What is a CISD?

A CISD is technically a variation of an Order Block that is used as a confirmation signal for reversal moves.

A CISD is used to signal when the market’s price action has impulsively switched in direction, from either bullish to bearish, or bearish to bullish. And they’re most commonly used as a confirmation signal for when the market has switched direction after attacking a key level.

Bullish CISD

A Bullish CISD is created when the market has been downtrending, before it then impulsively pushes up and engulfs the the most recent bearish leg.

A valid Bullish CISD is only confirmed once the price has pushed up and closed past the open of the latest bearish series of candles (or singular bearish candle).

The specific criteria for what differentiates a Bullish CISD from a regular Bullish Order Block is that it occurs after the market has been moving in an downtrending structure, signalling that the downtrend may be transitioning into bullish market structure.

In simple terms, a Bullish CISD signals a shift from the market delivering price lower, to delivering price higher (Bearish to Bullish).

Bullish CISD

A Bearish CISD is created when the market has been uptrending, before it then impulsively pushes down and engulfs the most recent bullish leg.

A valid Bearish CISD is only confirmed once the price has pushed down and closed past the open of the latest bullish series of candles (or singular bullish candle).

The specific criteria for what differentiates a Bearish CISD from a regular Bearish Order Block is that it occurs after the market has been moving in an uptrending structure, signalling that the uptrend may be transitioning into bearish market structure.

In simple terms, a Bearish CISD signals a shift from the market delivering price higher, to delivering price lower (Bullish to Bearish).

What makes a CISD 'High Probability'?

CISDs are used as a way of determining when the direction of the market's price action is reversing. Either from Bullish to Bearish, or Bearish to Bullish.

This means that we want to only consider using a CISD as a reversal signal when price has reached a significant level or area where a reversal is most likely to happen.

These areas are either higher timeframe External Range Liquidity levels, or higher timeframe Fair Value Gaps.

If a lower timeframe CISD occurs after price has hit one of these types of PD Arrays, this is when we can consider the CISD signal as a higher probability signal, when compared to a lower probability CISD that hasn't occurred after interacting with a PD Array.

CISD after High Timeframe Liquidity Sweep

After a Liquidity level is hit, it can either continue pushing further in the same direction (Liquidity Run), or it can reverse in direction (Liquidity Sweep).

One of the easiest methods for determining whether price has swept a Liquidity level is by looking into the lower timeframes to see whether a CISD confirmation has formed.

The best method for deciding which timeframes to use for CISD confirmations is through Timeframe Alignment Paring.

For example, if price has hit a 1 Hour Swing High (External Range High) and has then retraced with a large upper wick, we can then move down to the 5 Minute chart to look for the reversal confirmation in the form of a Bearish 5 Minute CISD.

CISD after High Timeframe FVG Mitigation

Another method for using CISDs is for confirming whether a higher timeframe Fair Value Gap has been respected.

For example, when the market touches a higher timeframe Bullish FVG, we can go down to the lower timeframes to look for a Bullish CISD confirmation.

So again using Timeframe Alignment, if we had a Bullish 1 Hour FVG that has been hit, we can go down to the 5 Minute chart to look for a Bullish 5 Minute CISD formation, which would confirm that the Bullish 1 Hour FVG is currently being respected because of the shift from bearish to bullish price delivery.