VIDEO
HIGHLIGHT
Log InSign up
2022 ICT Mentorship Episode 37
SummaryTranscriptChat

2022 ICT Mentorship Episode 37

Introduction

The speaker introduces the episode and shows a daily chart for the E-mini S&P June contract for 2020.

Market Analysis

The speaker discusses the fair value gap and how it affects market trading. They also discuss short-term highs and how they can impact market bias.

Fair Value Gap

  • The market trades down to fill in the fair value gap.
  • Once filled, the market rallies.

Short-Term Highs

  • A short-term high is expected to be reached.
  • If above the fair value gap high, an attempt to reach that level is expected.

Non-Farm Payroll Day

The speaker advises against speculating on non-farm payroll day due to its volatility. They suggest studying price action instead of trying to trade it.

Studying Non-Farm Payroll Day

  • Determine what side of liquidity will be reached before news release.
  • Watch what happens on a one or five-minute chart when volatility hits.
  • Study non-farm payroll day for liquidity purposes only.

Trading Responsibly

The speaker emphasizes responsible trading and protecting oneself from volatile markets. They suggest stopping trading by Wednesday of each week if something has been profitable up until that point.

Responsible Trading

  • Avoid big days like FOMC and non-farm payroll weeks.
  • Stop trading by Wednesday of each week if something has been profitable up until that point.

Focusing on Precision

The speaker discusses the importance of focusing on days where they have an advantage and can trade with precision.

Advantages of Focusing on Certain Days

  • Trading without disadvantages allows for more precision.
  • Not all days are equal in terms of trading opportunities.
  • Focusing on advantageous days increases the chances of success.

Understanding Risk and Market Levels

The speaker explains the importance of understanding risk and market levels when trading.

Importance of Market Levels

  • Two blue lines represent fair value gap on daily chart.
  • Red line represents short term high.
  • Understanding these levels is important for successful trading.

Analyzing Price Action

The speaker analyzes price action to identify potential market movements.

Bullish Market Structure

  • Market drops to fair value gap low, consolidates, then drops again before taking out short term high.
  • This shift in market structure is bullish and could lead to a run on the buy side.
  • Small fair value gap should be considered before going up further.

ICT Power 3 Pattern

The speaker introduces the ICT Power 3 pattern and explains how it can be used to analyze price action.

Understanding the ICT Power 3 Pattern

  • Accumulating, manipulating, distributing pattern seen in price action.
  • Opening creates low of day, followed by rally.
  • Can be seen on lower time frames but requires understanding of higher time frame levels.

Engaging with Precision

The speaker discusses why they engage with trades even when precision may not be at its highest.

Importance of Engaging with Trades

  • Precision drops on certain days, but engaging with trades can be a valuable teaching tool.
  • Understanding why precision is lower on certain days can lead to better trading decisions in the future.

Importance of Discipline in Trading

In this section, the speaker emphasizes the importance of discipline in trading and shares his personal experience as a mentor teaching others how to read price action.

Trusting Precision

  • The speaker emphasizes that traders should lower their expectations during certain times of the month.
  • He advises traders not to trade from Sunday's weekly open until Wednesday's New York session begins if they haven't made any profits by then.
  • The speaker explains that exercising discipline and patience can be rewarding psychologically and emotionally.

Learning from Mistakes

  • The speaker encourages listeners to learn from his mistakes and listen to his advice.
  • He shares a recent short position he took and discusses the setup for it.

Twitter Discussion on Fair Value

In this section, the speaker discusses a Twitter discussion he had with followers about fair value in trading.

Fair Value Discussion

  • The speaker explains that he was shopping when the market dropped into an area where he expected it to go.
  • He asked his Twitter followers to locate fair value above market price on a five-minute chart.
  • The speaker provides his Twitter handle for those interested in following him but also suggests looking at his tweets without joining the platform.
  • He notes that sometimes people don't get notifications for posts on YouTube's community tab, so checking Twitter is more reliable.

Bagging and Tagging

In this section, the speaker discusses how his prediction of fair value played out in the market.

Market Movement

  • The speaker notes that shortly after his Twitter discussion on fair value, the market moved up to that level.
  • He suggests that if the market moves above that level, it could draw on liquidity at a higher price.

Understanding Price Movements

In this section, the speaker explains that he is not giving trade signals but rather trying to inspire viewers to look at price movements in real-time and study how they develop before they are reflected on charts.

Studying Market Price

  • The speaker encourages viewers to study market price and how it gets to a certain level.
  • He advises viewers to take notice of specific things and see if they deliver by a certain time.
  • The speaker mentions that when he comments on something on Twitter, it immediately runs towards it.

Analyzing Chart Patterns

  • The speaker shows an example of a chart pattern and clarifies that it is not a trade entry or exit.
  • He explains how viewers can journal their observations after the fact by marking up their charts with annotations.
  • The speaker provides details about the pattern's delivery expectations and how long it took for them to be fulfilled.

Positive Self-Talk

  • The speaker emphasizes the importance of positive self-talk while journaling observations.
  • He highlights the significance of reflecting upon journal entries positively and keeping them fact-oriented.

The Importance of Chart Logging

In this section, the speaker emphasizes the importance of chart logging and how it can help traders improve their skills.

Benefits of Chart Logging

  • Chart logging helps traders retain information and refer back to previous weeks or months.
  • It may seem boring at first, but chart logging is essential for learning to see patterns in real-time trading.
  • There are no shortcuts around chart logging. Traders who refuse to do it will fail.
  • Traders must be willing to put in the time and effort required for chart logging if they want to succeed.

Analyzing Market Consolidation

In this section, the speaker analyzes market consolidation during the New York lunch hour.

Short-Term Low and Unfinished Business

  • The market drops back down and takes out a short-term low during the New York lunch hour.
  • There is unfinished business about an old high that was not reached yet.

Stop Run and Re-entry

  • A stop run occurs, followed by a slow drift up that takes out the old high.
  • The only setup that the speaker liked was a short and re-entry.

Fair Value Gap Analysis

In this section, the speaker discusses fair value gap analysis as a potential setup for traders.

Fair Value Gap with Continuation of Upside

  • After forming a low in the afternoon session, there is no model entry for what has been taught so far.
  • The speaker points out a fair value gap in real-time before it happens.
  • This is the framework that traders should have in their journals.

Conclusion

In this section, the speaker concludes the lecture and emphasizes the importance of journaling and learning from past trades.

Importance of Journaling

  • Traders should keep a journal to track their progress and learn from past trades.
  • Everything mentioned in this lecture should be insightful and helpful for traders.
  • The speaker will touch base with traders again next Tuesday.
Playlists: 2022 ICT Mentorship
Video description

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.