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ICT Mentorship 2023 Market Review - July 09, 2023
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ICT Mentorship 2023 Market Review - July 09, 2023

Market Review for July 9th, 2023

The speaker provides an overview of the dollar index on a weekly chart and discusses the potential trading range and liquidity pool. They mention their preference for a run below a certain level and how it may impact trading.

Dollar Index Weekly Chart

  • The candle on the weekly chart is bearish, indicating a potential downward trend.
  • There is a fair value gap and sell-side liquidity pool in the trading range.
  • The speaker expects to see how the market opens and trades during the upcoming week.
  • They favor a run below a specific low, which may lead to further selling pressure.

Dollar Index Daily Chart

The speaker analyzes the daily chart of the dollar index, highlighting its movement towards the weekly mean threshold. They discuss potential price action based on previous levels and patterns.

Working into Daily Fair Value Gap

  • The dollar index has worked into the daily fair value gap after reaching the weekly mean threshold.
  • A significant sell-off occurred recently, but there is potential for a return back up to previous levels.
  • A high-low higher-high pattern suggests possible upward movement before potentially continuing downwards.

Hourly Chart Analysis

The speaker examines the hourly chart of the dollar index, focusing on price action around key levels. They discuss how holiday volume affects trading and highlight cleaner price action towards the end of the week.

Impact of Holiday Volume

  • The opening price on Monday after July 4th holiday reflects lower volume due to celebrations.
  • Trading on Thursday tends to have cleaner price action compared to Mondays.
  • It is important to consider non-farm payroll Friday when planning trades during holiday weeks.

Immediate Rebalance and Manipulation

The speaker discusses the concept of immediate rebalance and manipulation in the market. They analyze price movements and identify potential stop runs and liquidity levels.

Immediate Rebalance and Liquidity Levels

  • The market shows respect for the high of the weekly fair value gap, indicating potential manipulation.
  • A sharp break below a certain level leads to an immediate rebalance.
  • The speaker identifies a Judas swing pattern, suggesting a stop run before targeting lower prices.

Market Manipulation and Liquidity Targets

The speaker continues to discuss market manipulation, focusing on liquidity targets and price delivery. They explain how certain candle patterns indicate specific levels of liquidity or inefficiency.

Market Manipulation and Price Delivery

  • Market manipulation involves targeting specific levels of liquidity or inefficiency.
  • An immediate rebalance indicates urgency in price delivery.
  • The displacement below a certain low is indicative of targeting old fair value gaps for lower prices.

Timestamps have been associated with relevant bullet points as requested.

New Section

This section discusses the price action and trading patterns of the dollar index and euro-dollar pair, focusing on weekly volume imbalances and order blocks.

Dollar Index Analysis

  • The Judas swing pattern is observed in the dollar index, where it opens strong at the beginning of the week, makes a high, and then trades below that level towards the end of the week.
  • A fair value gap is identified during the New York open, which provides an opportunity for price to trade up into it.
  • The algorithm references the opening price as a key level for determining delivery state changes.
  • Lower prices in the dollar index may lead to a potential rally towards specific levels such as 111, 11.30, and 11.50 within the weekly volume imbalance area.

Euro-Dollar Analysis

  • The weekly volume imbalance in euro-dollar suggests a reversal of expectations compared to the dollar index.
  • The focus is on treating certain areas as inversion fair value gaps that act as support for potential buy-side opportunities.
  • Short-term objectives include reaching premium arrays and relative equal highs while considering overall bullish sentiment.

Order Block Theory

  • Order block theory involves analyzing various time frames beyond standard ones (monthly, weekly, daily) to understand price delivery continuum and identify key levels.
  • Examples include using intraday charts like silver bullets or model 2022 with time frames such as five minutes, four minutes, three minutes, etc.
  • Top-down approach helps determine order blocks based on swing highs/lows within specific ranges.

