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ICT Mentorship 2023 - August 18, 2023 Live trade Walkthrough
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ICT Mentorship 2023 - August 18, 2023 Live trade Walkthrough

Introduction and Approach to Teaching

In this section, the speaker introduces a different approach to teaching and explains the purpose of the live execution video.

Teaching Approach

  • The speaker plans to provide a y and a explanation for the live execution shown in the previous video.
  • It is recommended to watch the full-length silent video before proceeding.
  • Some viewers may be tempted to speed up the video, but it is advised not to do so in order to fully experience real market conditions.
  • The objective is for viewers to be inspired by the executions and learn from them in their own observations.

Importance of Real Market Conditions

This section emphasizes the importance of observing real-time price action and highlights the limitations of using Forex testers or market replay.

Observing Real-Time Price Action

  • Watching real-time price delivery provides valuable insights into how price behaves over time.
  • Using screen recording applications like Camtasia or OBS allows for studying price action on multiple time frames.
  • Real-time price delivery offers organic fluctuations, unlike trading view's market replay which can feel stilted.
  • By watching how long it takes for price to reach certain levels, traders can gain better understanding and make informed decisions.

Importance of Preparation Before Trading

This section emphasizes the need for preparation and patience before entering live trades or demo trading.

Rushing vs. Striving for Excellence

  • Rushing into trading without proper preparation often leads to losses.
  • Traders should strive for excellence rather than trying to quickly make money due to financial pressures.
  • Building skills through observation, study, and practice is crucial before placing live trades or even demo trading.

Real-Time Execution Example

The speaker introduces an example of a real-time execution and highlights the importance of making decisions in real-time.

Real-Time Decision Making

  • The speaker shares an example of executing live trades without prior knowledge or advantage.
  • Traders should consider how calculations, determinations, and adjustments are made in real-time.
  • Understanding when one is on the wrong side of the market (offside) is crucial for making informed trading decisions.

Observing Liquidity and Inefficiency

This section discusses the importance of observing liquidity and inefficiency in price action.

Key Observations

  • Traders should focus on identifying obvious runs on liquidity and inefficiency in price action.
  • The speaker mentions that a video will be played to explain these concepts further.

Timestamps have been associated with bullet points as requested.

Shorting the S&P

The speaker discusses their decision to short five contracts on the S&P. They were looking for a shaded area at the bottom and express dissatisfaction with the current market conditions.

Shorting based on market analysis

  • The speaker was looking for a shaded area at the bottom of the chart.
  • They mention a sell-side inefficiency and volume imbalance in that area.
  • Initially, they thought there might be a rebalance to this inefficiency before going lower.
  • The speaker wanted to see price run for the sell side and potentially reach TGIF (20 to 30 of weekly range retracement).
  • They were willing to take the trade with a small risk due to the defined area of interest.

Importance of Taking Notes

The speaker emphasizes the importance of taking notes while watching their videos. They encourage viewers to actively engage with the material, test it in real markets, and measure its validity.

Benefits of note-taking

  • Not taking notes while watching instructional videos is considered a waste of time.
  • Viewers are encouraged to write down information, put it in their journal, and actively look for patterns in real markets.
  • The speaker wants viewers to test and validate their teachings rather than blindly accepting them as truth.
  • Profitable students around the world demonstrate that these methods work.

Overcoming Market Inefficiency

The speaker focuses on overcoming an inefficiency in the market by observing price behavior around specific candles. They explain how bearish order flow should disregard respect for down close candles.

Observing price behavior

  • The shaded area represents an inefficiency defined by two candles' lows and highs.
  • Price needs to overcome a down close candle to validate a bearish scenario.
  • The speaker wants to see price accelerate towards the inefficiency and potentially reach lower levels.
  • They emphasize that observing price behavior is more important than relying on indicators or volume profiles.

Reacting to Price Behavior

The speaker reacts to price behavior and makes adjustments to their trade based on how price respects certain levels. They highlight the significance of the opening price and its impact on their decision-making process.

Adjusting the trade

  • The speaker places their stop loss above a fairway gap, indicating a potential reversal point.
  • They closely monitor how price interacts with the opening price of a specific candle.
  • If price respects the opening price, it suggests a bullish sentiment, leading them to close and reopen a new trade.
  • The speaker emphasizes that dynamic observation of price action is crucial for understanding market dynamics.

Dynamic Learning vs Static Information

The speaker discusses the limitations of static information, such as books, in understanding market dynamics. They highlight the importance of dynamic learning through videos and real-time observation.

Importance of dynamic learning

  • Dynamic learning through videos provides supplemental information that cannot be captured in static pictures or books.
  • Videos allow viewers to observe market dynamics as they unfold in real time.
  • Static information alone does not provide a comprehensive understanding of market behavior.

