VIDEO
HIGHLIGHT
Log InSign up
ICT 2024 Mentorship \ Tape Reading \ September 25, 2024
SummaryTranscriptChat

ICT 2024 Mentorship \ Tape Reading \ September 25, 2024

Market Analysis and Trading Insights

Opening Remarks and Market Conditions

  • The speaker greets the audience, checking audio quality and ensuring everything is functioning properly.
  • Acknowledges a lower gap opening in the market, indicating it has filled but remains less than 40 handles, which is typically not very exciting for traders.
  • Emphasizes the importance of higher time frames due to the election year, suggesting that market movements may be influenced by public perception of economic health.

Key Market Levels and Fair Value Gaps

  • Highlights interest in revisiting previous highs from August 22nd, noting that these levels were left intact overnight.
  • Clarifies that no fair value gap has formed yet during early trading; emphasizes understanding pre-session setups versus current day gaps.
  • Discusses using aggressive trading strategies on shorter time frames while identifying fair value gaps outside of the initial 9:30 candle.

Trading Strategies and Observations

  • Shares feedback from previous live streams where viewers preferred chart annotations over verbal commentary; notes improvements in audio quality today.
  • Identifies relative equal highs as potential targets for trades, emphasizing caution when approaching these levels to avoid picking tops in the market.

Analyzing Price Action and Wicks

  • Discusses how price action around old highs can provide insights; suggests monitoring wicks for better entry points or profit-taking opportunities.
  • Notes being inside today's first presented fair value gap; stresses scaling out early when reaching premium levels to manage risk effectively.

Conclusion on Market Direction

  • Indicates that while earlier gaps are not entirely discarded, preference lies with first presented fair value gaps outside of initial trading candles for more reliable signals.

Understanding Trading Strategies and Mindset

The Importance of Time Frames in Trading

  • The speaker emphasizes the significance of choosing a higher time frame for trading, indicating that they are not focused on picking market tops.
  • A student named Kiren expresses optimism about learning to identify the highest highs and lowest lows, but the speaker advises against this focus, suggesting instead to look for trades within those ranges.

Navigating Market Sentiment and Execution

  • As Thanksgiving approaches, the speaker notes personal challenges but remains committed to their trading strategy centered around fair value gaps.
  • The speaker shares advice given to their son Cameron about entering trades that are already in motion rather than striving for perfection in timing.

Common Misconceptions About Trading Success

  • Many traders feel pressured to enter at the lowest point; however, the speaker reassures that successful trading can occur without achieving perfect entry points.
  • It is highlighted that many profitable traders operate within ranges rather than aiming for extremes, which can alleviate pressure and improve learning outcomes.

Analyzing Market Movements

  • The discussion includes a reflection on recent market movements where price fell short of reaching specific levels but still maintained momentum within fair value gaps.
  • The speaker expresses a desire to see prices break through certain resistance levels with strong energy, reinforcing their bullish outlook based on higher time frames.

Leveraging Fair Value Gaps in Trading Strategy

  • Emphasis is placed on using intraday longs as a safer approach compared to shorting when leveraging high amounts due to reduced risk of over-leveraged positions.
  • The importance of understanding relative equal highs and fair value gaps is discussed as essential tools for making informed trading decisions.

Recognizing Price Action Patterns

  • The speaker suggests removing unnecessary indicators from charts to maintain clarity while analyzing price action around fair value gaps.
  • Observations about wicks and turning points highlight how these can serve as footholds or handholds for price movement during trades.

Understanding Volume Imbalances

  • Volume imbalances are described as weaker structures allowing price movement; they can be utilized strategically during trades if approached flexibly.

Understanding Order Blocks and Volume Imbalances in Trading

Characteristics of Order Blocks

  • An order block is defined by a down closed candle representing a bullish order block, typically identified from the opening price to the mean threshold (middle of the candlestick).
  • Ideal behavior for a bullish order block is for price to touch the opening price and then rise without going lower, indicating strong support.

Flexibility with Volume Imbalances

  • Traders often desire their own specific Price Delivery (PD) methods but may face disappointment when volume imbalances do not behave rigidly as expected.
  • It’s crucial to maintain flexibility regarding volume imbalances; if even the creator of these concepts does not hold them strictly, traders should adjust their expectations accordingly.

Trading Strategies and Setups

  • Observing relative equal highs can provide insights into potential setups; traders should screenshot significant levels like 20.21475 for reference.
  • The bodies of candlesticks support volume imbalances while wicks indicate market movements; understanding this can help identify trading opportunities.

Embracing Personal Trading Styles

  • Traders should focus on finding segments of price action that resonate personally rather than forcing specific setups; comfort leads to better decision-making.
  • Relaxation in trading allows for more natural engagement with market movements, enhancing overall performance.

Practical Application and Market Behavior

  • Focus on using fair value gaps and volume imbalances as part of your strategy rather than getting caught up in trying to predict every low or high.
  • A partial entry into fair value gaps near relative equal highs can create favorable trading conditions, simplifying decision-making processes.

Monitoring Market Movements

  • During live sessions, it’s important to observe how prices interact with established levels without losing ground below critical thresholds.
  • Maintaining awareness of previous candlestick patterns helps traders make informed decisions about future movements.

Profit-Taking Strategies

  • When engaged in long positions, it's advisable to take profits as prices approach significant resistance levels like August 22nd highs.
  • Distributing portions of long positions at strategic points ensures risk management while capitalizing on upward trends.

