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ICT Charter Price Action Model 6.3 - Supplementary Lesson
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ICT Charter Price Action Model 6.3 - Supplementary Lesson

Market Maker Buy and Sell Models Overview

Introduction to Market Maker Models

  • The lesson focuses on Market Maker buy and sell models, emphasizing scalping, day trading, swing trading, and position trading.
  • The speaker acknowledges the delay in delivering this lesson, which is set for July 31, 2019.

Long-Term Perspective on Gold Market

  • Reference is made to a previous video discussing a setup related to gold market analysis between April and June.
  • The speaker recalls discussing a smart money reversal low-risk buy reaccumulation in the gold market during earlier commentary.

Understanding Market Dynamics

  • Emphasizes the importance of understanding the Market Maker buy model before delving into long-term position trades.
  • Highlights that insights from one time frame apply across different time frames due to fractal nature of market behavior.

Analyzing the Gold Chart

Structure of the Model

  • The model outlines sell-side (left of curve) and buy-side (right of smart money reversal).
  • Clarifies misconceptions about applying Wyckoff theory; stresses focus on accumulation and distribution rather than supply/demand zones.

Liquidity Considerations

  • Identifies points of equal highs as buy-side liquidity areas where price seeks to rebalance.
  • Discusses how price action moves from accumulation areas to offset distribution areas.

Accumulation and Distribution Insights

Buying Strategies

  • Describes buying strategies at accumulation points while mitigating previous shorts.
  • Mentions bullish outlook for gold based on prior analysis despite dollar index remaining in range.

Timeframe Analysis

  • Indicates significant time spent within ranges signifies accumulation phases before large movements occur.
  • Explains that traders are looking to sell at higher levels after accumulating positions at lower levels.

Transitioning Between Timeframes

Daily Chart Examination

Market Analysis of Gold and Dollar Index

Price Action and Accumulation in Gold Market

  • The analysis begins with a discussion on the price action within an accumulation area, highlighting a rally after finding support. The focus is on the October contract for gold, indicating significant market movements.
  • A liquidity pull is observed, with specific attention to candle formations. The low of a red candle at 13030.6 is noted as critical for potential trading decisions.
  • An institutional order entry technique is introduced, suggesting that buying gold at deeper discounts can be advantageous based on previous sell-side curves.
  • The market creates a bullish order block, allowing traders to accumulate long positions either from new entries or by adding to existing ones as prices expand above consolidation levels.

Correlation Between Gold and Dollar Index

  • Discussion shifts to the dollar index's bearish trend within its trading range, particularly around June 25th when it created a low. This context sets up the relationship between gold and dollar movements.
  • It’s noted that while gold remains elevated near old equal highs, the dollar index has room to rally back into its volume balance if it surpasses certain thresholds.
  • Observations are made about how both markets interact; if the dollar index rallies past 9840, it could negatively impact gold prices by pulling them downwards.

Market Dynamics and Trading Strategies

  • Speculation arises regarding potential short positions being accumulated against buy-side liquidity in anticipation of prolonged bullish moves in the dollar index.
  • Emphasis is placed on prior mentorship insights predicting bullish trends for gold based on current market conditions and historical price actions.
  • The importance of trading contracts with higher open interest is discussed; October contracts are preferred over August due to their liquidity advantages during this period.

Understanding Price Delivery Mechanisms

  • Insights into market maker models reveal how price imbalances lead to cycles of contraction and expansion. This understanding aids traders in making informed decisions based on logical patterns rather than ambiguity.
  • Acknowledgment that there will be periods without clear signals emphasizes patience in trading strategies while waiting for alignment across various indicators before acting decisively.

Conclusion: Navigating Market Trends

Market Analysis and Trading Strategies

Understanding Market Consolidation and Reversal Patterns

  • The discussion begins with the concept of market consolidation, highlighting a "smart money reversal" as a low-risk buying opportunity during reaccumulation phases. A bullish order block is identified, indicating multiple instances of long positions being accumulated.
  • The speaker emphasizes the relationship between the dollar and gold markets, noting that while they can remain in a large range, gold has still managed to rally significantly. This insight reflects on how different assets can behave oppositely during consolidation periods.
  • The importance of patience in trading is stressed; traders should be comfortable admitting uncertainty about market direction until more information becomes available. This honesty aids in making informed decisions rather than forcing trades.

Criteria for Analyzing Trades

  • Specific criteria are outlined for evaluating trades across various timeframes (1-hour, 4-hour, daily). Traders are encouraged to utilize weekly charts for position swing trades to capture substantial market movements effectively.
  • An analysis of gold versus the US dollar on a weekly chart reveals an absence of volume imbalance, which transitions into a fair value gap. This indicates where price may retrace before moving upward again.

Long-Term Trading Insights

  • The speaker discusses long-term swing trading strategies, suggesting that traders can accumulate long positions during specific consolidation phases and wait for significant upward expansions to maximize profits.
  • A call to action is made for viewers to review past videos from April to June for further insights into these trading strategies. This encourages ongoing learning and application of discussed concepts.

Comparative Analysis with Dollar Index

  • For deeper understanding, traders are advised to compare their observations from consolidation areas with the dollar index trends. This includes analyzing seasonal tendencies and specific lows in relation to current market conditions.
Playlists: ICT Charter Content, ICT MMXM Lectures
Video description

Government Required Risk Disclaimer and Disclosure Statement 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.