ICT Charter Price Action Model 5 \ Day Trading - Intraday Volatility Expansions

Name: ICT Charter Price Action Model 5 \ Day Trading - Intraday Volatility Expansions
Uploaded: 2024-01-15T23:35:07.000Z
Duration: 1 h 50 min 28 s

Price Action Model Number Five: Intraday Volatility

This section introduces Price Action Model Number Five, which focuses on intraday volatility in day trading. The model emphasizes directional bias and utilizes intraday volatility expansions and session swings.

Internalization of the Model

The speaker shares their expectation for the British pound to draw down into the 1354-1355 area based on daily chart analysis.

The long-term daily interbank liquidity draw is highlighted as the ultimate target for price movement.

The model aims to analyze the effects and influences of other areas of liquidity to identify new trading opportunities.

Flexibility in Trading Sessions

The model is flexible in terms of trading intraday sessions, particularly focusing on the London open Kill Zone and New York open Kill Zone.

While it can be used with the Asian session, its strength lies primarily in the London and New York sessions.

Trading outside these parameters may yield less favorable results.

Comprehensive Approach

Although not day-specific, the speaker prefers trading this model on Monday, Tuesday, or Wednesday.

The model serves as a foundation for understanding other models and filling gaps in trading knowledge.

More than 12 models will be taught over time to provide a comprehensive understanding of price action.

Long-Term Daily Interbank Liquidity Draw for British Pound

This section delves deeper into the long-term daily interbank liquidity draw for the British pound. It explains how this draw influences price direction and sets a collective focus for traders.

Understanding Price Direction

Traders have been informed about where the speaker expects the British pound to drop based on previous market reviews and weekly commentary.

The focus has been on anticipating price direction towards specific levels such as 1354 or 1355.

Effects of Other Liquidity Areas

The model explores the effects and influences of other liquidity areas on price movement.

By analyzing these factors, new trading opportunities can be identified.

Trading Intraday Sessions: London and New York

This section emphasizes the importance of trading intraday sessions, particularly focusing on the London and New York sessions. It highlights the strengths of this approach and advises against trading outside these parameters.

Scope of Intraday Session Trading

The model's framework revolves around trading individual sessions rather than attempting to trade the entire daily or weekly range.

The London open Kill Zone and New York open Kill Zone are primary examples of sessions to focus on.

Traders can also consider using this model with the Asian session if desired.

Optimal Results in London and New York Sessions

The speaker cautions that results may not be as favorable when trading outside the London and New York sessions.

Backtesting may confirm that these two sessions yield better outcomes for this particular model.

Model Flexibility and Preferred Trading Days

This section discusses the flexibility of the model in terms of trading days and provides insights into preferred trading days based on the speaker's experience.

Flexibility in Model Application

While not day-specific, the speaker personally prefers to trade this model on Monday, Tuesday, or Wednesday.

However, traders can adapt it to other days based on their preferences or market conditions.

Reasons for Preferred Trading Days

The speaker shares an example from a specific session to explain why they chose not to hold for the weekly range during that week.

Preferred trading days are meant to provide additional guidance for filling gaps in understanding other models taught previously or in future lessons.

Expanding Understanding Beyond 12 Models

This section addresses the misconception that only 12 models will be taught and emphasizes the continuous expansion of content and understanding.

Ongoing Content Expansion

The speaker clarifies that more information will be provided each year, expanding beyond the initial 12 models.

Traders can expect a variety of approaches to be covered, building on the foundation of price action and mentorship teachings.

Building Personalized Models

Once traders grasp price action concepts and key teachings from the mentorship program, they can develop their own personalized trading models.

The speaker acknowledges receiving emails from traders who have already created their own models based on their understanding.

Focus on Intraday Trading Sessions

This section reiterates the primary focus of the model: intraday trading sessions in London and New York. It emphasizes that the goal is not to trade the entire daily range but rather to capture moves within specific sessions.

Framework for Intraday Trading

The model's framework involves looking for moves in either London or New York sessions.

