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ICT Mentorship Core Content - Month 12 - Intraday Top Down Analysis
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ICT Mentorship Core Content - Month 12 - Intraday Top Down Analysis

ICT Mentorship: Short-Term Top-Down Analysis

In this section, the speaker discusses their personal approach to analyzing assets from a four-hour down to a five-minute timeframe. They focus on determining the impact of the four-hour perspective on a given asset, identifying directional bias with a high time frame intraday four-hour chart, classifying PDA raised accurately to assist in key levels, and completing institutional analysis on a four-hour basis.

Day of the Week

  • The speaker starts by considering what day of the week they are trading.
  • They prefer to do this during weekend analysis and watch where they trade.
  • They look for gaps or if it's in a rush to get somewhere right away at the beginning of the week.
  • They typically watch what's going on Monday to see what Tuesday and Wednesday can bring.

Incorporating Ranges

  • The speaker incorporates Central Bank dealers range and Asian range into their analysis.
  • They look for consolidations within these ranges and standard deviations that align with potential highs and lows of the day.

Intraday Profiles

  • The speaker refers to potential intraday profiles based on intraday models' suggestions in terms of price action.
  • They use PD arrays to qualify key levels for targets and entries.
  • Average daily range projections help facilitate daily highs and lows.

Refining Timeframes

  • The speaker suggests deciding which timeframe is best suited for an individual's needs when dropping down from a four-hour chart.
  • 60 minutes is decent but still needs refinement; 30 minutes or 15 minutes are preferred personally before further refining it for five minutes if possible.
  • Confirming entries on 15 minute minimum is ideal; however, getting it down until five minutes is best.

Trading Strategies and Techniques

In this section, the speaker discusses various trading strategies and techniques that traders can use to make informed decisions.

Timeframes and Fair Value Gaps

  • Traders should look for time frames that produce fair value gaps.
  • Lower time frames create pockets of illiquidity where prices need to be refined.
  • Use daily, weekly, and monthly analysis to determine directional bias.

Day of the Week Analysis

  • Look for reasons to trade in higher time frame directional bias.
  • If bullish from higher time frame, look for longs on Mondays, Tuesdays, and Wednesdays.
  • If bearish from higher time frame, look for shorts on Mondays, Tuesdays, and Wednesdays.
  • If Monday-Tuesday-Wednesday influence does not materialize as expected, focus on Thursday-Friday templates.

Time of Day Kill Zones

  • Look for trade setups in London open kill zone using higher time frame analysis.
  • Aim for low of the day when higher time frame is bullish; aim for high of the day when higher time frame is bearish.
  • Collapse intraday positions starting at 10:00 AM to 11:00 AM New York time window.

Central Bank Dealers Range Deviations

  • Use negative standard deviations going down Central Bank dealers range for long entries when higher time frame suggests bullish direction.
  • Use positive standard deviations going up Central Bank dealers range for short entries when higher time frame suggests bearish direction.
  • Blend with 15 to 60 minute discount/premium arrays that overlap with standard deviations.

Trading Strategies Based on Asian Range

In this section, the speaker discusses his trading strategies based on the Asian range.

Entering Long and Short Positions

  • If the higher time frame analysis is bearish, enter shorts above the Asian range low, preferably above the Asian Range High.
  • If bullish, enter long positions below the Asian range low but as long as below the Asian Range High, take high probability longs.
  • If bearish, prefer to go short above the Asian Range High but still defined as a high probability scenario if trading short above the Asian range low.

Retesting for Entry or Adding to Open Positions

  • Expect retesting of Asian Range High for entry as support when bullish and adding to open positions for long.
  • Expect retesting of Asian range low for entry short when bearish and adding to an open position for short holdings.

Daily Range Projections

  • Look for standard deviations in the overlapping Central Bank dealers' range and Asian range with discount arrays on 60 to 15 minutes ideal for entries.
  • For bearish projections, look for overlapping in total ranges of Central Bank dealers' range and Asian range with premium arrays on 60 minutes to 15 minutes ideal for entries.

Understanding Flout

In this section, the speaker explains what flout is and how it can be used in trading strategies.

Definition of Flout

  • Flout is half of the total range that starts from Central Bank dealer's opening all through to midnight New York time at close.
  • It comprises both wick and body candles' highest high and lowest lows.

Bullish Projections Using Flout

  • When bullish projections are needed, look for overlapping in total ranges of Central Bank dealers' range and Asian range that has been divided in half, making one standard deviation.
  • Half of the range is 20 pips, which makes up a standard deviation.
  • Project up only half of the range to make the standard deviation.

Bearish Projections Using Flout

  • When bearish projections are needed, look for overlapping in total ranges of Central Bank dealers' range and Asian range that has been divided in half as one standard deviation.
  • Looking for confluences at flat standard deviations and Central Bank dealers' range and Asian range with premium arrays on a 60-minute to 15-minute timeframe is ideal for entries.