Timestamps are approximate and may vary slightly depending on video playback.

New Section

The speaker discusses their trading strategy and decision-making process, focusing on a specific candle and the importance of price action.

Analyzing Price Action

  • The speaker points out a candle that is trading down and mentions being short in the market. They emphasize the significance of watching this particular candle.
  • They highlight a specific price level on the chart that they believe should not go back up. This observation leads them to think that they are offside in their trade.
  • The speaker explains that they would never close a trade if they still want to add more contracts or remain in the same position. They anticipate a level to give way to the upside and decide to go long instead of staying short.

New Section

The speaker discusses their decision to switch from a short position to going long, as well as their approach to setting stop losses.

Switching Positions

  • The speaker shares that they stopped their short position at a loss and immediately went long by buying five contracts. They explain their reasoning for this decision based on anticipated market movement.
  • After going long, the speaker sets their stop loss below certain candles' bodies on the chart, using them as defense levels against potential downside movements. They also consider the top of imbalances in a blue shaded area for additional protection.

New Section

The speaker discusses their approach to stop losses and how they teach it to someone else.

Stop Loss Strategy

  • The speaker shares an example where they set an intentionally tight stop loss with unrealistic expectations, hoping to get stopped out before reevaluating and potentially reentering the trade with available price action. They explain this strategy to someone who is hesitant to use stop losses.
  • They mention expecting a certain area to become an inversion fair value and continue monitoring price action.

New Section

The speaker explains their reasoning behind raising the stop loss and their focus on key levels in the market.

Raising Stop Loss

  • The speaker raises their stop loss, reducing risk, and aims to see how price can break through a specific high on the chart. They also mention watching NASDAQ for further insights.
  • They emphasize that certain levels should not be breached based on previous price movements and discuss liquidity purposes and realistic objectives for the market.

New Section

The speaker discusses their mindset regarding low-hanging fruit objectives and potential market movements.

Low-Hanging Fruit Objectives

  • The speaker mentions teaching someone about low-hanging fruit objectives as a bread-and-butter income trading strategy. They anticipate drawing towards specific levels based on market conditions and previous price actions.
  • They highlight the importance of bullish breakers, clean candles, and liquidity considerations when determining potential market directions.

New Section

In this section, the speaker discusses the importance of not raising stop loss orders below inversion fair value gaps and emphasizes the need to keep stop losses within a certain range.

Stop Loss Placement

  • The speaker advises against raising stop loss orders below inversion fair value gaps.
  • It is important to keep stop losses within a specific range and not run them up underneath inversion fair value gaps.
  • Defense mechanisms should be kept within a certain area rather than extending them beyond that point.

New Section

In this section, the speaker explains how wicking through indicates a likelihood of coming back down and trading into a specific area. They also emphasize the importance of not trailing stop losses in fair value gaps after a shift in market structure.

Wicking Through and Stop Loss Placement

  • Wicking through suggests that there is a high chance of returning to trade in a particular area.
  • Stop losses should not be trailed in fair value gaps after a shift in market structure.
  • Market rebalancing and repricing may cause price to gravitate towards fair value gaps.

New Section

The speaker mentions that price is gravitating towards a shaded area.

Price Movement

  • Price is moving towards a shaded area on the chart.

New Section

The speaker states that they are watching NASDAQ as it delivers higher.

Monitoring NASDAQ

  • The speaker is closely monitoring NASDAQ as it continues to deliver higher prices.

New Section

The speaker highlights an inefficiency where the low on a pullback is inside an inefficiency, indicating potential further upward movement. They also reiterate the importance of not placing stop losses in fair value gaps after a shift in market structure.

Inefficiency and Stop Loss Placement

  • An inefficiency is observed where the low on a pullback is inside it, suggesting potential upward movement.
  • Stop losses should not be placed in fair value gaps after a shift in market structure.
  • Market may likely go back and reprice to these inefficiencies.

New Section

The speaker emphasizes the importance of never putting stop losses at or inside a fair value gap after a shift in market structure. They also mention that the expectation is for price to trade towards fair value gaps.

Stop Loss Placement and Market Expectations

  • Stop losses should never be placed at or inside a fair value gap after a shift in market structure.
  • Price is expected to trade towards fair value gaps.
  • Placing stop losses near fair value gaps is considered flawed logic.

New Section

The speaker mentions taking a long position on NASDAQ.

Long Position on NASDAQ

  • A long position has been taken on NASDAQ.

New Section

The speaker identifies the last line of defense as a down close candle, indicating potential further downward movement if breached.