The speaker presents a chart example with limited information to illustrate how this approach works.

Key Levels for Liquidity Draw

Specific levels such as 13054 or 13055 are mentioned as targets based on rejection blocks and sell stop liquidity pools.

The speaker highlights that these levels may vary slightly but ultimately represent areas of liquidity draw.

Conclusion

The transcript covers Price Action Model Number Five, which focuses on intraday volatility in day trading. It emphasizes trading during specific sessions, particularly in London and New York. Traders are encouraged to understand long-term interbank liquidity draws and consider other areas of liquidity influence. Flexibility in applying the model is highlighted, along with ongoing content expansion beyond the initial 12 models taught.

Deviation from the Mean

The speaker discusses how deviations from the mean are normal and should not cause concern. They explain that it is common for prices to deviate slightly from the expected range, but this does not indicate a problem.

It is normal for prices to deviate from the mean by a few pips.

Anticipating larger deviations of around 12-15 pips outside of the expected range is also acceptable.

These deviations do not break anything and should not be a cause for worry.

Avoid Overthinking Specifics

The speaker advises against overthinking specific details unless explicitly mentioned. They emphasize that unnecessary stress and anxiety can be avoided by focusing only on important instructions.

Only focus on highly specific instructions if explicitly stated.

Do not add unnecessary stress or anxiety by overthinking every detail.

Trust that important information will be clearly communicated when necessary.

Analysis of Daily Chart - British Pound vs US Dollar

The speaker analyzes the daily chart of the British Pound versus the US Dollar, highlighting key levels and potential trading opportunities.

Focus on the daily chart of GBP/USD.

Anticipate a drawdown towards 13504 level with consideration for previous low at 13326.

Sell stops may be placed below 13206 level as breakout targets or for those who went long and experienced drawdown.

A liquidity pool exists below 13206 level, indicating potential market turning points.

Importance of Intraday Trading Opportunities

The speaker emphasizes that while analyzing the daily chart is crucial, one should not overlook intraday trading opportunities. Market turns can create short-term intraday trades and alter weekly ranges.

Daily chart analysis keeps traders aligned with interbank perspective.

Smaller periods can create opportunities for short-term intraday trades.

Market turns do not necessarily imply complete reversals but can lead to new trading opportunities.

Weekly ranges may change based on intraday price action.

Day Trading Intraday Volatility Expansions

The speaker discusses day trading strategies and the importance of volatility expansions when looking for bullish scenarios.

Focus on day trading and intraday volatility expansions.

Anticipate bullish range openings during London or New York sessions.

Target rejection blocks above market price or buy liquidity pools.

Look for equal highs on the daily chart or intraday equal highs as potential targets.

Understanding Session Ranges

The speaker explains how session ranges are determined and visualized, emphasizing the importance of understanding them in relation to trading decisions.

Session ranges represent specific time periods, such as the London or New York sessions.

Visualize session ranges as internal dialogue and candlestick patterns.

Bullish range targets should align with expected upside expansion during the respective session.

Relevance of Daily Chart and Candlestick Patterns

The speaker highlights the significance of daily chart analysis and candlestick patterns in determining daily range expansions.

Daily range expansions follow the direction indicated by institutional order flow.

Anticipate daily ranges expanding in the same direction as the daily draw (institutional price movement).

Profitable setups do not require a closing basis lower than opening; focus on directional expansion instead.

Targeting Equal Highs/Lows for Trading Opportunities

The speaker explains how targeting equal highs/lows on the daily chart or intraday can provide trading opportunities based on anticipated market movements.

Target equal highs on the daily chart or intraday for bullish scenarios.

Consider intraday or intra-week equal highs as potential turning points.

Anticipate market expansion towards these price points based on institutional order flow.

Bearish Scenarios and Sell Stop Liquidity Pools

The speaker discusses bearish scenarios and the importance of identifying sell stop liquidity pools for trading opportunities.

In bearish scenarios, target equal lows on the daily chart or intraday.

