2022 ICT Mentorship Episode 25

Introduction

The speaker opens the video with a brief monologue, reminding viewers of the promises made in previous mentorship sessions and encouraging them to keep those promises in mind during this lesson.

Promises Made

• The speaker promised specific logic that would repeat algorithmically.

• There would be specific rules implied that viewers would have to follow.

• The basis of teaching was time and price.

Repeating Themes

The speaker discusses how certain themes will repeat throughout the lesson, and encourages viewers to keep these promises in mind as they learn.

Repeating Themes

• Certain themes will repeat throughout the lesson.

• Viewers should keep the promises made earlier in mind while learning.

Learning vs. Profitability

The speaker cautions against rushing into trading for profit before fully understanding the concepts being taught.

Rushing into Trading

• Viewers should not rush into trading for profit yet.

• Some viewers are already making money, but this is not encouraged.

• There are still things to learn even when you think you've learned everything.

Proof of Understanding

The speaker emphasizes his unique approach to teaching and trading, which involves calling trades before they happen based on an understanding of logic and algorithms.

Unique Approach

• Speaker's approach involves calling trades before they happen based on an understanding of logic and algorithms.

• Speaker's vocabulary is unique to his approach.

• Other traders may only demonstrate hindsight or sell courses to neophytes.

Teaching for Free

The speaker emphasizes that he teaches for free because he loves doing it, not because he needs money. He also expresses interest in a particular female YouTuber who is trying to make a go of trading.

Teaching for Free

• Speaker teaches for free because he loves doing it.

• Speaker has already made millions of dollars and does not need money.

• Speaker is interested in a particular female YouTuber who is trying to make a go of trading.

Fatherly Perspective

The speaker explains that he looks at all his viewers as his children, and expresses interest in the development of each one. He also discusses how he wants to inspire his daughter to trade on her own.

Fatherly Perspective

• Speaker looks at all viewers as his children.

• Speaker is interested in the development of each viewer.

• Speaker wants to inspire his daughter to trade on her own.

Commenting on Other Channels

In this section, the speaker talks about their reluctance to comment on other people's channels due to the overwhelming response they receive from viewers. They also apologize for any negative impact that may have been caused by their appearance in other channels' comment sections.

Reluctance to Comment

• The speaker does not want to appear in other channels' comment sections.

• When they do appear, there is a rush of people praising and high-fiving them.

• The speaker finds this behavior rude and inappropriate.

Apology

• The speaker apologizes for any circus-like environment that may have been created by their friends, associates, or students in other channels' comment sections.

• They clarify that they only visit other channels if they find the content useful or enjoyable.

Analyzing E-Mini S&P Futures Chart

In this section, the speaker analyzes the price action of the E-Mini S&P Futures June 2022 delivery contract for the daily chart. They discuss order blocks and explain why it is important to focus on fair value gaps.

Daily Chart Analysis

• The speaker asks viewers to write down notes and pay attention as they analyze the daily chart.

• They remind viewers that everything taught in this video works in forex as well.

• Viewers are advised not to ask questions already answered in previous videos.

• The speaker reminds viewers of a previous discussion about a specific order block being a catalyst for setting up a future move.

• They explain that the high of that candle should not be pierced with a bearish order block.

Order Blocks and Fair Value Gap

• Viewers are directed towards previous videos where order blocks were introduced.

• The fair value gap is emphasized as an essential concept for new traders to understand.

• Understanding time frames and price action is crucial for trading.

• Trading view is recommended as a platform to practice chart analysis.

Basic Understanding of Technical Analysis

In this section, the speaker discusses the importance of understanding technical analysis and how it can be applied in trading. They also clarify that their mentorship program is designed for beginners.

Introduction to Technical Analysis

• The speaker emphasizes the importance of understanding technical analysis.

• They clarify that their mentorship program is designed for beginners who are new to trading.

• Viewers are advised to start with the basics, such as understanding time frames and price action.

• The speaker recommends using Trading View as a platform to practice chart analysis.

Notable Mentions

• The speaker mentions that they will not teach what a pip is or how to calculate the smallest fluctuation in price since those things can be googled.

