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February 16, 2023 ES Opening Session Commentary
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February 16, 2023 ES Opening Session Commentary

Foreign Check and Market Analysis

The speaker discusses market analysis, including gaps in trading, price points, and algorithmic trading.

Foreign Check and Market Analysis

  • The speaker checks Twitter for updates on the market.
  • Analyzing the ES chart for movements before the market opening at 9:30 AM.
  • Explaining the concept of new day opening gaps and their significance in trading.
  • Emphasizing the importance of understanding price action in specific areas due to algorithmic trading.

Detailed Analysis of Trading Strategies

In this section, the speaker discusses trading strategies based on analyzing opening ranges and price action in electronic trading.

Analyzing Opening Ranges

  • The speaker emphasizes using the high formed from the opening range to the closing price as a reference point for analysis.
  • The opening range, typically the first 30 minutes of trading after 9:30, sets a crucial benchmark for potential intraday challenges and movements.
  • Observing how price interacts with the opening range gap provides insights into market sentiment and potential price exploration.

Price Action Insights

  • The concept of an opening range gap is explained as the difference between yesterday's close and today's opening price, influencing intraday trading decisions.
  • Monitoring price behavior relative to key levels like lows and highs helps traders identify potential breakout or reversal points without needing complex indicators.

Market Dynamics and Trading Opportunities

  • Simplifying chart analysis to focus on open, high, low, and close prices aids in understanding market movements without unnecessary complexity.
  • Large opening range gaps can lead to volatile morning sessions, requiring traders to adapt their strategies accordingly for more effective decision-making.

Strategic Approach Towards Market Movements

This segment delves into navigating challenging market conditions by adjusting trading approaches based on daily ranges and timing considerations.

Adapting to Volatile Sessions

  • Drawing parallels between large range days and morning session volatility highlights the importance of strategic patience during choppy market conditions.
  • Emphasizing prioritizing afternoon sessions over mornings due to potentially clearer trends emerging later in the day for improved trading opportunities.

Evaluating Market Sentiment

  • Discussing how market participants may consider revisiting previous levels unless significant bearish momentum disrupts established patterns.
  • Exploring premium levels like fairway gaps indicates potential areas where price may find support or resistance based on willingness to breach short-term highs.

Risk Management Strategies

  • Highlighting scenarios where drastic market shifts could invalidate previous analyses underscores the importance of adapting risk management strategies accordingly.

Intraday Trading Dynamics

This part focuses on real-time intraday trading dynamics influenced by immediate market reactions and trader behaviors.

Immediate Market Reactions

  • Cautioning against impulsive trades early in the morning due to unpredictable initial market movements that often lack clear direction.

Understanding Price Movement and Market Dynamics

In this section, the speaker delves into the concept of price movement in the market, using analogies to explain how prices behave and emphasizing the importance of understanding where prices might go next for traders.

The Magnet Analogy

  • Understanding price movement as paper clips attracted to a magnet.

Importance of Predicting Price Movement

  • Emphasizing the significance of knowing where price is likely to go for traders.

Primary Skill Set for Traders

  • Highlighting the necessity of comprehending where price should go as a foundational skill.

Navigating Market Uncertainties and Risk Management

This segment focuses on acknowledging market uncertainties, potential risks, and the importance of effective risk management strategies in trading.

Acknowledging Market Risks

  • Discussing unforeseen events like Black Swan occurrences that can disrupt markets.

Balancing Risk and Opportunity

  • Emphasizing the need to respect underlying risks while not letting them paralyze trading decisions.

Mentorship in Trading Strategies

Here, mentorship in trading strategies is highlighted, with an emphasis on real-time guidance and learning opportunities provided by experienced mentors.

Real-Time Mentorship

  • Providing insights into when to trade before or after specific sessions for optimal results.

Analyzing Market Behavior and Predictive Techniques

Analyzing market behavior through technical analysis techniques and predicting potential movements based on current trends.

Retail Trader Behavior Analysis

  • Explaining how retail traders react to market movements based on perceived resistance levels.

Identifying Market Inefficiencies

  • Discussing engineered liquidity and inefficiencies that impact market movements.

Understanding Market Sentiment and Trading Strategies

In this section, the speaker discusses the challenges traders face when trying to predict market movements and emphasizes the importance of understanding market sentiment for successful trading strategies.

Frustration of Misreading Market Trends

  • Traders often get frustrated by misinterpreting turning points in the market, leading to excessive trading and potential account blowouts.

Real-Time Market Updates via Twitter

  • The speaker highlights the significance of using Twitter for real-time updates on market movements, such as identifying key levels like 4113 South Side.

Leveraging Live Streamers' Sentiment

  • Utilizing live streamers' chat rooms can provide valuable insights into retail traders' sentiment, helping identify potential trade opportunities based on emotional reactions.

Interpreting Emotional Market Sentiment

This segment delves into how emotional sentiments expressed by retail traders through live streams can be leveraged to make informed trading decisions.

Contrasting Retail Trader Sentiment with Smart Money Moves

  • Retail traders often express emotionally charged sentiments that may differ from smart money moves, providing a unique perspective for contrarian trading strategies.

