Stages of the MMBM

1. The Logic Behind the Model: Engineering Liquidity

Before we break down the stages, it's essential to understand why the MMBM pattern forms. It's not a random sequence of price swings; it's a deliberate process by institutional players to engineer liquidity.

During the initial phase of the model, price is driven down in a way that encourages retail traders to sell. As these traders enter short positions, they place their stop-loss orders (which are buy orders) above recent swing highs. This process creates a large pool of buy-side liquidity (BSL). The Market Maker Model is the process by which smart money accumulates positions at low prices and then drives the market up to trigger those buy-stops, allowing them to exit their positions at a profit.

This first video explains this core concept of engineering liquidity.

2. The Anatomy of a Market Maker Buy Model (MMBM)

Now, let's break down the MMBM into its distinct, identifiable stages. This model provides a roadmap for a complete price cycle, from consolidation to a major trend reversal and expansion.

The Stages:

1. Original Consolidation: The model begins with a period of price consolidation or ranging. Liquidity is building above the range highs and below the range lows.

2. The Sell-Side of the Curve: Price breaks out of the consolidation to the downside. It begins creating a series of lower highs and lower lows. This is the liquidity engineering phase we just discussed. In some terminologies, this is also called the distribution phase.

3. The Smart Money Reversal (SMR): This is the crucial turning point at the bottom of the model. It's not just a single point, but a sequence of events:

   • Price raids a significant pool of sell-side liquidity (SSL), often by running a key low on a higher timeframe (e.g., a previous day's or week's low).
   • This is where you'll often spot a bullish SMT divergence between correlated assets, confirming that the move down is a stop hunt, not a true breakdown.
   • The reversal is confirmed when price moves up with displacement, creating a Market Structure Shift (MSS) or Change of Character (ChoCH). This strong upward move typically leaves behind a Fair Value Gap (FVG).

4. The Buy-Side of the Curve: After the SMR, price enters an expansionary phase to the upside. This phase also has sub-stages that offer potential entry opportunities:

   • Low-Risk Buy: The first opportunity comes when price retraces into the FVG created during the SMR.
   • First Stage of Accumulation: After the initial impulse up, price will make another retracement, often to a new FVG or bullish order block, offering a second entry.
   • Re-accumulation: As the trend continues, further retracements create more accumulation opportunities before the final target is reached. One of the key ICT setups you were interested in, the Silver Bullet, often appears in this re-accumulation phase.

5. Targeting Liquidity: The ultimate objective of the MMBM is to run the buy-side liquidity that was engineered on the way down. The primary target is the high of the Original Consolidation.

The following video provides an excellent summary of all these stages in sequence.

3. Seeing the MMBM on a Real Chart

Recognizing these stages on a clean schematic is one thing; spotting them in the chaos of a live chart is the real skill. Let's look at a practical application to see how the theoretical model translates to reality.

4. Consolidating the Concepts

To reinforce your understanding, let's review a textual resource that provides a clear, concise summary of the MMBM components. This will be a useful reference for you to come back to.

Conclusion

You have now learned to deconstruct one of ICT's most comprehensive trading models. By understanding the MMBM, you can move beyond looking for individual signals like FVGs or order blocks and start reading the broader narrative of the market. You can anticipate where price is likely to go by understanding what liquidity it has engineered and where its ultimate target lies.

Key Takeaways:

• The MMBM is a price template that illustrates how smart money accumulates long positions and engineers liquidity.
• The key stages are: Original Consolidation, the Sell-Side Curve (to engineer BSL), the Smart Money Reversal (often confirmed by SMT and an MSS), the Buy-Side Curve (with low-risk buy and accumulation phases), and the final Liquidity Hunt.
• The model is fractal, meaning it can appear on any timeframe, from monthly charts down to 1-minute charts.
• Being able to identify the current stage of an MMBM gives you a powerful directional bias.

Preview for the Next Lesson:
Now that you can identify the stages of the MMBM, the next logical step is to learn how to trade it effectively. In our next lesson, we will formulate a trade plan for executing a trade based on the MMBM. We will define precise rules for entry, stop-loss placement, and profit targets for the various opportunities that arise within the model. We will also briefly introduce the inverse pattern: the Market Maker Sell Model (MMSM).