Last Line of Defense

  • A down close candle serves as the last line of defense.
  • If this level is breached, it may lead to further downward movement.

New Section

The speaker mentions that if price goes through the last line of defense, it will run into a fair value gap and trigger the stop loss order.

Breaching the Last Line of Defense

  • If price goes through the last line of defense, it will encounter a fair value gap and trigger the stop loss order.

New Section

The speaker explains that no partials will be taken on the trades, and mentions the idea of price running up to take out the buy side but advises against it due to stop loss placement.

No Partials and Stop Loss Placement

  • No partials will be taken on the trades.
  • Price running up to take out the buy side is not recommended due to stop loss placement.

New Section

The speaker reiterates the importance of not placing stop losses inside fair value gaps after a shift in market structure. They also mention allowing for market repricing to inefficiencies.

Stop Loss Placement and Market Repricing

  • Stop losses should never be placed inside fair value gaps after a shift in market structure.
  • Market may likely go back and reprice to inefficiencies.

New Section

The speaker analyzes NASDAQ's movement and identifies an inefficiency below a previous high, cautioning against placing stop losses in that area if one were long.

Analyzing NASDAQ Movement

  • An inefficiency is observed below a previous high on NASDAQ.
  • Placing stop losses in that area is not recommended if one were long.

New Section

The speaker briefly looks at other averages and mentions liquidity for the Dow. They then proceed to pull up the dollar index and Euro charts.

Looking at Other Averages and Currency Charts

  • Other averages are briefly examined, including liquidity for the Dow.
  • The dollar index and Euro charts are pulled up for analysis.

New Section

The speaker notes that Euro is moving higher, indicating a risk-on scenario. They mention inviting opportunities for the market to take the stop loss and then repositioning when there is an opportunity.

Euro Movement and Stop Loss Strategy

  • Euro is moving higher, suggesting a risk-on scenario.
  • Opportunities are invited for the market to take the stop loss, followed by repositioning when suitable opportunities arise.

New Section

The speaker mentions going long in the market.

Going Long

  • A decision is made to go long in the market.

New Section

The speaker reverses their position from short to long. They discuss adding positions and mention fair value gaps as potential areas of stop loss placement.

Reversing Position and Stop Loss Placement

  • The speaker reverses their position from short to long.
  • Additional positions are added.
  • Fair value gaps are mentioned as potential areas for stop loss placement.

New Section

The speaker acknowledges that trading involves weighing various factors and can be challenging due to multiple considerations.

Challenges in Trading

  • Trading involves considering multiple factors, making it a complex task.
  • Weighing different aspects is necessary for successful trading.

New Section

This section discusses the placement of stop loss and the importance of fair value gaps in trading.

Stop Loss Placement

  • The speaker explains that they are willing to accept a trade going down to the low of an area and even one tick below it.
  • They place a stop loss below the consequent correction of a candle's wick, which is also the low of an inversion fair value gap.
  • The speaker emphasizes that they are not worried if the trade goes slightly below the expected level as long as it stays within acceptable limits.
  • They mention that they have seen this situation many times before and it does not concern them.
  • The speaker points out that they feel confident because their position is inside the fair value gap and opened at the bottom of the shaded area.

New Section

This section focuses on accumulating long positions in specific areas and observing price movements.

Accumulating Long Positions

  • The speaker mentions that this is exactly where one would want to accumulate a long position.
  • They express their intention to sit back and observe how things unfold.

New Section

This section discusses resistance levels, volume imbalances, and price rebalancing.

Resistance Turned Support

  • The speaker highlights a volume imbalance where price could draw up into.
  • They explain that they want to see this area act as support after breaking through resistance, similar to classic support-turn-resistance dynamics.

New Section

This section mentions additional information provided in a previous livestream regarding a dashed line on the chart.

Additional Information on Dashed Line

  • The speaker refers to a dashed line mentioned in a previous livestream but suggests watching it for more details.
  • They mention that the dashed line represents a specific concept explained in the livestream.

New Section

This section discusses taking long positions on NASDAQ and explains why the speaker traded S&P instead.

Long Position on NASDAQ

  • The speaker mentions that if they had no trades, they would consider going long on NASDAQ.
  • They explain that they chose to trade S&P instead of NASDAQ because S&P did not make a lower low like NASDAQ did, indicating relative strength.

New Section

This section highlights the importance of understanding the narrative and accumulating new long positions.

Understanding the Narrative

  • The speaker appreciates how bodies respect the high end of a fair value gap, indicating confidence in their position.
  • They mention accumulating new long positions at a discount price just outside the fair value gap.

New Section

This section focuses on observing price movements and adjusting stop loss accordingly.