Using Emotional Cues for Trading Decisions

  • Emotional statements from retail traders can serve as indicators for potential market reversals or contrarian trades when juxtaposed against technical analysis.

Utilizing Live Streamer Chat Windows for Trading Insights

This part focuses on utilizing live streamer chat windows as a tool to gauge market sentiment and make informed trading decisions.

Live Streamers as Sentiment Gauges

  • Live streamer chat windows offer valuable insights into overbought or oversold conditions, serving as effective sentiment indicators without needing them plotted on charts.

Aligning Personal Analysis with Retail Trader Sentiments

  • Encouragement is given to align personal analysis with retail trader sentiments gleaned from live streams, emphasizing the importance of individual exploration in real-time trading decisions.

Detailed Analysis of Trading Strategies

In this section, the speaker reflects on their trading journey, emphasizing the importance of focus and avoiding distractions to succeed in trading.

Reflections on Trading Journey

  • The speaker mentions continuously refining their approach by tinkering with strategies, adding and removing elements, and focusing on irrelevant details.
  • Empowerment is highlighted as the ability to predict market movements accurately, enabling traders to make informed decisions confidently.
  • Fear of missing out (FOMO) is discussed as a common pitfall for traders who chase price actions they missed out on due to excitement or social media influence.
  • Overcoming FOMO and achieving maturity as a trader involve understanding when not to trade, avoiding comparison with others' results, and focusing on personal growth.
  • The speaker discourages traders from trying to keep up with others on social media or comparing themselves to peers at different stages of learning.

Effective Trading Mindset

This segment delves into cultivating a positive mindset in trading, emphasizing self-belief, perseverance, and continuous improvement.

Cultivating a Positive Mindset

  • Self-belief is crucial in trading success; the speaker advocates for believing in one's abilities and striving for personal excellence without comparing oneself to others.
  • Encouragement is given to traders to focus internally on self-improvement rather than seeking external validation or approval from peers or social media.

Market Observation and Decision-Making

Here, the importance of calm observation in trading decisions is emphasized over impulsive actions influenced by external factors.

Observational Skills in Trading

  • Traders are advised to observe market movements calmly without emotional attachment or impulsive tendencies to enhance decision-making skills.
  • The significance of gaining experience through observing price movements without immediate monetary risk is highlighted for long-term growth as a trader.

Independent Decision-Making in Trading

This part focuses on making independent trading decisions based on personal analysis rather than seeking validation from external sources.

Autonomy in Trading Decisions

  • Traders are cautioned against seeking opinions from others about their trades as it can lead to confusion and second-guessing one's analysis.
  • The speaker emphasizes learning from both successful trades that materialize and failures that occur during independent decision-making processes.

Mentorship Insights

The speaker discusses the challenges faced by inexperienced traders and emphasizes the importance of mentorship in guiding them through trading strategies.

Mentorship Importance

  • Inexperienced traders often struggle as they lack direction and understanding of trading.
  • Emphasizes the significance of high probability trading methods for success.
  • Watching price movements subconsciously enhances learning and identification of patterns over time.
  • Growth in trading skills is evident through repeated observations leading to empowered decision-making.
  • Encourages observing market liquidity and predicting price movements effectively.

Effective Trading Strategies

The speaker delves into effective trading strategies, focusing on reading market dynamics and making informed decisions based on logical analysis rather than emotional impulses.

Market Analysis

  • Analyzes market imbalances to predict potential price movements.
  • Advocates for a calm, logical approach to trading, avoiding emotional influences for consistent success.
  • Consistent logic-based trading leads to exceptional trader capabilities surpassing average traders' performance.

Tape Reading Techniques

The discussion centers around tape reading techniques, highlighting the importance of understanding price action and developing predictive skills in trading.

Tape Reading Mastery

  • Mastery in tape reading enables traders to identify unique opportunities ahead of others.
  • Experiencing market insights firsthand enriches the trader's perspective and boosts confidence in decision-making.

Detailed Analysis of Trading Strategies

In this section, the speaker delves into the mechanics behind trading strategies and emphasizes the importance of specific market movements.

Mechanics Behind Trading Strategies

  • The speaker discusses short-term premiums in the market and highlights the significance of losing a bullish breaker as a potential catalyst for lower prices.
  • Contrasting opening at 9:30 with cascading lower, the speaker explains how waiting for certain market movements can provide better trading opportunities.
  • Emphasizing buy stops and liquidity pools, the speaker advises waiting for specific price actions before making trading decisions.
  • Reflecting on price movements and respecting breakers, the speaker stresses the importance of observing inefficiencies in trading.

Strategic Trading Decisions

  • The speaker discusses reacting to breakers and understanding price reactions rather than solely relying on technical levels for trading decisions.
  • Highlighting the logic behind going short in specific scenarios, the speaker emphasizes the need to observe certain criteria before entering trades.
  • Exploring fair value gaps and potential market movements, the speaker predicts how price dynamics may evolve based on current market conditions.

