechanics behind why ranges reverse or continue.
Applicable instruments
- Concepts apply to stocks, ETFs, crypto, FX, or any traded instrument where order blocks, demand/supply zones, and market‑maker liquidity dynamics are relevant.
- No specific tickers or sectors were referenced.
Key concepts and terminology
- Range formation
- Range high / Range low
- Equilibrium (midpoint)
- Accumulation vs reaccumulation
- Accumulation: downtrend → range that breaks up (reversal).
- Reaccumulation: uptrend → range that breaks up (continuation).
- Distribution vs redistribution
- Distribution: uptrend → range that breaks down (reversal).
- Redistribution: downtrend → range that breaks down (continuation).
- Deviation
- A sweep of the range high or low (deviation 1, deviation 2).
- TCT schematic is always a three‑tab model: tab1, tab2, tab3.
- DL2
- Deviation rule boundary: price may enter DL2 but must not close beyond it for a valid deviation.
- Extreme liquidity
- The last liquidity point remaining before taking the range extreme; often the first market‑structure low/high after applying the six‑candle rule.
- Extreme demand / extreme supply
- The last order block or zone protecting the range extreme; commonly found near the extreme discount (roughly the last ~25% of the range).
- Six‑candle rule
- Used to validate market‑structure pivots on each tab.
- Overlapping market structure / multi‑TF colors
- Example color coding: black = higher TF, red = mid TF, blue = lower TF.
- Lower‑TF entries are possible, but higher‑TF confirmation can overrule them.
TCT schematics: general method (both accumulation and distribution)
- Draw the range based on appropriate swing (for accumulation, pull bottom→top from the downtrend; for distribution, top→bottom in uptrends).
- Confirm the range by price touching equilibrium and satisfying TCT range confirmation rules.
- Wait for deviation 1 (validate via DL2: price may enter DL2 but must not close beyond DL2).
- Extend the range extreme to the new deviation and wait for deviation 2 — forming three tabs in total (tab1, tab2, tab3).
TCT Model 1 (Accumulation — mirror for Distribution)
- Pattern
- Range low → deviation 1 (lower) → deviation 2 (lower). Each deviation is lower than the previous for accumulation.
- Confirmation
- Monitor market structure from the highest point between tab2 and tab3 down to the third tab low.
- Entry
- Enter long when structure breaks back bullish (preferably the break occurs inside the original range).
- Stop loss
- Place stop below the third tab low.
- Target
- Opposite range extreme (Range High). Any extension beyond is contextual upside.
TCT Model 2 (Accumulation — mirror for Distribution)
- Pattern
- Range low → deviation 1 → third tab is a higher low (not a lower low).
- Third tab requirements (one or both):
- Grab extreme liquidity (often the first market‑structure low after six‑candle rule), or
- Mitigate extreme demand (order block/demand zone near extreme discount).
- Confirmation/Entry/Stops/Targets
- Use same confirmation method as Model 1 (watch highest point between tab2/tab3 to third tab low; wait for break back bullish).
- Entry on break; stop below third tab low; target = Range High.
Distribution models (Model 1 & Model 2)
- Mirror the accumulation rules in reverse:
- Pull range top→bottom for uptrend context.
- Use deviation highs instead of lows.
- Model 1 (distribution)
- Two deviations higher than previous; confirm structure from the lowest point between tab2/tab3 up to third tab high.
- Enter short on break back bearish; stop above third tab high; target = Range Low.
- Model 2 (distribution)
- Third tab must be a lower high that grabs extreme liquidity or mitigates extreme supply; same confirmation/entry/stop/target logic.
Market‑structure and timeframe rules
- Validity by TF
- A TCT schematic is only valid on a timeframe where you can draw market structure using the six‑candle rule on each tab.
- Example: if MS can be drawn on the 45‑minute but not the 1‑hour chart, the schematic is a 45‑minute schematic.
- Low‑TF exceptions
- On 1/2/3‑minute charts, the six‑candle strictness may be relaxed if a significant pivot is visually obvious.
- Prefer entries
- Breaks of structure that occur inside the original range bounds are less risky than breaks outside the range.
- Multi‑TF awareness
- Lower‑TF entries can improve R:R, but overlapping breaks that do not confirm on higher TFs can be false.
Liquidity and order‑block guidance
- Extreme discount area
- The last ~25% of the range near the Range Low is a common place to find extreme demand zones for Model‑2 accumulation.
- Use of order blocks
- Use prior structure order blocks (demand/supply) as validators for extreme demand/supply.
- Match the demand/supply zone scale to the range timeframe; avoid over‑refining based on higher TFs.
Targets, stops, and risk/reward
- Stop placement
- Accumulation: stop below third tab low.
- Distribution: stop above third tab high.
- Target (TCT technical target)
- Opposite range extreme (Range High for accumulation; Range Low for distribution).
- For reaccumulation/redistribution, use the yov high/yov low (highest/lowest point of the Wyckoff schematic) if it differs from the local range extreme.
- Example R:R
- Mid‑TF (red) entry in lecture produced roughly ~2.75:1 R:R versus ~1:1 if waiting for higher‑TF (black) confirmation.
- Trading principle
- Enter on confirmed structure breaks rather than trading on expectations.
Practical cautions, failure modes, and trade management
- Model‑2 flip risk
- A Model‑2 trade can “flip” into Model‑1 when remaining liquidity/supply above the range still needs mitigation — a common source of loss.
- Don’t trade anticipation
- Wait for confirmed structure breaks and rule adherence.
- Multi‑TF conflicts
- Respect higher‑TF confirmation; lower‑TF breaks that fail on higher TF may be fake.
- Typical losses
- Losses often stem from assuming Model‑2 when price later forms Model‑1.
- Execution & psychology
- Trade management, execution, and psychology were noted as part of broader mentorship material.
Procedural checklist (short)
- Draw range in the correct trend context.
- Confirm range via equilibrium touch.
- Wait for deviation 1 and validate via DL2.
- Extend range to deviation 2 — form three tabs.
- Determine if third tab is lower (Model 1) or higher (Model 2) and verify extreme liquidity/demand for Model 2.
- Draw market structure between tab2/tab3 using the six‑candle rule on the chosen TF.
- Enter on break back bullish (accumulation) / break back bearish (distribution), ideally inside the original range.
- Place stop below third tab low / above third tab high.
- Target the opposite range extreme (or yov high/low for reaccumulation/redistribution).
- Monitor higher TF structure and manage if schematic flips models.
Explicit numeric / rule callouts
- TCT schematic = three‑tab model (tab1, tab2, tab3).
- Deviation validation: must not close beyond DL2.
- Extreme discount ≈ last 25% of the range low area (common for extreme demand).
- Six‑candle rule: used to validate market‑structure pivots (exceptions allowed on very low TFs).
- Example R:R: ~2.75:1 on mid‑TF entry vs ~1:1 on higher‑TF entry (from lecture example).
Sources and presenter
- Instructor: unnamed TCT mentorship presenter (video).
- Primary referenced theory: Richard Wyckoff (referred to in the transcript as “Richard wov”); TCT positions itself as a simplified, tradable adaptation of Wyckoff concepts.
Notes
- The transcript contained instructional trading methodology and risk management guidance but did not include a formal legal or financial-disclaimer statement.
Category
Finance
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