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ICT Mentorship Core Content - Month 12 - Short Term Top Down Analysis
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ICT Mentorship Core Content - Month 12 - Short Term Top Down Analysis

Introduction

The instructor introduces the lesson and explains that this is his personal approach to trading.

  • The instructor emphasizes that this is not the only way to trade.
  • He explains that he has gone through all the information himself over the last 20 plus years and this is his personal approach to doing so.
  • The instructor states that he will be focusing on short-term top-down analysis for intraday trading in the next two lessons.

Approach to Trading

The instructor discusses his approach to trading and how he uses high time frame bias relative to previous teachings.

  • The instructor emphasizes that he does not do anything additional once he arrives at his high time frame bias relative to previous teachings.
  • He explains that everything is fractal, meaning he looks for conditions or biases long term, then looks for a stage or setup in a lower time frame, and executes with a similar pattern in mind.
  • The instructor notes that smart money doesn't trade every single day but waits for specific setups, conditions, and levels they have already determined and arrived at for fair value.

Intraday Top Down Analysis

The instructor provides an overview of what will be covered in this presentation.

  • The focus of this presentation is to determine the impact of the daily perspective on a given asset or market, identify directional bias for higher time frame daily chart, classify PD arrays accurately to assist in key levels, and complete an institutional analysis on a daily basis.

Daily Time Frame Perspective

The instructor discusses how he starts his perspective from the daily time frame by looking at what smart money is doing.

  • He notes that all assets can be looked upon using COT data (for example, if trading S&P).
  • He gets the highest high and lowest low of the range of their net position to create his own zero line, where above it is bullish and below it is bearish.

Trading Process Overview

In this section, the speaker provides an overview of his trading process and the factors he considers before making a trade.

Factors Considered Before Making a Trade

  • The speaker looks at open interest to support or negate his trade.
  • Institutional order flow is considered on a daily timeframe to determine what institutions are doing. Sponsorship behind price action is ideal for high probability setups.
  • The speaker tries to determine what weekly profile is most likely going to unfold using the economic calendar. If he can't arrive at that, he goes with his best assumptions and refers back to the economic calendar later in the week to correct them.
  • Intermarket analysis is used by looking at relationships between correlated pairs or assets. Divergences between dollar and euro are looked for in daily and four-hour timeframes.
  • Market structure is analyzed by incorporating Breakers and mitigation blocks. Overall bullish or bearish market structures are maintained while creating larger degree of market structure swings.
  • PD array matrix is defined from premium to discount levels, which helps calibrate key price levels for entry.

Daily Bias

  • Going through all these steps leads to a specific daily bias, which will be defined from that higher timeframe banking time frame where banks spend most time looking at it's the daily chart so you want to transpose all these ideas and Analysis and levels over to our four-hour chart.

Commercial Hedging

In this section, the speaker discusses how he develops an opinion of smart money and their respective actions in the market.

Developing an Opinion of Smart Money

  • The speaker refers to the last 12 months of the commercial hedgers commitment of Traders net Holdings to determine smart money actions in the market.
  • The highest and lowest readings in the cot line chart for commercial hedgers are determined, and that range is visually divided.

Trading Analysis Techniques

In this section, the speaker discusses his trading analysis techniques and how he uses open interest and institutional order flow to make trading decisions.

Open Interest

  • Open interest is not a concern until the daily timeframe is reached.
  • A decline of 15 or more in open interest when price is trading at a higher timeframe discount array is extremely bullish. An increase of 15 or more in open interest when price is trading at a higher timeframe premium array is extremely bearish.
  • If open interest does not meet either of these criteria, it is not considered in the speaker's analysis.

Institutional Order Flow

  • When the monthly and/or weekly time frame is bearish, finding resistance on up close candles on the daily and breaking through down close candles on the daily is extremely bearish.
  • When the monthly and/or weekly time frame is bullish, finding support at down close daily candles and breaking through up close daily candles on the daily chart is extremely bullish.
  • It's important to follow what institutions are doing from a daily chart perspective, even if you don't look at higher time frames.

Weekly Profiles

  • When only looking at the daily chart, start with scenarios that might produce specific bearish or bullish weekly profiles based on whether the market is calling for a bearish or bullish market.
  • The weekly range typically forms between Tuesday and Thursday. For a bullish market, internalize Tuesday creating the high of the week and Thursday's New York open creating the low of the week. For a bearish market, internalize Tuesday as consolidation portions or near the open of a power three type scenario and Friday being closed for power three.

Forecasting Weekly Profiles

In this section, the speaker discusses how to forecast weekly profiles and the importance of using the calendar and looking for specific drivers.

Forecasting Weekly Profiles

  • There is no one-size-fits-all approach to forecasting weekly profiles. It's important to use the calendar and look for specific drivers.
  • (Timestamp not provided in transcript) The speaker emphasizes that it's important to have a plan before entering a trade and to stick with that plan.

