ICT Emini S&P 500 Review / January 03, 2023
Market Analysis and Trading Strategy Overview
Anticipation of PMI Number Release
- The speaker discusses the anticipation of the PMI number release at 9:45, expecting market movement leading to a potential sell-off.
- Emphasizes the importance of waiting for this news rather than jumping into trades at 9:30, highlighting patience in trading.
Market Structure and Imbalances
- Analyzes the one-hour chart, noting that it did not reach employment balance levels, indicating a breakdown after testing buy/sell liquidity.
- Shifts focus to the 30-minute chart to identify clear imbalances and confirms a lack of upward movement above previous highs.
Fair Value Gaps and Trading Decisions
- Discusses fair value gaps on the 15-minute chart, indicating areas where price may retrace before moving lower.
- Highlights market behavior around key levels (e.g., 3,900), suggesting potential short positions based on observed patterns.
Institutional Order Blocks and Market Dynamics
- Explains how certain lows can indicate institutional overflow entry points, which are critical for understanding market structure changes.
- Introduces concepts like mean threshold and order blocks as essential tools for identifying trading opportunities.
Execution of Trades Based on Technical Analysis
- Describes executing trades based on identified fair value gaps and bearish order blocks while emphasizing precision in trade entries.
- Notes that successful trading requires personal engagement with charting rather than relying solely on others' analyses.
Importance of Active Participation in Trading
- Stresses that traders must actively mark their charts to understand market dynamics better; passive approaches hinder learning.
- Defines terms like "mean threshold" and "consequent encroachment," linking them to practical trading strategies for future mentorship discussions.
Scalping vs. Long-Term Strategies
First Trading Day Insights
Market Analysis and Initial Trades
- The speaker discusses their trading strategy on the first day of the year, focusing on short positions taken at two fair value gaps, particularly one at 38.60, anticipating a downward trend.
- They mention waiting for market behavior after failing to breach the 39.05 level, indicating a cautious approach to market shifts and structure changes below 38.72 and 38.73.
- A third entry was made at the top of the orange fair value gap (38.60), with expectations of price movement towards lower levels around 38.39 and a quarter.
- The speaker emphasizes monitoring price action on a 30-minute chart to ensure it remains below key levels; if it rises above these levels, they plan to close trades.
Key Trading Levels and Expectations
- The importance of maintaining "heaviness" in price is highlighted; this indicates difficulty in rallying higher, which aligns with their bearish outlook.
- They express intent to take partial profits if prices drop below 38.42.50 while also noting rejection at the anticipated resistance level of 39.20 due to daily volume balance considerations.