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ICT Mentorship Core Content - Month 06 - Ideal Swings Conditions For Any Market
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ICT Mentorship Core Content - Month 06 - Ideal Swings Conditions For Any Market

Introduction to Swing Trading

Overview of Swing Trading

  • Swing trading is defined as the discipline of trading predictable price movements in the market with a high degree of consistency.
  • Traders will buy during bullish conditions and sell short during bearish conditions, focusing on intermediate-term trades lasting two weeks or longer.
  • The goal of swing trading is to capitalize on larger entities entering the market, causing significant price displacements.

Potential Rewards and Market Selection

  • Trade objectives can yield considerable rewards, ranging from 200 to 500 pips depending on market setups.
  • Not every market is suitable for swing trading; traders should avoid favorite markets that do not exhibit larger moves throughout the year.
  • Opportunities for swing trading arise approximately every three months, necessitating ongoing investigation into recent market behaviors.

Understanding Market Profiles

Types of Market Profiles

  • Markets transition between different profiles: consolidations (range-bound), trending, and reversal profiles.
  • Trending markets are characterized by large flows; thus, identifying these markets increases the likelihood of successful trades.

Building a Watch List

  • Creating a watch list focused on trending markets enhances setup probabilities when analyzing monthly and weekly charts.
  • Look for price action indicating movement away from consolidation areas; this suggests a shift towards a trending environment.

Institutional Participation and Trade Execution

Importance of Institutional Interest

  • Large flows driven by institutional participants push prices in one direction on higher time frame charts.
  • While setups are identified using monthly and weekly charts, actual trades are executed based on four-hour charts for optimal timing.

Avoiding Range-Bound Markets

  • Markets confined within small ranges indicate low institutional interest; such environments should be avoided for swing trades.
  • A lack of movement out of consolidation signifies neutrality—neither buying nor selling pressure exists.

Maximizing Trade Setups

Identifying High Probability Setups

  • Focus on markets that have recently exited consolidation zones as they reflect strong participation from major players.

Strategic Considerations

  • Be prepared to err in favor of existing trends rather than attempting to predict reversals at market tops or bottoms.

Understanding Long-Term Trading Trends

Importance of Long-Term Trends

  • Focusing on long-term trends allows traders to align their strategies with the market's prevailing direction, increasing the likelihood of successful trades.
  • Analyzing higher timeframes (monthly and weekly charts) helps identify strong directional plays that are likely to continue for at least another month.

Swing Trading Strategy

  • When monthly and weekly indicators suggest a bullish trend, traders should adopt a swing trading approach focused on buying opportunities.
  • Internal conflicts may arise when market signals contradict long-term trends; however, it's crucial to remain committed to the established bias.

Handling Buy Signals

  • Traders should act on buy signals from daily or four-hour charts if supported by monthly and weekly trends, accepting potential losses as part of the process.
  • If multiple buy signals fail in a bullish context, it may indicate an impending shift in market sentiment or trend fatigue.

Embracing Losses and Feedback

  • Accepting losses is essential; they provide valuable feedback about market conditions and help refine trading strategies.
  • Prioritizing trades based on higher timeframe analysis reduces ambiguity regarding market direction and enhances decision-making clarity.

Analyzing Market Profiles: Euro vs. Kiwi

Euro Dollar Analysis

  • The euro dollar chart shows consolidation patterns indicating indecision in price movement since February 2015.
  • This consolidation suggests low probability for profitable trades as the market exhibits reluctance to break out of its range.

Weekly Chart Insights

  • The weekly chart reinforces the consolidation theme, highlighting tight ranges that limit effective swing trading opportunities.
  • Successful swing trading typically requires trending markets rather than those stuck in consolidation phases.

Kiwi Dollar Comparison

  • In contrast, the kiwi versus dollar chart displays clear upward momentum with higher highs and lows, indicating a strong bullish trend.

Analysis of Currency Pairs and Swing Trading Opportunities

Weekly Price Action Overview

  • The analysis begins with a review of a currency pair on a weekly basis, highlighting successive higher highs and higher lows, indicating strong buyer interest in the market.

Dollar vs. Japanese Yen Insights

  • A monthly chart of the dollar versus the Japanese yen shows price action within a consolidation phase that abruptly breaks out, suggesting potential trading opportunities.

Consolidation Patterns and Swing Trades

  • On the weekly timeframe, after leaving consolidation, the price moves several hundred pips higher, signaling favorable conditions for swing trades on the long side.

New Zealand Dollar Analysis

  • The focus shifts back to the New Zealand dollar against the dollar index; unlike the euro-dollar pair's long-term consolidation, this pair shows bullish behavior with consistent higher highs and lows.

Monthly Chart Breakdown

  • A detailed breakdown of price action is presented using vertical lines to represent each month. This visual aids in identifying patterns over three-month intervals for potential buying opportunities.

Identifying Buying Opportunities

  • Every three to four months presents retracement followed by buying opportunities. Observing these patterns can help traders identify when to enter positions effectively.

Daily Chart Examination

  • Transitioning to a daily chart allows for closer examination of price movements. An upcoming live session will focus on studying these patterns further as part of mentorship homework.

Homework Assignment for Traders

  • Participants are encouraged to analyze specific areas where prices retraced before providing buying opportunities. This exercise aims to enhance understanding of swing trading dynamics.

Evaluating Trade Duration and Direction

  • Emphasis is placed on recognizing how long trades should be held (approximately two weeks or longer), which aligns with swing trading strategies focused on high probability directional trades.

Importance of Discount Levels

  • Traders are advised to consider discount levels when entering trades. Understanding where sell stops are located can provide insights into optimal entry points during retracements.

Long-Term Position Trading Considerations

  • The discussion includes reflections on long-term position trading strategies that align with recent content covered in January’s sessions, emphasizing classification of ideal entry points based on market structure.

Understanding Buyer Mentality

Aligning with Market Sentiment

  • The speaker emphasizes the importance of adopting a buyer's mentality when analyzing market trends, particularly in bearish conditions on monthly and weekly charts.
  • They highlight the necessity of utilizing all available tools to identify potential selling scenarios that align with this bearish outlook.
  • The discussion indicates a strategic approach where understanding market sentiment is crucial for making informed trading decisions.
Playlists: 2017 ICT Private Mentorship Core Content Month 06
Video description

2017 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in February 2017. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN Trading performance displayed herein is hypothetical. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person’s investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action. Past performance does not guarantee future results. Simulated performance results contain inherent limitations. Unlike actual performance records the results may under or over compensate for such factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses to those shown. The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit move.” The placement of contingent orders by you, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.