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)

1. Draw the range based on appropriate swing (for accumulation, pull bottom→top from the downtrend; for distribution, top→bottom in uptrends).
2. Confirm the range by price touching equilibrium and satisfying TCT range confirmation rules.
3. Wait for deviation 1 (validate via DL2: price may enter DL2 but must not close beyond DL2).
4. 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)

1. Draw range in the correct trend context.
2. Confirm range via equilibrium touch.
3. Wait for deviation 1 and validate via DL2.
4. Extend range to deviation 2 — form three tabs.
5. Determine if third tab is lower (Model 1) or higher (Model 2) and verify extreme liquidity/demand for Model 2.
6. Draw market structure between tab2/tab3 using the six‑candle rule on the chosen TF.
7. Enter on break back bullish (accumulation) / break back bearish (distribution), ideally inside the original range.
8. Place stop below third tab low / above third tab high.
9. Target the opposite range extreme (or yov high/low for reaccumulation/redistribution).
10. 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.