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ICT Mentorship Core Content - Month 11 - Forex & Currency Mega-Trades
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ICT Mentorship Core Content - Month 11 - Forex & Currency Mega-Trades

Introduction

The instructor introduces the lesson and reminds viewers that everything he teaches is for informational purposes only.

ICT Mega Trades

The instructor discusses Mega trades, which are longer-term trades that can go on for a while. He explains that these trades hinge on the concept of quarterly shifts and seasonal tendencies.

Quarterly Shifts

  • Mega trades hinge on the concept of quarterly shifts.
  • Every three months or so, the markets will form an intermediate-term turning point.
  • This effect is crucial to finding the next explosive market moves.

Seasonal Tendencies

  • Seasonal tendencies are important for Mega trade selections.
  • They are not be-all-end-all but can serve as precursors to what may unfold in actual prices.
  • Ideally, seasonal tendencies should be in alignment with other supporting factors when selecting a trade idea.

The US Dollar Index

The instructor emphasizes the importance of monitoring the US dollar index when trading Forex or currencies.

  • Every significant mover in Forex or currency markets will have its roots in the price action of the US dollar index.
  • When searching for Mega trades and currencies, it's essential to consider whether they align with support from the dollar index.

Focusing on Majors

The instructor advises traders to focus on major currency pairs when selecting Mega trades.

  • Traders need to focus on seven major currency pairs: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/CHF, USD/CAD, and USD/JPY.
  • All major moves can be determined with these seven pairs.

Lessons on Forex Trading

In this section, the speaker discusses important lessons on Forex trading.

Importance of Crosses

  • Crosses provide avenues for trading mega trades for Forex pairs.
  • Even if not actively traded, it is essential to take a look at them.

Focus on Futures

  • Majors have Futures contracts that trade respectively and aid in analysis for searching explosive market moves.
  • The respective futures contracts are Euro dollars, British pounds, Australian dollars, New Zealand Dollars, Swiss Francs, Canadian dollars and Japanese Yen Futures contracts.

Relative Strength Analysis

  • Two approaches to performing relative strength analysis:
  • Comparing respective highs and lows of underlying Futures price action
  • Using an overlay tool with mt4 for 4X markets to measure respective highs and lows
  • Focus on markets that have a willingness to go higher and hold their lows. These are relatively strong markets or currencies.
  • Look at the ability of these futures contracts to break through old highs or premium arrays.

Overlay Tool with MT4

  • Overlay multiple pairs on one chart with the mt4 platform to see where there's accumulation based on smt Divergence across all of the pairs.
  • If weak dollar is expected, look for pairs to have higher lows as long as the base currency is the foreign currency and the quoted price is in dollars.
  • For dollar-based crosses against quoted pairs like dollar Yen or dollar CAD invert it when you do the overlay.

Conclusion

  • Use both approaches interchangeably throughout the years.
  • Blend them together so they should agree with everything you're expecting.
  • Chances are you probably got a tiger by the tail.

Commodity Top-Down Approach

In this section, the speaker discusses how to filter out the strongest and weakest currencies using relative strength analysis.

Filtering Strongest and Weakest Currencies

  • Study Forex pairs respectively.
  • Look at the direction of the dollar index to support strong or weak currencies.
  • Use relative strength in each currency to determine which is the actual strongest and weakest.
  • Filter leadership currencies by finding the strongest of the strongest and weakest of the weakest.

Trading Strategies

  • Trade underlying Futures contracts or use options to trade those Futures contracts.
  • Use Forex approach and Widow out a mega trade by using crosses.

Analysis of Futures Charts

In this section, the speaker analyzes several Futures charts for different currencies.

Australian Dollar

  • Has been in a nice uptrend from a relative strength standpoint.
  • Finding support at discount arrays, creating higher highs, breaking through old premium arrays, and having expansion moves on the upside.

Euro

  • Moving up with short-term consolidation but overall firm to bullish.

British Pound

  • Been in a range and not considered a relative strength leader on the upside.

Japanese Yen

  • Been in a larger trading range but met resistance in June and sold off after filling fair value gap at 92 big figure.

Swiss Franc

  • Firm to bullish but not exciting on upside so does not meet criteria for mega trade.

Canadian Dollar

  • In a wonderful uptrend on the Futures standpoint, finding support at discount arrays, breaking through old highs, smashing through all premium arrays, and having expansion moves on the upside.

Identifying Strong and Weak Currencies

In this section, the speaker discusses how to identify strong and weak currencies in order to find a mega trade idea using Forex.

Strong and Weak Currencies

  • The Australian dollar is a relatively strong currency compared to the New Zealand dollar due to its institutional order flow for upside.
  • The leadership currencies are the Australian dollar and Canadian dollar for strong upside, while the Japanese Yen is a weak currency.

Blending Strong and Weak Currencies

  • To use this information, blend a strong currency with a weak currency to find a mega trade idea in the Forex market.
  • For example, go long on both Canadian dollar and Australian dollar futures markets or use options long calls on both. Alternatively, find a pair that makes these two currencies cross in the Forex market.
  • Blend the Canadian dollar with the Japanese Yen as an example of pairing a strong currency with a weak one.

Trading Crosses

  • Trading crosses can be beneficial if you understand what you're looking at on an intermediate-term basis. This approach is how banks break down large institutions work through the currency board to find out how crosses will work as a market maker.
  • Pairing up very strong currencies against weaker ones can lead to big movers blast off type moves where price swings are not lethargic but rather growing quickly.

Examples of Strong Currency Pairs

In this section, the speaker provides examples of strong currency pairs that traders can use for mega trades.

Australian Dollar vs. Japanese Yen

  • The Australian dollar is a strong currency compared to the Japanese Yen, which is weak.
  • Pairing up these two currencies can lead to big movers blast off type moves where price swings are not lethargic but rather growing quickly.

Canadian Dollar vs. Japanese Yen

  • The Canadian dollar is a strong currency compared to the Japanese Yen, which is weak.
  • Pairing up these two currencies can lead to big movers blast off type moves where price swings are not lethargic but rather growing quickly.
Playlists: 2017 ICT Private Mentorship Core Content Month 11
Video description

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