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ICT Mentorship 2023 - ES Review Precision Results
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ICT Mentorship 2023 - ES Review Precision Results

Post Analysis Review

Overview of Previous Analysis

  • The speaker welcomes viewers and mentions a review of the previous evening's analysis on email SMP, indicating that a detailed breakdown was provided.
  • A chart from the previous session is referenced, highlighting expectations for price movement into Thursday and Friday, specifically noting a draw above the buy side into an old weekly imbalance.

Charting Techniques and Contract Selection

  • The speaker addresses questions about using continuous contracts on TradingView, explaining that individual delivery contract months reveal inefficiencies not visible in continuous contracts.
  • Emphasizes the importance of analyzing thinly traded contracts to identify price action more effectively, particularly focusing on the June contract shown in a weekly chart.

Time-Based Charts vs. Other Analyses

  • The speaker defends time-based charts against critics who claim they are ineffective, asserting that they are fundamental to understanding price movements as algorithms operate based on time first.
  • A daily chart is presented to illustrate expected price actions, reinforcing the simplicity of identifying where prices will draw next without overcomplicating concepts.

Learning Focus for New Traders

  • New traders are encouraged to focus on understanding price direction rather than seeking entry patterns or new trading gadgets; journaling past data is highlighted as crucial for learning.
  • The concept of "the cult of winning" is introduced humorously, emphasizing that once traders learn these principles, they cannot unlearn them.

Price Action Insights and Fair Value Gaps

  • The speaker reviews recent price action while removing unnecessary elements from charts to highlight key turning points for better journaling practices.
  • Discussion includes drawing up into fair value gaps and recognizing institutional order flow entries as critical components in understanding market behavior.

Classifications within Fair Value Gaps

  • An explanation of institutional order flow entry drills (IOFED), which serve as partial entries into fair value gaps based on market conditions—either bullish or bearish.

Daily Fair Value Gap and Optimal Trade Entry

Understanding Daily Fair Value Gaps

  • The discussion begins with the concept of a daily fair value gap, emphasizing its significance in trading strategies. Viewers are encouraged to revisit previous videos for deeper insights.
  • The price movement is analyzed as it approaches a classic optimal trade entry point, indicating that once it touches the candle's high, it can be expected to rise further.

Market Dynamics and Patterns

  • A transition to a 15-minute candlestick chart reveals an "institutional oracle intra drill," highlighting market behavior during the morning session characterized by a "Judah swing," which refers to deceptive price movements.
  • The speaker shares personal trading experiences from the morning session, including executing trades based on observed patterns like three drives and short-term reversals.

Weekly Volume Imbalance Insights

  • Discussion shifts to weekly volume imbalances, particularly focusing on NASDAQ's performance as a leading indicator in the market. This highlights the importance of understanding broader market trends when making trades.
  • The speaker introduces the "six sister" concept—trading pairs that lag behind stronger indices like NASDAQ—illustrating how this strategy can yield profitable opportunities.

Market Session Analysis

Afternoon Trading Strategies

  • An analysis of afternoon trading sessions reveals key moments where fair value gaps were identified, leading to strategic entries during New York PM sessions.
  • The speaker mentions upcoming books that will detail macro concepts and technical theories related to trading strategies, hinting at valuable resources for traders seeking deeper knowledge.

Execution Techniques and Challenges

  • A closer look at one-minute charts shows refined imbalances within fair value gaps. The execution process involves taking partial profits while managing risk through stop-loss adjustments.
  • Detailed explanation of breaker structures is provided; these are critical points where price action indicates potential reversals or continuations based on previous highs and lows.

Understanding Breakers and Market Behavior

Identifying Breaker Structures

  • Breakers are defined as areas where price has previously reversed; understanding their structure helps traders anticipate future movements effectively.

Market Timing Considerations

Market Dynamics During New York Lunch Hour

Understanding Market Behavior

  • The discussion begins with the analysis of a significant down close candle, indicating a classic stop hunt during the New York lunch hour, which is characterized by aggressive selling.
  • The speaker emphasizes that despite claims of reduced market activity during lunch, algorithms actively reprice to target stops within this timeframe, particularly between noon and 1 PM New York time.

Liquidity and Market Imbalances

  • A specific level is identified as having substantial sell-side liquidity; the market reacts by trading into an imbalance that represents institutional entry points.
  • Following this, there’s a rally that consolidates before moving higher to attack buy-side liquidity pools and weekly volume imbalances in the afternoon session.

Key Trading Opportunities

  • The "Silver Bullet" trading strategy is introduced, highlighting two key opportunities for traders between 2 PM and 4 PM. This includes setups for liquidity runs not yet engaged on that day.
  • Another opportunity arises post-3 PM using similar setups; these strategies are crucial for capitalizing on market movements.

Analyzing Price Action

  • The speaker notes inefficiencies in price action where candles indicate potential retracement levels before further rallies towards buy-side liquidity pools.
  • A detailed examination of daily candlestick patterns reveals typical behavior such as open declines followed by rallies, emphasizing the importance of fair value gaps.

Advanced Concepts in Trading Strategy

  • Discussion shifts to advanced concepts like opening range gaps and their implications for projecting future price movements based on historical data.
  • The speaker expresses frustration over others misappropriating his concepts without credit but assures that comprehensive teachings will be published in print form.

Final Insights on Market Execution

  • Specific price levels are discussed regarding exits from trades; attention is drawn to how these relate to standard deviations and projected ranges.

Understanding Price Movements in Trading

The Logic Behind Price Behavior

  • The speaker emphasizes that price movements are not random; they follow a logical pattern that traders can learn to anticipate rather than react to.
  • A key concept introduced is "drawing liquidity," which refers to identifying where prices are likely to move next. This skill is essential for consistent profitability in trading.
  • The discussion highlights the relationship between smart money and retail traders, noting that when smart money benefits from price increases, retail traders often face losses due to their reliance on classic support levels.

Smart Money vs. Retail Traders

  • When sell stops are triggered, it creates a rush of selling orders, allowing smart money to buy at lower prices before the market rallies.
  • Smart money targets buy stops above previous highs, capitalizing on retail traders who fail to take profits or manage their positions effectively.
  • The strategy involves distributing long positions by selling above established highs while simultaneously liquidating those positions as retail traders chase breakouts.

Key Trading Strategies

  • The speaker advises students to partially sell long positions above old highs and cover short positions below old lows, contrasting this with typical retail strategies.
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.