Look for sell stop liquidity pools below key levels, such as 13206 in this case.

Rejection blocks can also act as catalysts for downward price movement.

Complementary Model and Filling Gaps

The speaker explains how this model complements other trading models and helps fill gaps in understanding standard deviations and deviation-based strategies.

This model complements existing trading models.

Helps understand when to use different deviation-based strategies.

Provides a comprehensive approach to trading by incorporating various concepts.

Logic Behind Daily Chart Analysis

The speaker explains the logic behind analyzing the daily chart to identify probable drawdowns in liquidity and establish directional bias.

Daily chart highlights probable drawdown areas of liquidity.

Directional bias is established based on where institutional order flow leads price.

Anticipate daily range expansions in the same direction as the daily draw.

Day Trading Based on Daily Draw

The speaker emphasizes that day trading or session trading does not require closing prices to be lower than opening prices. Focus on directional expansion based on the anticipated daily move.

Day trading does not depend on closing prices being lower than opening prices.

Profitable setups are determined by directional expansion aligned with anticipated daily moves.

Trading Intraday Price Moves per Session

The speaker highlights the importance of trading intraday price moves per session, such as during London or New York opens, based on anticipated daily moves.

Trade intraday price moves during specific sessions.

Focus on London or New York opens for potential trading opportunities.

Do not require closing prices to be lower than opening prices for profitable setups.

Daily Range Expansion and Daily Draw

The speaker explains how daily range expansions align with the daily draw (institutional order flow) and provide insights into market movements.

Daily range expansion follows the direction indicated by institutional order flow.

Anticipate daily ranges expanding in the same direction as the daily draw.

Trading opportunities are based on intraday moves aligned with the anticipated daily range expansion.

New Section

The speaker discusses the expected daily ranges in the market and how it can impact trading strategies. They mention using standard deviations with intraday volatility concepts to determine buy setups and expansion objectives. They also discuss the importance of considering the range during specific time periods, such as the Central Bank dealers range, Asian range, and flout count.

Market Price Expectations

Daily ranges are expected to expand higher.

London and New York sessions are expected to move accordingly.

Buy setups and expansion objectives can be found using standard deviations with intraday volatility concepts.

The reverse is true for periods where the daily draw is below current market price.

Central Bank Dealers Range

The ideal consideration is when a clear discernable trading range is found between 4:00 PM and 8:00 PM New York time.

It should not be trending but rather consolidating after an early afternoon consolidation.

If there is expansion between these time periods, it's not recommended to use the Central Bank dealers range.

Asian Range

The ideal consideration is when a clear discernable trading range is found between 8:00 PM and midnight New York time.

Similar criteria for defining a range instead of trending as mentioned in the Central Bank dealers range section.

The ideal range of pips for consideration is 20 or more.

Flout Count

When both the Central Bank dealers range and Asian range are not favorable, it's considered a flout count situation.

The ideal time frame for this count is from 4:00 PM Eastern Time (or 4:00 PM New York time) to midnight New York time.

Expansion on this range can be done in multiples of 50% increments.

Previous Day and Intraday Open Float

Implementation of standard deviations and intraday volatility expansion levels should be coupled with logical levels of short-term liquidity pools.

These levels should overlap with previous day's highs or lows, as well as previous intraday high or low.

Confluences of open float time and standard deviation expansions increase the probability of success.

Focus on Directional Bias and Volatility Expansions

The goal of this model is to focus on periods where a directional bias can be derived.

Target specific times of the day when price is likely to experience volatility expansions in the same direction.

Blend liquidity markers with time of day and standard deviations in intraday volatility expansions.

Using the Model for Scalping Intraday Sessions

The speaker emphasizes that this model primarily focuses on scalping intraday sessions.

Different entry techniques can be used, such as optimal trade entry, turtle soup, trading fair value gaps, etc.

The model provides insights into intraday volatility, daily highs and lows, and weekly highs and lows.