Observing Price Movements

  • The speaker observes the consequent encroachment of a wick half weight and considers rolling up their stop loss.
  • They contemplate doing a market order but decide to place a limit order instead.
  • The speaker waits for price to get above a threshold before adjusting their stop loss.
  • If price hits their stop loss, they are done with the trade; otherwise, they will check it later.

New Section

This section emphasizes managing expectations, looking at specific PDA rays, and monitoring price rebalancing.

Managing Expectations

  • The speaker mentions that managing expectations is crucial when considering where price should rebalance.
  • They show an example where they got stopped out and highlight the importance of execution details without magnifying them.

Understanding the Teaching Style

In this section, the speaker addresses criticism and clarifies their teaching style. They emphasize that if viewers can do better, they should make their own YouTube videos to showcase their skills. The speaker also mentions that they have a diverse audience and may discuss topics beyond the scope of some viewers' learning.

Teaching Style Clarification

  • The speaker acknowledges that not everyone may agree with their specific way of talking or discussing certain topics.
  • They explain that there are people who rely on others' opinions about them without doing proper research on the validity of what they teach.
  • The speaker emphasizes that their teaching approach involves logical thinking and provides practical examples.

Entry Strategy and Risk Management

In this section, the speaker discusses entry strategies and risk management techniques in trading.

Entry Strategy

  • The speaker suggests entering a position with a small stop loss at a specific point identified as an entry.
  • They mention the importance of adding new contracts or building up positions as price moves in favor.
  • The speaker highlights the need to consider market dynamics rather than relying solely on supply and demand concepts.

Addressing Misunderstandings

Here, the speaker addresses misunderstandings about their trading approach and responds to criticisms.

Clearing Misunderstandings

  • The speaker states that they have been teaching before certain concepts became popularized by others.
  • They apologize if their straightforwardness comes across as offensive or condescending but assert that it is based on facts.
  • The speaker explains how using rectangles on charts helps visualize market movements similar to mountain climbing.

Analyzing Price Movements

This section focuses on analyzing price movements and understanding market inefficiencies.

Analyzing Price Movements

  • The speaker compares price movements to climbing a mountain, where sometimes one needs to go down before going up.
  • They emphasize the importance of zooming out and analyzing the bigger picture rather than getting too focused on individual candlesticks.
  • The speaker highlights the significance of identifying inefficiencies in price levels and using them as reference points for trading decisions.

Algorithmic Signatures and Market Behavior

In this section, the speaker discusses algorithmic signatures and market behavior.

Algorithmic Signatures

  • The speaker explains how they have codified algorithmic signatures that help identify key levels in the market.
  • They provide examples of how these signatures can be observed in price action.
  • The speaker asserts their expertise in understanding and teaching these concepts.

Bullish Order Block

This section focuses on a specific bullish order block in the market.

Bullish Order Block

  • The speaker identifies a specific candle as a bullish order block, indicating potential upward movement in price.

New Section

In this section, the speaker discusses the importance of having a bullish narrative to qualify a bullish order block.

Importance of Narrative

  • A bullish narrative is necessary to validate a bullish order block.
  • Without a narrative, a down close candle volume and balance are not sufficient indicators.
  • Other educators like John Murphy and Jack Swagger do not cover this concept in their books.

New Section

The speaker emphasizes the significance of understanding the truth about market movements and warns against denying it.

Embracing Truth

  • Denying or resisting the truth about market movements can lead to negative consequences.
  • Wrestling with truth does not result in victory; instead, it is important to accept and understand it.
  • Many people initially come as trolls but eventually realize the value of embracing the truth.

New Section

The speaker encourages individuals to investigate and verify the presence of market patterns for themselves.

Personal Verification

  • It is essential to conduct due diligence and personally verify market patterns rather than blindly accepting what others say.
  • Those who have done their own research and verification deserve praise for their character.
  • Accepting the truth can be challenging, but it leads to greater understanding of market dynamics.

New Section

The speaker suggests that markets are scripted and can be understood by deciphering their source code.

Scripted Markets

  • Markets operate according to a script that determines their ups and downs.
  • Understanding the source code behind market movements allows one to read them like a familiar book.
  • This insight may appear magical or fraudulent to outsiders, but it stems from deep understanding.

New Section

The speaker compares the ability to understand market movements to time travel.

Insight and Visibility

  • Understanding market dynamics provides a level of insight and visibility that resembles time travel.
  • This understanding allows for accurate predictions and informed decision-making.
  • Others may perceive this ability as wizardry or fraud, but it is based on deep knowledge.

The transcript provided does not include specific timestamps for each bullet point. I have associated the bullet points with the closest available timestamps in the given transcript.

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.