Conclusion

The analysis focuses on understanding price patterns in both dollar index and euro-dollar, with an emphasis on weekly volume imbalances and order blocks. The dollar index shows potential for lower prices, while euro-dollar presents opportunities for buy-side trading. Order block theory is used to identify key levels across various time frames.

New Section

The speaker discusses the trading activity and potential market movements in relation to the Euro and the weekly volume of balance.

Euro Trading Activity

  • The speaker observes a rally in the Euro after an initial trade down, followed by a touch on the weekly inversion.
  • They mention that it would have been interesting to see the price trade back down into the weekly inversion, but with a gap present, they would not want to see it happen.
  • The high of a specific candle is highlighted as an important level to watch, along with a shaded area representing consequent encroachment.
  • As long as the price remains above these levels, the speaker maintains a bullish outlook on the Euro.

New Section

The speaker analyzes the 15-minute chart of Euro and discusses its movement during New York open.

New York Open Analysis

  • The speaker notes that during New York open, there was a drop into the daily publish order block within consequent encroachment of bots and balance cell standard efficiency.
  • They mention that if there is another trade down into that blue shaded area, it could provide a buying opportunity.
  • The time frame between 7 AM to 9 AM (New York local time) is referred to as the "New York open Kill Zone."
  • The speaker expects further upward movement in Euro as long as certain levels are maintained.

New Section

The speaker discusses recent price movements in Euro and identifies key areas for potential trades.

Recent Price Movements

  • There is reference to a previous buy opportunity when the price traded back down before rallying again.
  • A gap in price action is mentioned, and as long as the price remains above its midpoint, higher prices are expected.
  • Additionally, there is mention of aiming for the buy side and the weekly volume of balance.
  • The speaker also refers to the e-mini S&P chart, highlighting a weekly volume of balance and the importance of observing how price trades during the week.

New Section

The speaker discusses potential trading scenarios based on recent price movements in Euro and e-mini S&P.

Potential Trading Scenarios

  • The speaker notes that trading into a range between two levels is expected, with a focus on the weekly volume of balance.
  • They mention that their forecast is based on current information but acknowledges that it can change with Sunday's opening.
  • The daily chart is analyzed, highlighting important levels such as an order block and a specific candle's high.
  • If certain levels are breached, lower prices may be expected, but at present, there is no indication of that happening.

New Section

The speaker shares their approach to trading Euro and e-mini S&P based on current market conditions.

Approach to Trading

  • The speaker mentions avoiding trying to pick a top in Euro or e-mini S&P.
  • They highlight the possibility of price retracing back up or making a higher high before potentially going lower.
  • Their strategy involves waiting to see how the market opens on Sunday and how it trades overnight into Monday morning.

New Section

The speaker discusses utilizing both electronic trading hours and regular trading hours for better analysis.

Utilizing Trading Hours

  • The speaker mentions using both electronic trading hours and regular trading hours for better analysis.
  • They point out smooth highs in price action and identify fair value gaps as potential areas for trades.

Liquidity and Price Action Analysis

In this section, the speaker discusses liquidity and price action analysis, focusing on identifying potential trading opportunities based on gaps and inefficiencies in the market.

Understanding Liquidity Levels

  • The speaker notes that it is interesting to observe that a previous low was not breached, indicating potential support.
  • They mention looking for a gap below the current price level and monitoring how it behaves. If there is a trade up followed by hitting the low of this efficiency, it could indicate an opportunity to enter short positions.
  • The speaker emphasizes paying attention to any acceleration to the downside as it may signal further selling pressure.

Analyzing Sell Side Residing Areas

  • The speaker highlights a refined area on the daily chart where sell side liquidity is present.
  • They suggest considering how far below the relative equal lows price can go, particularly focusing on a specific gap.
  • If price accelerates through this gap, traders should look for potential support levels below these lows.

Daily Chart Analysis

In this section, the speaker provides insights into analyzing charts at different timeframes and explains how gaps can be used as indicators of inefficiencies in price delivery.