Example: Applying the Model to a Daily Chart

The speaker uses an example on a daily chart focusing on Tuesday's trading session.

They identify a previous low at 13206 pound versus dollar as a potential target level for the next trading day (Tuesday).

However, they mention being mindful of potential consolidation or reversal before reaching that level.

The model primarily focuses on scalping intraday sessions rather than swing trading or short-term trading.

The Benefit of Following Weekly Commentary

The speaker mentions that they have been targeting an equal high for buy set liquidity. They caution that if the price reaches that level, it could create a near-term pause or reversal. They also mention the potential bullishness in cable and weakness in the dollar due to seasonal tendencies.

Key Points:

Targeting an equal high for buy set liquidity.

Caution about potential pause or reversal if price reaches target level.

Mention of potential bullishness in cable and weakness in the dollar due to seasonal tendencies.

Conditions Shown with Dollar Index

The speaker discusses the conditions shown with the dollar index, including a monthly bearish order block starting at 9547. They mention equal highs on June 19th and 20th and reaching up into the monthly order block. They also refer to weekly profiles and a Thursday reversal profile.

Key Points:

Monthly bearish order block starting at 9547.

Equal highs on June 19th and 20th.

Reaching up into the monthly order block.

Mention of Thursday reversal profile.

Cable Trading Below Level, Potential Stall or Reverse

The speaker notes that cable is now trading below a certain level, indicating a suspect decline. They caution about the potential for stall or reversal. If going short on cable, they mention using sessions, aiming for periods of liquidity, and incorporating higher time frame analysis concepts.

Key Points:

Cable trading below a certain level indicates suspect decline.

Caution about potential stall or reverse.

Using sessions and aiming for periods of liquidity when going short on cable.

Incorporating higher time frame analysis concepts.

Using Insights from Higher Time Frame Analysis

The speaker explains that while they are not trading higher time frame long-term positions or swings, they use insights gleaned from higher time frame analysis to avoid holding onto winning trades too long. They encourage listeners to look at their dollar index charts for more details.

Key Points:

Not trading higher time frame long-term positions or swings.

Using insights from higher time frame analysis to avoid holding onto winning trades too long.

Encouragement to look at dollar index charts for more details.

Importance of 15-Minute Time Frame

The speaker emphasizes the importance of the 15-minute time frame when doing standard deviations. They explain that focusing on the 15-minute time frame provides more consistency compared to other time frames. They mention the volume and consistency observed in the 15-minute candles.

Key Points:

Emphasis on the importance of the 15-minute time frame.

More consistency observed in the 15-minute time frame compared to other time frames.

Mention of volume and consistency in 15-minute candles.

Understanding Central Bank Dealers Range and Standard Deviations

The speaker mentions that many people think they understand Central Bank Dealers Range, standard deviations, and IPA (I'm not sure what this stands for). However, they claim that most people don't truly understand these concepts. They promise to provide a Quantum Leap in understanding through an upcoming advanced teaching.

Key Points:

Many people think they understand Central Bank Dealers Range, standard deviations, and IPA.

Claim that most people don't truly understand these concepts.

Promise of an upcoming advanced teaching to provide a better understanding.

Using Central Bank Dealers Range and Fibonacci Expansion Tool

The speaker explains the use of Central Bank Dealers Range and the Fibonacci expansion tool. They mention that they will provide more details about this in an advanced teaching to be released soon.

Key Points:

Use of Central Bank Dealers Range and Fibonacci expansion tool.

Mention of upcoming advanced teaching with more details.

Due to the limited information provided in the transcript, it is not possible to create additional sections or provide further insights.

Creating Daily Lows and Inside Advantage

The speaker discusses the concept of creating daily lows and how it provides an inside advantage in trading. They explain that trading above the opening price at the start of a new day can be advantageous.

Daily Low and Opening Price

Trading above the opening price at the start of a new day can provide an inside advantage.

The speaker mentions using bearish order blocks and trading above the opening price as their strategy.

The opening prices at midnight New York and 8:00 PM New York time are significant for this approach.