Analyzing Inefficiencies in Market Behavior

Market Analysis and Trading Strategies

Understanding Fair Value Gaps

  • The speaker discusses the importance of smart money anticipating market movements, particularly in relation to fair value gaps. They emphasize the need for prices to return to a certain percentage of fair value before making new long positions.
  • A cautionary note is given about potential failures in price movement; if the market does not rally as expected, it may indicate an inversion of the fair value gap that traders should monitor.
  • The speaker reflects on their trading strategy using one-minute buy/sell signals near previously established fair value levels, indicating retail traders often view these levels as support.

Entry and Exit Strategies

  • An ideal scenario for the speaker would involve trading up to a specific high from August 22nd. However, they stress the necessity of having an exit strategy in place before reaching their target.
  • Without a clear exit strategy, traders risk becoming emotional and losing sight of their objectives, which can lead to missed profit opportunities.

Setting Targets and Market Expectations

  • The speaker defines "Terminus" as the ultimate target for trades. They clarify that this point represents complete closure of all positions rather than holding onto any remaining shares.
  • Due to time constraints on their trading day, they express flexibility regarding whether or not prices will reach their anticipated targets within a limited timeframe.

Market Behavior Insights

  • Observations are made about relative equal highs forming around noon on Tuesdays, suggesting these could serve as significant levels for future trades alongside expectations set by previous highs.
  • The speaker acknowledges that while they have strong expectations based on market behavior, there is always uncertainty involved in predicting market movements accurately over time.

Inefficiencies and Market Narratives

  • The discussion highlights how inefficiencies in market pricing can be interpreted through broader narratives rather than isolated events. This perspective aids in understanding overall market dynamics better.
  • Confidence is expressed regarding predictions based on observed patterns without being overly reliant on emotions or fear of being wrong during trading sessions.

Learning Through Observation

  • Emphasis is placed on the importance of spending time observing charts without preconceived notions about what should happen next; this practice fosters deeper learning and understanding of market patterns over time.

Understanding Trading Mindset and Learning Process

The Importance of Experience in Trading

  • The speaker emphasizes the value of real-time experience, sharing insights from their own high accuracy in trading predictions with private mentorship students.
  • Acknowledges that learning to trade successfully takes time and cannot be guaranteed; a shift in mindset is necessary for those seeking quick profits.
  • The speaker stresses personal responsibility in trading outcomes, highlighting that even accurate guidance can lead to losses if not executed properly by the trader.

Common Pitfalls in Trading

  • Discusses frequent mistakes made by traders, such as overleveraging and improper stop-loss placements, which can lead to significant losses despite favorable market conditions.
  • Expresses frustration at seeing traders fail while following live calls, underscoring the need for patience and self-discipline in developing trading skills.

Overcoming Doubts and Building Confidence

  • Addresses skepticism within the trading community about his methods, noting how negative perceptions can hinder potential learners from engaging fully with the material.
  • Encourages viewers to commit to learning without financial pressure or distractions, reinforcing that consistent practice leads to mastery.

Accessibility of Trading Skills

  • Asserts that anyone can learn effective trading strategies if they are willing to invest time and effort into understanding market dynamics.
  • Highlights that recognizing key market indicators is within reach for all viewers; success is achievable through diligent study and practice.

Practical Application of Concepts

  • Critiques naysayers who dismiss practical trading techniques as nonsense when they are demonstrated effectively during live sessions.
  • Introduces concepts like fair value gaps and their significance in making informed trades, illustrating these ideas with real-time examples from charts.

Engaging with Live Content

  • Describes how specific setups will be utilized by his son as he learns price action analysis, emphasizing generational knowledge transfer.
  • Questions whether viewers recognize the consistency of patterns shown during live sessions, inviting them to reflect on their own observations against shared data feeds.

Feedback Loop for Improvement

  • Light-heartedly addresses viewer engagement metrics (likes), indicating a desire for feedback on content value while affirming commitment regardless of audience response.

Understanding Market Inversion and Trading Strategies

Observations on Market Behavior

  • The speaker emphasizes personal experience as a witness to market events, noting that not everyone will act similarly despite witnessing the same occurrences.
  • Discussion of the lower quadrant in trading charts, highlighting its significance when prices dip into this area for potential inversion opportunities.
  • The importance of leaving the lowest portion of the lower quadrant untouched is noted as a key indicator for algorithmic trading strategies aimed at price increases.

Trading Patterns and Algorithm Insights

  • The speaker describes how bodies of candlesticks should remain within specific ranges (upper half of an orange box), indicating healthy market behavior.
  • A call for transparency in trading education; the speaker challenges others to provide sources for their methods, asserting originality in their approach.

Learning and Mastery in Trading

  • Encouragement to engage with learning materials without fear or anxiety; promises significant improvements in understanding price action through dedicated study.
  • Comparison of mastering trading skills to riding a bike, emphasizing that consistent practice leads to comfort and confidence in trading decisions.

Study Environment and Techniques

  • Recommendations for creating a distraction-free study environment are provided, stressing the importance of focus during learning sessions.
  • Quality over quantity is highlighted regarding study time; effective learning can occur even with limited but focused sessions.

Commitment to Student Success

  • The speaker expresses commitment to student success, stating they would not be publicly sharing knowledge if they did not believe in its effectiveness.
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.