Change in State of Delivery (CISD)

Introduction to Change in State of Delivery (CISD)

The Change in State of Delivery (CISD) is a concept in price action trading that indicates a potential shift in market structure. It typically occurs after a liquidity sweep, where price hunts for liquidity (stop-loss orders) before reversing direction. The CISD is identified when the body of a new candle closes above or below the opening price of the previous candle, signifying a change in the order flow.

Key Components in the Chart:

1. Liquidity Sweep:
   • A liquidity grab occurs when the price temporarily moves below/above a key level to trigger stop losses before reversing.
2. Order Block & Fair Value Gap (FVG):
   • After the liquidity sweep, price often forms an order block, which is a region where price accumulates before moving aggressively.
   • A Fair Value Gap (FVG) is created when there is an imbalance (a large displacement in price with little to no retracement).
3. Confirmation of CISD:
   • A strong bullish or bearish candle closing past the opening of the previous candle confirms the CISD.
   • This signals a potential trend reversal or continuation.

Trade Setup Idea for CISD Strategy:

1. Identifying a Setup:

• Look for key liquidity zones where stop-losses might be placed (e.g., above resistance or below support).
• Wait for a liquidity sweep (a wick piercing key levels).
• Look for a strong displacement candle closing past the previous candle’s open.

2. Entry:

• Aggressive Entry: Enter immediately after CISD confirmation.
• Conservative Entry: Wait for a retracement to the FVG or Order Block before entering.

3. Stop Loss & Target:

• Stop Loss: Below/above the liquidity sweep wick.
• Take Profit:
  • First target at recent market structure highs/lows.
  • Extend target if price structure confirms trend continuation.

Conclusion:

The CISD strategy is useful for spotting trend reversals and strong momentum shifts in the market. By combining liquidity sweeps, fair value gaps, and order blocks, traders can enhance their probability of executing high-probability trades.