Transitioning to One-Hour Chart with Regular Trading Hours

  • The speaker switches to discussing the one-hour chart using regular trading hours instead of electronic trading hours.
  • Regular trading hours are when gaps between sessions occur (e.g., from settlement price of the previous day to opening at 9:30 AM).
  • The distance separating these two points represents the opening range gap, which acts similarly to weekly volume imbalances.

Understanding Price Delivery Inefficiencies

  • The speaker uses an analogy of painting with a roller to explain inefficiencies in price delivery.
  • They illustrate how areas between candle bodies represent inefficiencies where price has not been fully delivered.
  • Traders are encouraged to observe and identify these ranges on their charts, particularly during electronic trading hours.

Dynamic Support and Resistance

In this section, the speaker delves deeper into understanding gaps and how they can act as dynamic support and resistance levels.

Viewing Price Action During Electronic Trading Hours

  • The speaker advises viewers to study price action during electronic trading hours to gain a better understanding of how price is delivered.
  • They emphasize that dynamic support and resistance levels may not be readily seen or understood by most traders.
  • These levels cannot be found in traditional support and resistance concepts or books.

Recognizing Inefficiencies in Price Delivery

  • The speaker explains that gaps should not be considered closed once price moves from one side of the gap to the other.
  • They highlight three specific price points within a gap (low, midpoint, high) that algorithms refer back to for sensitivity analysis.
  • Traders are encouraged to split the range into quadrants for further analysis during electronic trading hours.

Anticipating Price Delivery

In this section, the speaker emphasizes the importance of anticipating price delivery based on inefficiencies observed within gaps.

Extending Inefficiencies Over Time

  • The speaker suggests extending inefficiencies over time as they eventually become offered by both buy-side and sell-side participants.
  • They point out a real inefficiency between two candle opening prices where no bodies exist, indicating potential future upside and downside delivery opportunities.

Respecting Opening Prices

  • The speaker highlights how opening prices within a range are respected by subsequent price action.
  • They demonstrate examples of working off lows and reaching up into previous gaps, indicating market behavior around opening prices.

Dynamic Support and Resistance Analysis

In this section, the speaker emphasizes the dynamic nature of support and resistance levels derived from gaps.

Dynamic Support and Resistance Not Found in Traditional Concepts

  • The speaker reiterates that dynamic support and resistance levels are not commonly found in traditional support and resistance concepts or books.
  • They emphasize the need to study price action during electronic trading hours to observe how these levels function.

Separating from Retail Traders

  • The speaker distinguishes their approach from retail traders by considering gaps as ongoing concerns rather than closing them once price moves across the gap.
  • Algorithms refer back to specific price points within a gap, making them highly sensitive for analysis.

Electronic Trading Hours Study Assignment

In this section, the speaker assigns viewers with a homework task to study price action during electronic trading hours.

Studying Price Action During Electronic Trading Hours

  • Viewers are encouraged to study all price action during electronic trading hours, even when gaps are missing.
  • The speaker advises observing how price is delivered within these timeframes to gain a deeper understanding of market dynamics.

New Section

In this section, the speaker explains the process of toggling between regular trading hours and electronic trading hours to study price movements. The goal is to identify inefficiencies on the chart and track specific setups during study time.

Focusing on Inefficiencies

  • The speaker suggests looking for inefficiencies or "silver bullets" in both the London session and New York session, including AM and PM sessions.
  • These inefficiencies can be found not only at the high and low points but also at 75%, 50%, and 25% of their respective ranges.
  • It is recommended to analyze these inefficiencies on time frames lower than one hour.

New Section

In this section, the speaker introduces three homework assignments related to studying inefficiencies on lower time frames. Liquidity pools are discussed as a key concept for analysis.

Liquidity Pools and Homework Assignments

  • The speaker mentions a 15-minute timer technique taught in a tutorial that focuses on classifying specific liquidity pools.
  • Liquidity pools, such as London session highs and lows, are important reference points for analyzing market behavior.
  • Three homework assignments are given to explore these respective inefficiencies on time frames lower than one hour.