Effective Chart Management for Traders

This section focuses on efficient chart management practices for traders to enhance focus and decision-making processes.

Chart Organization Tips

  • The speaker advises against cluttering charts with excessive indicators or annotations that may distract from critical price action observations.
  • Recommending separate charts for different types of data like opening gaps, the speaker advocates for maintaining a clear visual reference without unnecessary distractions.
  • Emphasizing simplicity in chart setups, the speaker likens monitoring price action to observing cars passing by on a street—requiring focused attention without distractions.

Tailored Chart Templates

Detailed Analysis of Trading Strategies

The speaker emphasizes the importance of personalizing trading strategies and notes that he relies more on written levels than visual chart annotations for decision-making.

Personalized Trading Approach

  • Emphasizes not replicating others' charts but understanding one's own strategy.
  • Relies on a yellow notepad with written price levels over visual chart annotations.
  • Recaps the morning's trading session, highlighting the significance of setting buy-side orders above short-term highs.

Understanding Market Dynamics

Discussion on market dynamics, identifying patterns in smooth market areas and their potential impact on price movements.

Market Patterns and Breakers

  • Smooth market areas indicate potential future price volatility.
  • Explains how a bullish breaker influences price movements and identifies key candlestick levels for support and resistance.

Trading Setups and Engagements

Illustration of a trade setup based on logic and analysis, emphasizing the importance of recognizing patterns for successful engagements.

Trade Setup Explanation

  • Demonstrates a trade idea from a bullish breaker to fair value gap targeting.
  • Introduces the concept of ICT bullish breaker entry as a setup for traders to consider going forward.

Building Confidence in Trading Decisions

Encouragement to develop individual trading models through observation, confirmation, and organic learning processes.

Developing Trading Models

  • Stresses the importance of observing patterns for building confidence in trading decisions.

Live Trading Analysis and Strategy Insights

In this section, the speaker provides live trading analysis and insights into strategy development based on chart patterns and market movements.

Understanding Chart Patterns and Market Behavior

  • The speaker emphasizes the importance of observing price movements on charts in real-time to identify key levels such as fair value ranges and order blocks.
  • Candlestick bodies convey crucial information about market sentiment, with consecutive down-closed candles indicating a shift in order flow.
  • Discussion on order blocks highlights their significance in determining potential price reactions based on market sentiment shifts.

Identifying Bullish Order Flow and Mitigation Blocks

  • Exploring the concept of mitigation blocks as opposite to breakers, supporting price action in bullish scenarios with specific chart patterns.
  • Qualifying bullish order flow through a series of chart signatures leading to potential liquidity opportunities for traders.

Entry Points and Scalping Strategies

  • Analyzing entry points for short-term traders based on liquidity zones created by market participants' actions.
  • Encouraging traders to overcome fear by understanding live market dynamics, emphasizing the potential for profitable scalping strategies.

Trader Mindset and Strategy Execution

This segment delves into trader psychology, mindset considerations, and the impact of strategy execution on trading outcomes.

Overcoming Fear and Building Confidence

  • Emphasizing the importance of overcoming fear in trading decisions by gaining experience and confidence through practice.

Feedback Loop and Continuous Improvement

  • Seeking feedback from viewers to gauge understanding and effectiveness of live stream content, encouraging interaction for mutual learning.

Managing Expectations and Trader Responsibility

  • Addressing viewer expectations regarding trade demonstrations while highlighting personal responsibility in decision-making processes.

Balancing Guidance with Individual Accountability

  • Reflecting on providing trade guidance versus empowering individual traders to make independent decisions based on their risk tolerance.

Ensuring Long-Term Success Through Mindset Development

Understanding Trading Psychology

In this section, the speaker delves into the psychological aspects of trading, emphasizing the importance of experience and managing emotions in trading scenarios.

The Impact of Experience on Trading

  • New traders may feel anxious when witnessing rapid market movements.
  • Following a trader's calls without understanding can lead to fear and unrealistic expectations.
  • Lack of experience can result in unrealistic expectations and fear after losses.

Taking Ownership in Trading

  • Emphasizes personal responsibility in trading outcomes.
  • Encourages traders to take ownership of both profits and losses.
  • Stresses that results are individual achievements, not influenced by external factors.

Building Confidence Through Experience

  • Experience helps traders navigate drawdown periods effectively.
  • New traders may struggle with emotional attachment to trades due to lack of experience.
  • Avoiding emotional trading decisions is crucial for long-term success.

Importance of Personal Responsibility

This segment highlights the significance of personal accountability in trading outcomes and emphasizes the role of individual decision-making in shaping results.

Individual Accountability in Trading

  • Traders should take full responsibility for their trading decisions.
  • Results, whether positive or negative, are attributed solely to the trader's actions.
  • Acknowledges external influences but underscores personal accountability.

Learning Through Personal Experiences

  • Traders benefit from learning through their own experiences rather than relying solely on others' guidance.
  • Encourages traders to view successes and failures as part of their learning journey.
  • External influences can provide guidance but ultimate responsibility lies with the trader.
Playlists: 2023 ICT Mentorship
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.