• They mention that there are obvious things that anyone can look up online.

• Viewers are reminded that this teaching series is an introductory version of technical analysis.

Understanding Seasonal Tendencies

In this section, the speaker explains how seasonal tendencies can influence market movements and how traders can use this knowledge to their advantage.

Seasonal Tendencies

• Seasonal tendencies are times in a year where markets or specific asset classes will move generally.

• These price swings follow a seasonal tenancy that means they usually happen.

• May tends to be a month where the market in index futures and stocks they generally drop.

• Going into every single year about the last week or so of April going into the month of May there's usually a tendency for these markets specifically the S&P, NASDAQ, Dow, Russell that group of markets tends to be weak.

Using Seasonal Tendencies

• By studying old data and forward testing it, traders can learn a lot about price action by using seasonal tendencies as a roadmap to consistency.

• This information is useful when combined with other trading strategies such as identifying bearish order blocks.

Smart Money Trading Strategies

In this section, the speaker discusses smart money trading strategies and how traders can use them to identify potential market movements.

Smart Money Trading Strategies

• Smart money sold to buy stops when prices were high and then bought back at lower prices when prices dropped.

• Large fund traders have models that want to capture these types of moves and expect things like highs to be taken out before they start trailing their stop loss.

• Retail traders are likely to have many times their stop losses in the same area that large funds will.

Liquidity Influence on Trading Strategies

• Traders aim for sell side liquidity below certain levels because they expect things like highs to be taken out before they start trailing their stop loss.

• Retail traders have much smaller liquidity than large fund traders, which makes their stop losses irrelevant in the grand scheme of things.

Investigating Trading Strategies

In this section, the speaker encourages traders to investigate the trading strategies he has discussed and to test them for themselves.

Investigating Trading Strategies

• The speaker encourages traders to investigate the trading strategies he has discussed and to test them for themselves.

• If these strategies hold up, they can be used as a roadmap to consistency.

Understanding Liquidity and Market Efficiency

In this section, the speaker explains how to analyze liquidity in the market and how it affects trading decisions.

Analyzing Liquidity

• The speaker emphasizes that analyzing liquidity is more important than looking at patterns or indicators.

• The speaker acknowledges that there will be losing trades but understanding liquidity can help traders avoid toxic thoughts and make better decisions.

• The speaker clarifies that understanding liquidity does not guarantee profitability or a high rate of return.

Applying Liquidity Analysis to Trading

• The speaker notes that his model for analyzing liquidity can be applied to different time frames, including swing trading.

• The speaker advises traders not to rush their development and enjoy the process of learning about liquidity analysis.

Using Open High Low Close (OHLC) Data for Trading

In this section, the speaker discusses using OHLC data from the last three days to identify fair value gaps in the market.

Fair Value Gaps

• The speaker reminds viewers of his previous advice to study OHLC data from the last three days.

• The speaker introduces the concept of fair value gaps and explains that they are unique and powerful formations in the market.

• The speaker notes that fair value gaps are specific in where they form and provides criteria for identifying them.

Understanding Bias and Avoiding Picking Tops and Bottoms

The speaker advises against trying to pick tops and bottoms in bearish markets. Instead, traders should focus on the middle of the move.

Avoid Trying to Pick Tops and Bottoms

• Trying to pick tops and bottoms is a fallacy that has caused many traders to lose money.

• Traders should avoid trying to call long-term lows while markets are bearish.

• There is a lot of meat between major turning points, so traders can afford to be wrong at the end.

• Once you're wrong, it'll be obvious, and then you can get in on the other side.

Analyzing Price Action Fractals

The speaker discusses analyzing price action fractals on an hourly chart.

Analyzing Price Action Fractals

• A fractal is a piece of price action that's doing something worth paying attention to.

• On an hourly chart, each candle shows the highest high and lowest low of each individual hour interval.

• Break daily ranges up by day starting at midnight crossing over into a new day.

• Indecisive candles on daily charts may look different when viewed on an hourly chart as price action fractals.

• Frame out relative equal highs.