Trading Strategies for Weekly Profiles

In this section, the speaker discusses his approach to trading weekly profiles and how he uses the economic calendar to anticipate market movements.

Importance of Mondays

  • The speaker is more active on Mondays and watches the market more closely than usual.
  • He is willing to give up the Monday low of the week because Tuesday generally provides an optimal trade entry based on Monday's low.

Using Economic Calendar for Weekly Profiles

  • The speaker recommends going back to March's content for details about what weekly profiles exist.
  • To anticipate a specific type of phenomenon, use the economic calendar and institutional order flow from monthly, weekly, and daily data.
  • Anticipating setups for entries will be easier by forecasting the weekly profile using economic calendars drivers for liquidity runs and manipulations that we can get in sync with.

Forecasting Weekly Profiles

  • The speaker does not have a systematic approach for forecasting weekly profiles but has a rough idea of what may unfold relative to what the economic calendar shows.
  • He focuses on finding something before Friday explodes by looking at what they are doing relative to opening prices on Sunday or Monday midnight New York time.

Trading Strategy Overview

In this section, the speaker provides an overview of their trading strategy.

Opening Price Analysis

  • The speaker looks at the opening price on Monday morning in New York time.
  • They check if they are bullish or bearish based on whether the price is above or below the weekly range.
  • They also look for a discount array if they are bullish and a premium array if they are bearish.

SMT Divergence Analysis

  • The speaker uses SMT divergence analysis to confirm their opinion on price.
  • They look for divergences between daily and 4-hour charts to find trading opportunities.

Market Structure Analysis

  • The speaker defines the current market structure by looking for breakers on a daily timeframe.
  • Breakers can alert traders to where the next intermediate-term price swing is going to form.
  • Trading opportunities exist between bullish and bearish breakers.

PDRA Matrix Analysis

  • The speaker goes through the daily and 4-hour charts using a PDRA matrix.
  • They note all discount and premium arrays as these help calibrate key levels for entry or exits.

Calibration of Key Levels

  • After analyzing the PDRA matrix, the speaker calibrates key levels to nearest 10 or nearest five level.
  • This helps them identify where trades may reach for entry or exits.

Understanding Daily Bias

In this section, the speaker explains how to determine the daily bias of a market and how to execute trades based on that bias.

Determining Daily Bias

  • The daily bias is determined through analysis of various factors such as commercial hedging considerations, open interest, institutional order flow, and weekly profiles.
  • Being bullish or bearish on a market does not mean buying or selling every day. Trades are executed when specific conditions are met such as discount arrays for long positions and premium arrays for short positions.
  • Market correlation and intermarket analysis are used to confirm the analysis.

Framing a Trade

  • A portion of market structure is selected to frame a trade-in. This involves identifying key levels within a range using PD arrays.
  • The directional-based analysis on a daily time frame is then transposed onto the four-hour chart.

Pet Trading Patterns

In this section, the speaker shares their personal trading patterns and provides insights into how they approach trading.

Personal Trading Patterns

  • The speaker shares their preferred trading patterns which involve detailed analysis to identify low resistance liquidity runs or high probability setups.
  • These patterns are based on their own analysis and should not be mimicked or copied by others.
  • It's important to note that even with detailed analysis, there is still room for error in trading.

Using Top-Down Analysis to Trade Successfully

The speaker advises traders not to fear losses and to use top-down analysis when trading. He emphasizes the importance of watching accompanying videos and incorporating commentary into one's trading strategy.

Key Points:

  • Don't be afraid of losses; use them as opportunities to learn.
  • Use top-down analysis, starting with higher time frames and working down.
  • Watch accompanying videos and incorporate commentary into your trading strategy.

Understanding Market Profiles and the PD Array Matrix

The speaker discusses the importance of understanding market profiles and using the PD array matrix in conjunction with ICT concepts. He emphasizes that this requires going through all mentorship teachings and employing the PD array matrix.

Key Points:

  • Market maker buy profiles and sell profiles can be understood through market profiles.
  • Understanding the PD array matrix is crucial for successful trading with ICT concepts.
  • Work from higher time frames down when using the PD array matrix.
  • The PD array matrix answers questions about which order block to buy or sell.

Using Higher Time Frames for Trading Decisions

The speaker explains how higher time frames can inform trading decisions, particularly on daily and four-hour charts. He encourages traders to work from higher time frames down when analyzing markets.

Key Points:

  • Higher time frames (daily, four-hour) provide insight into market direction.
  • Analyzing multiple time frames helps determine whether price will be supported or change direction.
  • Working from higher time frames down is an effective way to analyze markets.
Playlists: 2017 ICT Private Mentorship Core Content Month 12
Video description

2017 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in August 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.