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ICT Charter Price Action Model 6 - Universal Trading Model
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ICT Charter Price Action Model 6 - Universal Trading Model

Price Action Model Number Six: Universal Trading Model

In this section, the speaker introduces the sixth price action model, which focuses on buy-side low resistance liquidity runs and fractals. The model aims to identify opportunities for trading based on liquidity draws and fair value patterns.

Buy Side Low Resistance Liquidity Runs with Fractals

  • The model focuses on identifying a liquidity draw in the buy side of a market maker profile.
  • The pattern being analyzed is called "fair value."
  • The goal is to understand how to identify setups and arrive at trade opportunities using personal chart analysis.

Understanding Key Levels and Post Price Action Analysis

In this section, the speaker emphasizes the importance of studying key levels and analyzing post price action to gain insights into trade setups. This approach forms the core of their trading model.

Importance of Key Levels and Post Price Action Analysis

  • Weekly commentary highlights key levels and directional biases.
  • Studying these levels retrospectively helps evaluate whether they played out as anticipated or failed.
  • Analyzing post price action reveals the actual outcome in terms of price movement.
  • Understanding this approach is crucial for becoming a universal trader who can identify setups across different trading styles.

Identifying Bullish Conditions for Market Movement

This section discusses how to identify bullish conditions in the market that indicate potential upward movement based on liquidity draws between moments and prices.

Range of Opportunity Based on Liquidity Draws

  • When a bullish condition is identified, it indicates that the market may move higher based on a draw in liquidity.
  • Traders need to identify the targeted liquidity level above current prices.
  • This range becomes an opportunity for traders to enter trades.

Building Premium Arrays for Potential Upside Moves

Here, the speaker explains how to build premium arrays for potential upside moves in the market.

Building Premium Arrays

  • Traders should identify a level above current prices where the market is likely to build in a premium or rally up.
  • The specific level depends on the time frame being analyzed and can be a bearish order block, previous high, liquidity void, fair value gap, or other factors.
  • Traders need to frame out this level based on their trading style and preferences.

Identifying Potential Buying Opportunities

This section focuses on identifying potential buying opportunities within the range of opportunity discussed earlier.

Initial Buy Point and Secondary Retracements

  • After the initial move higher, traders should be able to identify potential buy points based on examples from mentorship and personal study of price action.
  • The first retracement may come back to an area of original consolidation or into a fair value gap or order block.
  • There is also a likelihood of secondary retracements that allow for additional buying opportunities.
  • The setup described here could take place over one or two days in a daily chart scenario.

The transcript does not provide timestamps beyond 7 minutes and 47 seconds.

New Section

This section discusses different scenarios and trading opportunities based on market movements and chart patterns.

Identifying Long-Term Position Entry or Swing Trade Opportunities

  • A 15-minute time frame can show an Asian range false break lower, followed by a rally in the New York session or London close session.
  • On a weekly chart, a long-term consolidation may occur with an impulse leg moving higher, followed by a retracement back down.
  • Point number one after the retracement can be an ideal entry point for long-term positions or swing trades.
  • Point number two, which is a discount area relative to the range created, can also be another opportunity for position or swing trades.

Trading Opportunities on Hourly Charts

  • On an hourly chart, after an impulse leg up and retracement to point 1, it could be a London setup.
  • The expansion between point 1 and the high between point 1 and point 2 may occur during London close session and trade into the liquidity pool.

Applying Mentorship Learnings to Different Trading Models

  • The concepts taught in the mentorship program are applicable to this model as well.
  • However, specific characteristics need to be applied according to each respective model or style of trading.

Spotting Market Maker Sell Model Conditions

  • Initially spotting the consolidation or base of the market maker sell model may not be easy.
  • After the initial impulse leg higher forms, it becomes easier to locate potential setups and draw on liquidity.

Anticipating Setups without Seeing Initial Reversals

  • It's not necessary to always see the initial reversal or break from consolidation.
  • Over time, anticipatory skills will develop but only 0.1 or 2 points are needed in this model to find setups.

Determining Market Maker Buy Model Opportunities

  • Any time frame can present a bullish condition for the market maker buy model.
  • The main points to consider are a period of consolidation with equal highs, followed by a breakdown and trade to a discount area.
  • Point number one is the initial point of buying interest, while point number two can be used to add to winning positions.

Applying the Model Across Time Frames

  • The model can be applied across various time frames based on individual trading preferences.
  • Analyzing multiple time frames helps in finding potential setups and determining levels of accumulation or buying opportunities.

Understanding Bullish Conditions and Draw on Liquidity

  • When a chart presents a bullish condition, it's important to anticipate when the market is poised to move higher based on liquidity draw.
  • Identifying the targeted liquidity level provides an opportunity range for trading.

Anticipating Market Expansion and Buying Opportunities

  • A market in consolidation that trades down to a logical level of support or discount array indicates willingness for bullish movement.
  • Point number one becomes an area of interest for long entries, while point number two anticipates running into equal highs or liquidity above the original consolidation.