Incorporating Power 3

The speaker uses power 3 as an example to demonstrate their entry technique.

They mention not needing to get the actual high but using other factors to determine entry points.

The framework for their short trade was based on the concepts they teach.

Accuracy vs. Broker Manipulation

Some traders question why the speaker doesn't aim for more accurate levels in their trades.

The speaker explains that being too precise may lead brokers to suspect manipulation.

Brokers may label traders who consistently trade very close to highs and lows as professionals, which could result in negative consequences.

Masking Intentions as a Trader

It is important not to appear too consistent or knowledgeable about market movements.

Traders should avoid giving brokers the impression that they know everything about what's going on.

Throwing off some trades or operating at different times can help mask intentions and prevent brokers from anticipating strategies.

Importance of Consistency and Masking Prowess

The speaker emphasizes consistency in trading while also highlighting the importance of masking one's true prowess. They discuss strategies to avoid being tracked closely by brokers.

Consistency vs. Broker Tracking

The speaker advises being consistent but not overly so, as it can lead to brokers anticipating trades.

Traders should aim for around 70% accuracy and show some losses to avoid suspicion.

Operating at different times and throwing off some trades can help prevent brokers from tracking too closely.

Sharing Trades Publicly

The speaker mentions sharing trades publicly but not always revealing entry and exit points.

They caution against reverse engineering trades and emphasize that consistency is the main focus of their trade examples.

Masking Real Prowess

Some followers may believe they understand the speaker's strategies based on shared trade examples, but they are unlikely to grasp the mentorship aspects.

Traders should be aware that sharing too much information can lead others to think they have cracked the system.

Plotting Levels for Central Bank Dealers Range

The speaker discusses plotting levels for the Central Bank dealers range and explains its significance in trading.

Central Bank Dealers Range

The range for Central Bank dealers is less than 15 pips.

While this specific range may not be usable, other plotted levels such as Dev number three can still provide valuable insights.

Using Ranges and Standard Deviation

In this section, the speaker discusses using different ranges and standard deviation levels to analyze price movements.

Asian Range and Flout Range

The Asian range is less than 20 pips.

The flout range is used when neither the Asian range nor the standard deviation meets the minimum criteria.

The upper half of the flout range can be used with the Fibonacci expansion tool for trading.

Standard Deviation Comparison

On Wednesday, June 20th, the standard deviation on flout is close to standard deviation 1 on Tuesday.

By having this information on the chart, traders can anticipate price movements.

Trading Opportunities

On Tuesday, there was a successful trade as prices moved lower.

On Wednesday, a turtle soup sell opportunity occurred during the New York session overlap into London close.

Selling short and fading upward moves can be profitable in scalping.

Levels and Confluence

This section focuses on levels and confluence in trading analysis.

Levels on June 20th

A horizontal line at 13206 represents a previous old low level.

Price hits this level during June 20th before retracing back down and running higher to reach standard deviation 3 again.

This run above the 13206 level is a turtle soup sell opportunity.

Levels on June 21st

On June 21st, there is a standard deviation level of two.

This level gets close to standard deviation level five from June 20th.

Expectation for prices to move lower remains consistent.

Confluence of Bearish Order Block and Standard Deviations

Dollar Index trades up into a monthly bearish order block at the same time cable trades down to the 130.110 level.

This confluence occurs at standard deviation levels five and two respectively on both days.

An explosive rally follows this confluence.

Kill Zones and Turning Points

This section discusses kill zones and turning points in trading analysis.

Kill Zones

Specific kill zones include New York, London open, and London close profit taking.

These turning points often overlap with previous day standard deviations and time of day.

Intraday highs that overlap with standard deviations have a high probability of being turning points.

Benefits of Trading Sessions for Scalping

Intraday basis turning points can be found during trading sessions.

By spreading out these turning points over an entire month, major swings can be identified.

Accuracy and Hit Rate

It is not necessary to be completely accurate all the time in trading.