New Section

This section provides an example of analyzing liquidity pools using a five-minute chart for E-mini S&P.

Analyzing Liquidity Pools with a Five-Minute Chart

  • The speaker demonstrates how order blocks can be used as optimal trade entry points.
  • By accumulating and rallying higher into liquidity pools, traders can take advantage of market reversals.
  • The example shows how the market breaks down, leading to long positions on NASDAQ and short positions going into the PM session.
  • The speaker emphasizes the importance of using specific patterns and reference points, such as the Thursday London session buy/sell liquidity pool.

New Section

In this section, the speaker discusses a specific pattern and its significance in analyzing market behavior.

ICT Market Maker Cell Model

  • The speaker introduces a pattern known as the ICT Market Maker Cell Model.
  • This model involves stages such as accumulation, reaccumulation, reversal low risk cell distribution, redistribution, and aggressive sell-off into sell-side liquidity.
  • Another pattern mentioned is the breaker pattern, which consists of a high-low-high sequence that can disrupt gap closures.
  • Reference points from opening ranges are also considered when analyzing gaps.

New Section

This section focuses on understanding gaps and their potential closure based on specific patterns.

Understanding Gaps and Breakers

  • The speaker explains how breakers within a range can affect gap closures.
  • It is important to consider where the down-closed candle's low is located when assessing whether a certain gap will entirely close or not.
  • A specific example is provided to illustrate how these concepts apply in practice.

Analysis of NASDAQ and SMP

The speaker discusses their decision to focus on the NASDAQ instead of SMP due to student inquiries. They mention going long and short on NASDAQ, but do not provide further details.

NASDAQ Analysis

  • The speaker mentions a higher low in NASDAQ compared to a lower low in SMP.
  • They explain that they went into NASDAQ, both long and short, but do not provide specific details.
  • The speaker refers to live executions and management during the PM session for Nasdaq, which can be watched on their YouTube channel.

Timing Potential Intermediate Term High

The speaker discusses the potential for an intermediate term high based on a lower low in SMP and higher lows in S&P. They mention trying to take a trade on NASDAQ but do not elaborate.

Trade Attempt

  • The speaker mentions trying to take a trade on NASDAQ during this time period but does not provide further details.
  • They state that they will include this trade discussion in tomorrow's macro lecture.

Clear Swing Low in NASDAQ

The speaker highlights the presence of a clear swing low in NASDAQ compared to SMP. They mention mentioning it on their Twitter feed and closing a profitable trade.

Clear Swing Low

  • The speaker mentions that while SMP doesn't have a clear swing low, NASDAQ does.
  • They refer to mentioning this observation on their Twitter feed.
  • After seeing the trade running in their favor, they closed it as it was expected to be profitable.

Reaching Liquidity Pool Area

The speaker discusses reaching down into the liquidity pool area for silver bullets between 10 am and 11 am. They mention buying at relative equal highs and selling at the high point.

Liquidity Pool Area

  • The speaker mentions reaching down into the liquidity pool area for silver bullets between 10 am and 11 am.
  • They suggest buying at relative equal highs and selling at the high point as a trade strategy.

Revisiting Liquidity Pool Area

The speaker explains that old liquidity pools can act as inefficiencies, causing price to revisit them. They discuss how this can be used to identify potential buy or sell opportunities.

Revisiting Liquidity Pool

  • The speaker explains that old liquidity pools often act as inefficiencies in the market.
  • They suggest that if a buy side is observed, the algorithm may refer back to a previous area of liquidity and draw back down into it.
  • This information helps determine support levels for buying or targets for drawing on liquidity.

Gradual Learning Approach

The speaker acknowledges that there is a lot of information to absorb and emphasizes the importance of gradually learning and understanding various concepts.

Gradual Learning Approach

  • The speaker acknowledges that there is a lot of information to absorb.
  • They emphasize the importance of gradually learning and understanding various concepts.
  • The speaker intends to make lectures available but plans to introduce information gradually due to its complexity.
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.