2022 ICT Mentorship Episode 8

Applying Institutional Order Flow to Forex Markets

Introduction to the Episode

• The episode focuses on applying institutional order flow concepts specifically to forex markets, particularly using TradingView for analysis.

• The speaker expresses a personal dislike for yen pairs but acknowledges their relevance in understanding market patterns.

Analyzing Daily Charts

• Emphasis is placed on daily charts as higher time frame charts, which are essential for identifying trading patterns.

• Discussion of relative equal lows and how the market trades through them, creating opportunities for upward movement.

• The speaker explains their preference against yen pairs due to their tendency to return to specific levels multiple times.

Market Structure and Fair Value Gaps

• Identification of swing highs and lows is crucial; the market's behavior around these points indicates potential future movements.

• A metaphor comparing trading strategies to playing horseshoes illustrates aiming for liquidity targets even if not always hitting them directly.

Transitioning to Shorter Time Frames

• Analysis shifts focus onto a specific day (February 10, 2022), moving from daily charts down to a 15-minute time frame.

• The importance of marking price structures in shorter time frames is highlighted for better clarity in analysis.

New York Session Insights

• Key trading hours are identified: 7 AM - 10 AM New York time, known as the ICT killzone where significant market activity occurs.

• Observations about price action during this session reveal critical setups that traders should monitor closely.

Detailed Price Action Analysis

• A breakdown of price movements shows how swings below previous lows can indicate potential upward momentum.

• Further examination into fair value gaps within smaller price legs helps identify entry points for trades.

Anticipating Trade Targets

How to Trade Forex Using Fibonacci and Market Sessions

Understanding Fibonacci Anchoring

• The speaker discusses using a Fibonacci anchor, suggesting it should be connected to a previous swing low for effective trading.

• A specific example is given with the EUR/USD pair, indicating the importance of identifying key price levels.

Trading During London and New York Sessions

• The speaker emphasizes marking vertical lines for the London session from 2 AM to 5 AM New York local time to identify potential setups.

• For New York trades, focus on setups between 7 AM and 10 AM local time, which are critical for finding fair value gaps.

Application of Timeframes in Forex Trading

• The discussion highlights that while trading can occur in various sessions (including Asia), the speaker prefers focusing on New York and London sessions for better results.

• It’s crucial to set your trading platform to New York local time; otherwise, strategies may not yield expected outcomes.

Analyzing Currency Strength

• The speaker suggests analyzing currency pairs by checking their underlying strength; for instance, if the Euro is strong against a weak Yen, this indicates bullish potential for Euro/Yen trades.

• Observing trends in Euro futures helps traders understand market direction before making decisions.

Simplifying Trading Decisions

• A straightforward approach is recommended: determine whether currencies are strong or weak relative to each other before executing trades.