Understanding Smart Money Trading

In this section, the speaker discusses how smart money operates in the market and how to identify a bearish bias.

Identifying a Bearish Bias

• Smart money enters the market by utilizing buy side liquidity to set up an idea for shorting.

• When operating with a bearish bias, it is important to look for trigger events that indicate a good time to short.

• A nice short-term low can be used as a partial offset for a short position.

• Keying off of previous levels can help identify where to enter or exit positions.

Utilizing Liquidity Pools

• Buy side liquidity is often utilized first when running the market up to premium prices before seeking out sell side liquidity at discounted prices.

• The second pool of liquidity is sell side liquidity which is used by smart money to distribute their shorts below certain levels.

Rebalancing Monday's Daily Range

• The rebalancing of Monday's daily range can trick people into thinking that the market has made its low and will continue going up. However, it has only gone up to a logical level on that daily timeframe that rebalances all of the sell-off on Monday.

• The algorithm starts seeking liquidity as early as 8:30 am and may wait until 9:30 am before hitting certain levels.

Conclusion

• By understanding how smart money operates in the market, traders can make more informed decisions about when and where to enter or exit positions.

Understanding Power Three

In this section, the speaker explains how to use the opening price at 8:30 am to identify a logical level for accumulation and how it creates a pattern that leads to market structure shift.

Identifying Logical Levels

• Use the opening price at 8:30 am as a logical level for accumulation.

• The rally should take place above that level.

Market Structure Shift

• The logical level creates a pattern that leads to market structure shift.

• This shift is characterized by displacement and distribution to the downside attacking a discount array.

Understanding Time and Price

In this section, the speaker emphasizes the importance of understanding time and price when analyzing candlestick charts.

Analyzing Candlestick Charts

• Analyze candlestick charts relative to time and price.

• Doing so provides more clarity and takes away confusion.

Midnight New York News Embargo

In this section, the speaker discusses how midnight New York news embargo affects trading.

Algorithmic Trading

• Equal highs at 8:30 am start algorithmic trading which runs for premium due to bearish bias.

• Expect run higher from 8:30 am up into Friday's low at 9:30 am when bearish.

Manipulation Time

• Manipulation time is between 8:30 am and 9:30 am when equity markets open.

• This is when the market creates an opportunity that looks like it's going to do something but generally does the opposite.

Identifying Displacement Price Leg

In this section, the speaker explains how to identify displacement price leg and shade it while learning.

Displacement Price Leg

• Shade displacement price leg while learning.

• Break down displacement price leg into lower time frames.

Identifying Fair Value Gap

• Use Fibonacci retracement tool on high and low of displacement price leg to identify fair value gap.

• 40 44 and a half level is equilibrium or 50% of the range between high and low.

Resistance and Support

The speaker discusses resistance and support levels in trading.

Understanding Resistance and Support

• When a resistance level is broken, it becomes a support level.

• If the price breaks down from the support level, it may start running again.

• Even if the price goes past a resistance level, it may still go higher.

Fair Value Gap

The speaker explains what to look for in a fair value gap.

Identifying Fair Value Gaps

• Look for a fair value gap in the shaded area on the chart.

• A fair value gap occurs when there is an imbalance between buyers and sellers.

• Do not sell at a discount; wait until the price reaches a premium of 40.44 or higher based on the price swing.

Expectations in Trading

The speaker discusses expectations when trading with live money.

Expectations When Trading with Live Money

• Expect to lose money when trading with live money.

• There is no secret recipe to avoid losing trades.

• Some traders take their expectations to an extreme by wanting to become rich quickly.

Displacement Leg and Fair Value Gap

The speaker talks about displacement leg and fair value gaps on different charts.

Analyzing Displacement Leg and Fair Value Gap on Different Charts

• On the three-minute chart, check if there is a fair value gap inside the pink shaded area.

• Drop down into your two-minute chart to see if there is any fair value gap present.

• If you see short-term lows being broken, this could be considered as displacement leg creating a fair value gap.

• When entering a trade, place your stop loss above the candle that creates the fair value gap.

