ICT Mentorship Core Content - Month 10 - Bond Trading - Basics & Opening Range Concept

ICT Mentorship Core Content - Month 10 - Bond Trading - Basics & Opening Range Concept

Introduction

The instructor introduces the lesson and reminds viewers that this is not trade advice.

Understanding Treasury Bonds

The instructor explains what a treasury bond is, the trading symbol for it, and the delivery contract months.

  • Trading sessions for analyzing the New York session are discussed.
  • The format used to enter charts or pull them up in data is explained.
  • The amount per tick minimum fluctuation and full handle move are discussed.

Bond Opening Range Concept

The instructor discusses the opening range concept for bonds.

  • True day for bond market is 8 A.M to 3 P.M New York time.
  • Opening range between 8 A.M and 9 A.M tends to create the bond market high or low of the day.
  • Liquidity pools are built around this location for stock market opening to be rated.
  • Examples of opening ranges are shown with explanations of how they can be used to identify potential reversals.

Volume Divergence and Opening Range

In this section, the speaker discusses volume divergence and opening range in relation to commodities trading.

High Volume Divergence

  • High volume divergence is an early sign that a rally is weak.
  • The ideal scenario is for volume to have a higher bar on its highest high up moving in the 154.21.
  • When trading commodities, we have a more accurate depiction of buying and selling pressure with real volume.

Bullish Order Block

  • A bullish order block occurs when price makes a subsequent decline backed out into the opening range and then goes into consolidation.
  • The largest volume was seen between 8 AM and 9 AM New York time, which led to a run into the 15426 level.
  • However, there was no greater volume measuring later on in the day in the evening time.

Blending of Trading Techniques

  • There is a blending of things that we've already learned about in Forex trading but now with specific commodities.
  • When looking at the opening range for bonds, it's important to define it using bodies, wicks, previous highs, and lows just like with Asian range perspective in Forex trading.

Bond Market Trading

  • The bond market is one of the least manipulated markets compared to others.
  • It's important to avoid trading ahead of FOMC or interest rate-based reports as they can cause wonky movements in the bond market.

Introduction to Trading the Bond Market

The bond market is a highly liquid asset class that offers opportunities for trading. It can be swing traded, short-term traded, and day traded. This section provides an introduction to the bond market and its basic concepts.

Opportunities for Trading the Bond Market

  • The bond market is highly liquid and offers opportunities for trading.
  • When the bond market starts to move in one direction, it generally stays in that direction.
  • Fair value gaps or Turtle soups using equilibrium ideas can be used to identify trading opportunities.
  • Capturing 5 to 8 ticks as an intraday day trade is a good strategy.

Daily Range Expectations

  • The bond market generally doesn't have a large daily range.
  • A large range day is when you get a full handle or 32 ticks or one thousand dollars per contract.
  • Sustained moves can create opportunities for capturing larger gains.

Liquidity Pools and Fair Value Gaps

  • Liquidity pools, liquidity gaps, fair value gaps all occur in this asset class but not as frequently as in Forex markets.
  • Order blocks may not always go up but instead go sideways or reverse.

Advantages of Trading Bonds

  • The bond market allows for low expectations in terms of daily range while still offering respect of liquidity pools and fair value gaps.
  • Swing trading, short-term trading, and day trading are all viable strategies depending on the conditions of the market.

How to Analyze the Bond Market

  • Pull up barchart.com and look at a 15-minute time frame for one day pull up the zbu-17
  • Keep a running Journal of what the bond Market's doing by changing the year respectively.
  • Looking at the bond market on a day by day basis will increase your price action skills and develop a greater appreciation for this particular asset.

Conclusion

  • The bond market is a good trading market that can be swing traded, short-term traded, and day traded.
  • It offers opportunities for capturing small gains as well as larger gains during sustained moves.
  • Studying the bond market can improve your price action skills and help you develop a greater appreciation for other assets such as commodities, interest rates, gold, foreign currencies etc.
Video description

2017 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in June 2017. 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.