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ICT 2024 Mentorship \ NQ High Resistance Liquidity Conditions Tape Reading \ October 07, 2024
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ICT 2024 Mentorship \ NQ High Resistance Liquidity Conditions Tape Reading \ October 07, 2024

Market Opening Analysis and Strategies

Initial Setup and Market Conditions

  • The speaker greets the audience, confirming audio clarity and expressing hope for a good weekend.
  • The opening range gap high is set at 2222.5, establishing an initial bias for trading.
  • No significant news is expected today or tomorrow; however, CPI and PPI reports later in the week may introduce volatility.

Liquidity Focus

  • The speaker highlights a mid-gap target around 2179.5, indicating areas of liquidity to monitor on a five-minute chart.
  • Two primary liquidity pools are identified: one for buying and another for selling, which will guide trading decisions.

Trading Strategy Insights

  • The speaker mentions feeling unwell but aims to keep commentary minimal while focusing on market movements.
  • A preference is expressed to maintain focus on the 15-second chart for clearer insights into price action.

Fair Value Gaps and Market Behavior

  • Observations indicate that no one-minute fair value gap has been established yet; attention remains on the 15-second chart.
  • Full gap closure is noted as being significantly higher than current levels; mid-gap serves as an initial draw within the first half-hour of trading.

Caution in Trading Decisions

  • The speaker advises patience, suggesting traders should wait before making moves until clearer signals emerge from market behavior.
  • Emphasis is placed on waiting for price action to climb above key levels before considering trades into fair value gaps.

Monitoring Price Action Dynamics

  • A cautious approach is recommended due to disorganized market conditions post-weekend; traders should be slow to act.
  • Observations about how price interacts with fair value gaps suggest potential upward movement if certain conditions are met.

Closing Thoughts on Market Engagement

  • As the opening range nears its conclusion, there’s still no compelling reason to enter trades prematurely.

Market Analysis and Trading Strategies

Fair Value Gaps and Market Positioning

  • Discussion on the importance of fair value gaps in trading, noting that despite some price movement, no significant trades were executed.
  • Analyzes potential market positions for traders, highlighting the perspective of short sellers and long buyers during breakout scenarios.
  • Emphasizes patience in trading; advises waiting for clearer setups rather than engaging in uncertain market conditions.

Morning Session Observations

  • Notes that the current morning session lacks clear trading opportunities, suggesting a more favorable environment may develop later in the day.
  • Reiterates that there have been no missed opportunities or losing trades so far, indicating a calm market atmosphere.

Price Action Analysis

  • Examines price action within a 15-minute timeframe, identifying challenges due to range-bound movements affecting trading decisions.
  • Discusses bearish indicators from an inversion fair value gap on the 15-minute chart and its implications for liquidity targeting.

Liquidity Conditions and Trading Strategy

  • Differentiates between low resistance and high resistance liquidity run conditions; notes current high resistance is complicating trade execution.
  • Advises against impulsive trading based solely on setups without confirming high probability conditions.

Teaching Approach to Trading

  • Highlights the importance of teaching patience and confidence in trading strategies to avoid anxiety associated with potential losses.
  • Discusses upcoming market movements related to opening range gaps and their significance for afternoon trading strategies.

Afternoon Trading Considerations

  • Outlines potential scenarios for afternoon trades based on previous price actions; emphasizes careful observation before making moves.

Understanding Market Dynamics in High Resistance Liquidity Runs

Inefficiencies in Market Delivery

  • The speaker highlights inefficiencies in market delivery due to high resistance liquidity runs, which lead to a lack of precision. This results in the market not returning to fair value gaps as expected.
  • There is mention of volume imbalances that could cause price spikes, indicating a give-and-take dynamic that complicates trading strategies during these conditions.

Challenges of Trading in High Resistance Conditions

  • Trading under high resistance liquidity conditions can be uncomfortable, especially when building large positions. The market tends to pull back deeply after making highs, creating anxiety for traders.
  • In contrast, low resistance liquidity runs allow for smoother trades where the market moves favorably without causing anxiety or discomfort.

Observations on Volume and Price Action

  • The speaker emphasizes the importance of monitoring volume imbalances and relative equal highs as indicators for potential price movements.
  • A specific candlestick's closing price is noted as significant; it rallied after hitting a precise level just above a previously identified volume imbalance.

Implications of High Resistance Liquidity Runs

  • The absence of precision during high resistance liquidity runs means that desired price actions may be deferred or experience deeper retracements than anticipated.
  • The speaker expresses a desire to see specific fair value gaps filled but acknowledges that such occurrences are less likely under current market conditions.

Strategy Adjustments Based on Market Conditions

  • Despite not reaching initial targets within the first 30 minutes, the speaker advises maintaining focus on mid-gap levels while avoiding shorting opportunities due to high resistance conditions.
Channel: The Inner Circle Trader
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.