Holding with Risk

The speaker emphasizes the importance of holding trades with a certain measure of risk.

Holding Trades with Risk

• Hold trades with a certain measure of risk.

• Rushing to get out of marginally profitable trades is not advisable.

• Do not open a trade and put a stop above it and watch it go down.

Stop Placement

In this section, the speaker talks about stop placement and how to strangle a position. He also explains when to move your stop and how to use micro account positions.

Using Candle for Fair Value

• Use the candle that creates the fair value.

• Place your stop just above the high of that candle.

Using Swing High

• If you want to use a nice handsome ample stop, use a swing high.

• Micro account positions are available if you don't have enough equity.

Moving Your Stop

• Wait for a larger shift in structure before moving your stop.

• Move your stop down when the low is taken out.

• Accept that you may be wrong if it stops you out.

Trading in Different Sessions

In this section, the speaker talks about trading in different sessions and which pairs tend to have more movement during certain periods.

Trading in Asia Session

• Look for patterns forming on one through five-minute charts in the Asian session.

• Trade yen pairs, New Zealand dollar, and Australian dollar during those periods.

Illiquid Times

• The Asian session is one of the most illiquid times for trading.

• Let the market create those periods of the day where many traders are starting early.

Algorithm Operation Time

• Algorithms operate on New York time and begin at midnight period.

• Wellington does not start the cycle.

Understanding the Market

In this section, the speaker discusses how to approach the market and make profitable trades.

Identifying a Setup

• The model identifies a setup moving back to a rebalance of Monday's price range back up to Friday's low hitting that level there.

• The setup is created at the time elements in the same way as taught in the series.

• The market breaks down and pairs up with a sell-side liquidity smart money sells short here and then adds to it here.

Trading During Lunch Hour

• Trades are made during lunch hour, and limit orders would be filled during this time.

• The only thing about this day that was not liked was that it did not deliver movement ahead or right at 12 o'clock.

Algorithmic Trading

• The algorithm goes up there whether there is sufficient volume or not.

• These markets are controlled, rigged, and algorithmically driven.

• There is no need to buy other people's courses; what is being shown here is easy and logical.

Simplifying Trading Approaches

• It is essential to take what makes sense one pattern one setup applied time and price theories around algorithmic ideas.

• Look for that one setup and submit to it just that and make it very simple.

Finding Your Trading Niche

In this section, the speaker discusses how people can find their own niche in trading by investing time in reading charts, listening to audio commentary, and doing homework assignments.

Investing Time in Learning

• Many people around the world dive into trading and find their own niche in it.

• It only takes time to invest in reading charts, listening to audio commentary, and doing homework assignments of backtesting and looking at it.

• People can do it; they just haven't done the proper things in the right order.

Simplification of Trading Model

• The speaker has simplified a specific trading model that is better than any other model he has done before.

• This model is stripped down and made very simple with the expectation that even his daughter could learn it.

• This is the easiest ICT application you're ever going to get.

Importance of Following Instructions

• If you give this six months of study seriously rolled up diligently going in every single day backtesting and looking at it, I am confident that you will have found your model.

• If you're trying to apply other things like Bollinger Bands and garbage like that, you're not using the model.

• Just do what he's telling you to do and avoid what he's telling you to avoid.

Understanding Market Liquidity

• The speaker explains how his simplified trading model helps traders understand market liquidity better.

• Smart money looks at liquidity when making trades rather than white golf schematics.

• The market is designed to allow smart money to fleece the uninitiated.

Conclusion

In this section, the speaker concludes by inviting private members of his mentorship group to tell everyone in the comment section that this trading model has been spelled out very simply and plainly better than any other model he has done before. He also encourages traders to invest time in learning and following instructions.

Final Thoughts

• The speaker invites private members of his mentorship group to tell everyone in the comment section that this trading model has been spelled out very simply and plainly better than any other model he has done before.

• The speaker emphasizes that if you give this six months of study seriously rolled up diligently going in every single day backtesting and looking at it, you will have found your model.

• The simplified trading model is visually pleasing, role-based, and helps traders understand market liquidity better.