Applying Mentorship Learnings and Formulating an Approach

  • By combining mentorship learnings with this model, traders can find and formulate their approach across different time frames.

New Section

In this section, the speaker discusses different trading styles and the importance of understanding market conditions for effective trading.

Understanding Different Trading Styles

  • The speaker emphasizes that traders cannot be long-term or swing traders at any given moment. They need to consider market conditions and choose an appropriate trading style.
  • Scalping can be done on a daily basis, although profitability is not guaranteed. It requires finding reasons to make trades every day.
  • Day trading offers opportunities to capture the daily range almost every day, but it requires patience.
  • Swing trading requires identifying specific formations on longer timeframes, such as daily charts, and expecting price movements towards equal highs.

New Section

In this section, the speaker provides examples from a weekly chart of the British pound versus the dollar index to illustrate swing trading strategies.

Swing Trading Example - British Pound vs Dollar Index

  • The speaker analyzes a weekly chart showing a consolidation pattern.
  • By identifying impulse legs and equal highs on previous candles, potential buying opportunities are identified.
  • The speaker suggests looking for buying opportunities when price retraces into bullish order blocks.
  • A long void in the chart indicates a potential area where price may seek to fill before reversing downwards.

New Section

In this section, the speaker continues discussing swing trading strategies using an hourly chart of cable (British pound).

Swing Trading Example - Cable (British Pound) Hourly Chart

  • Price is observed trading lower on an hourly chart.
  • A long-term daily bullish order block is identified at 12965.
  • The speaker highlights two potential buying points: one at a reversal low within an order block and another after a rally back up into another bullish order block.
  • Different perspectives on price analysis are mentioned, emphasizing individual preferences and the use of personal unique perspectives.
  • The importance of considering rejection blocks and mean thresholds is mentioned.

New Section

In this section, the speaker concludes the discussion on swing trading strategies using an hourly chart of cable (British pound).

Swing Trading Example - Cable (British Pound) Hourly Chart (Continued)

  • The speaker emphasizes the importance of considering clean highs and equal highs as potential buying points.
  • Price dropping down into a bullish order block can be seen as a low-risk buying opportunity.
  • Different traders may have different interpretations based on their preferred levels or perspectives on price analysis.

New Section

In this section, the speaker discusses the mean threshold and market expectations.

Mean Threshold and Market Expectations

  • The market is likely to stay above the mean threshold.
  • Anticipate a shallow retracement in the order block.
  • Look at the open or high for entry and set stop below the propulsion candle or mean threshold.
  • Expectation of a larger bounce at 12,965 level.

New Section

The speaker talks about profit-taking, zooming out, and using fractals for analysis.

Profit-Taking and Zooming Out

  • Take profits when price reaches equal highs after a run-up.
  • Leave some position open as it's uncertain how much more profit can be gained from that level.
  • Zoom out to get a broader perspective on the chart.

New Section

The speaker discusses market behavior based on support/resistance ideas and weakness in the dollar.

Support/Resistance Ideas and Weakness in Dollar

  • Market drops down into distribution levels after consolidation.
  • Look for areas where buying occurred previously for potential rallies.
  • Anticipate weakness in the dollar for price expansion.

New Section

The speaker analyzes equal highs and reversals in the dollar index.

Equal Highs and Reversals in Dollar Index

  • Equal highs are observed in price action.
  • Consolidation followed by a rally towards equal highs indicates potential reversal points.
  • Daily equal high levels are important to watch for sweeps.

New Section

The speaker explains how previous models were calibrated to predict price movements.

Calibration of Models for Price Movements

  • Previous models helped calibrate price levels for market behavior.
  • Market structure, consolidation, and distribution patterns are observed.
  • Low-risk sell opportunities can be identified based on these patterns.

New Section

The speaker discusses the likelihood of the market reaching certain price ranges.

Likelihood of Market Movement

  • Market is likely to reach specific price ranges based on previous patterns.
  • Areas of accumulation and distribution are important to consider.
  • Fair value gaps and open areas can influence future price movements.

New Section

The speaker emphasizes the importance of understanding time frames and trading styles.

Understanding Time Frames and Trading Styles

  • Patterns observed in different time frames help determine trading styles.
  • Stick to the chosen trading style and mindset to avoid being influenced by short-term fluctuations.
  • Take position exits at appropriate levels based on the chosen trading style.

New Section

The speaker provides examples of pattern observations on smaller time frames.

Pattern Observations on Smaller Time Frames

  • Consolidation followed by a rally towards equal highs indicates potential reversal points.
  • Distribution after a market structure break clears out equal lows, indicating liquidity drawdown.
  • Understanding patterns helps determine trade duration and mindset.

New Section

The speaker concludes by encouraging viewers to review the mentorship content for further insights.

Reviewing Mentorship Content

  • Review classifications for time frames and corresponding trading styles.
  • Use mentorship content to gain more insights into pattern analysis.
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.