A hit rate of around 65% to 70% is sufficient to avoid being put out by brokers.

Combining standard models of entry with elements like time of day and standard deviations improves understanding and reduces fear in trading.

Blending Models and Using Standard Deviations

This section emphasizes blending models and using standard deviations in trading analysis.

Overlapping Standard Deviations

The speaker's charts show overlapping previous day standard deviations.

Rules provided include when to use Central Bank range, Asian range, and flout range.

Benefits of Using Standard Deviations

Understanding standard deviations helps traders know what to look for in the market.

Incorporating standard deviations with other models like Optimal Treet entry or turtle soup entries enhances trading strategies.

The Power of Understanding Price Action

In this section, the speaker emphasizes the importance of understanding price action and shares their personal journey in studying and discovering patterns in the market.

The Grail of Trading

The speaker highlights that understanding price action is crucial for successful trading.

They mention that they have discovered a pattern related to standard deviations and how they should be used in conjunction with previous day's data.

This pattern has unlocked everything for them and transformed their analysis from mediocre to advanced.

The speaker refers to this discovery as "the Grail" and believes it is what sets them apart as an Inner Circle Trader.

Coding and Algorithmic Thinking

The speaker suggests that knowledge of coding and computer programming gives an advantage in understanding market behavior.

They explain how they applied algorithmic ideas, such as seeking previous data points, to analyze whether markets are algorithmic themselves.

By thinking about how they would manipulate price if they were an artificial intelligence program, they gained insights into market dynamics.

Liquidity Points and Turning Points

The speaker discusses liquidity points in the market, which are determined by previous highs and lows within specific time ranges (e.g., 20-day, 40-day).

They emphasize that blending these concepts with standard deviation ideas provides valuable insider information.

Turning points in the market are not as random as they may appear, and by studying price action using these concepts, traders can identify potential opportunities.

Importance of Time

Time plays a significant role in determining daily highs and lows. Traders need to wait for specific time zones or "Kill Zones" to confirm these levels accurately.

The speaker mentions that recent market movements align with their analysis based on time zones, highlighting the relevance of timing in trading decisions.

Analyzing Recent Market Movements

In this section, the speaker analyzes recent market movements and explains how their analysis aligns with price action concepts.

Recent Market Movements

The speaker discusses a recent market scenario where they observed a selloff below double lows formed on specific dates.

This selloff was intended to trigger short positions and create buy-side liquidity for professionals.

They mention that even with various market dynamics, all the elements of price action concepts were present in the analyzed chart.

Cautionary Note and Final Thoughts

In this section, the speaker provides a cautionary note regarding sharing charts and emphasizes the importance of not revealing their proprietary analysis publicly.

Caution Regarding Sharing Charts

The speaker strongly advises against sharing charts that demonstrate their proprietary analysis on social media or other public platforms.

They express frustration at people seeking validation or guidance through sharing charts publicly.

Instead, they encourage individuals to share information within appropriate forums or communities without disclosing specific proprietary techniques.

Final Thoughts

The speaker reiterates that understanding overlapping deviations from previous days is key to analyzing weekly and daily highs and lows.

By blending these concepts with standard deviation ideas, traders can gain valuable insights into turning points in the market.

They emphasize that timing plays a crucial role in confirming price levels, highlighting the significance of time zones in trading decisions.

New Section

In this section, the speaker discusses the process of analyzing trading days and using standard deviations to identify turning points. The importance of confluence is also mentioned.

Analyzing Trading Days

Start by going through every single trading day.

Use one chart or template in MT4.

Plot standard deviations for the Central Bank dealers range, Asian range, or float, depending on applicability.

Once plotted, leave it there and move on to the next day.

Turning Points and Confluence

Study every turning point at the kill zones.

Within 3 to 5 pips variation is considered normal.

Confluence is important in this model.

Previous day's standard deviations should be considered for confluence.

Knowing which previous day's standard deviations worked can provide a benefit.

Timestamps are provided for each bullet point as requested.