Conclusion

In this section, the speaker concludes by promising to provide examples of flout usage in trading strategies.

  • The speaker promises to show examples of flout usage next week when finishing up the month of August.
  • Flout can be many standard deviations that have to keep being applied and added to as the daily range goes up.
  • Keep adding another level of flout when approaching extremes in the day and into high premium levels on the 60 minutes.

Intraday Profiles

This section discusses how to determine intraday profiles and use them to make trading decisions.

Determining Market Direction

  • When bearish, look for high of the day in London.
  • When bullish, look for low of the day in London.
  • If four-hour has not yet traded to a discount array, expect New York open to continue lower when bearish.
  • If four-hour has not yet traded to a premium array, expect New York open to continue higher when bullish.

New York Session Reversals

  • If it trades to a four-hour premium array, there is likely going to be a market reversal in New York and it's going to come lower.
  • If it trades down into a four-hour discount array during the New York session, there's probably a high probability that's going to create a New York Market reversal.
  • Until that happens, the London and New York will be in agreement in terms of direction.

Using Price Levels

  • Note key price levels and determine portion of market structure for trade ideas.
  • Define range as either internal range liquidity or external range liquidity.
  • Calibrate levels from PD array matrix to nearest 10 level or five level.

Average Daily Range Projections

  • Use five-day average daily range to help determine possible intraday range extremes for single day trading.
  • Look for market to trade towards average daily range high if bullish.
  • Use Fibonacci on average daily range high and low as projection for 127 extension and 162 extensions as targets.
  • Look for premium array on 60 minute or 15-minute time frame when broken.
  • Look for market to trade towards average daily range low if bearish.
  • Use Fibonacci on average daily range high and low for 127 or 162 percent extension for downside targets.
  • Look for discount array on 15 or 60-minute time frame when broken.

Blending Standard Deviations

  • Incorporate Central Bank dealers range standard deviations, Asian range standard deviations, and flout standard deviations.
  • Blend all three and use average daily range to determine big range days.
  • Look for respective premium or discount array on the 15 or 60 Minute time frame when they arrive at an overlap or converge.
  • Usually within 10 Pips of a variance between that.

Introduction

In this section, the speaker talks about his trading philosophy and why he prefers to take profits as long as the train is moving in the right direction.

  • The speaker emphasizes that he has always gotten hurt when trying to be too consistent or accurate with his trades.
  • He believes that taking profits as long as the train is moving in the right direction is a safer approach.
  • This philosophy applies whether trading on a demo or live account.

Patterns for Consideration

In this section, the speaker discusses how he approaches trading patterns and setups.

  • The speaker teaches from the context of a higher time frame directional bias and then discusses what sets up a trade.
  • Execution techniques are covered in the mentorship program, including buying on limits, selling on limits, living orders, or market orders.
  • The main focus is on understanding where the setups are because once you understand where the market is going and you understand the setup, entry techniques become easy.

Technical Trading

In this section, the speaker explains how technical traders only need one setup or pattern to trade on.

  • The importance of sticking to one pattern is paramount because trying to change or do more than one thing in the beginning will make it difficult to measure consistency and build confidence.
  • There will be periods when it doesn't work or you do it wrong. It's normal and nothing to be ashamed of.
  • Demo accounts provide an environment for learning without risking real money.

Two Setups That I Trade

In this section, the speaker shares his two go-to patterns for trading.

  • These patterns are not overly complicated and can be recognized easily.
  • The speaker emphasizes that he does not have a slew of different patterns and that he only needs one pattern to trade on.
  • The importance of sticking to one pattern is paramount because trying to change or do more than one thing in the beginning will make it difficult to measure consistency and build confidence.

Introduction

The speaker explains that the ICT patterns are not the only way to be successful in trading. He shares his personal favorites and a few others to stimulate interest and inspiration.

ICT Bullish Pattern Number One

  • The higher time frame has to be bullish.
  • Price bounces off of a higher time frame discount array.
  • An impulse swing creates a fair value Gap near the swing low.
  • A short-term low forms in Market structure and fails to Rally higher after equal highs or a higher high is formed.
  • Price will eventually drop down into the fair value Gap and under the short-term low forming after the impulse price swing forms cell stops are triggered smart money uses offset accumulation to pair long entries with the sell stop rate for a discount entry.

ICT Bullish Pattern Number Two

  • The condition on the hard time frame is going to be bullish.
  • Price will bounce prior to a predetermined or anticipated higher time frame discount array.
  • Price drops lower into the anticipated higher time frame discounted rate at a later time and raids sell stops in the form of a liquidity pool sell stops are triggered smart money uses offset accumulation to pair long entries with cell stop raid discount entry.

Turtle Soup Trading Strategy

In this section, the speaker explains the Turtle Soup trading strategy and how it works.

Understanding the Turtle Soup Trading Strategy

  • The strategy involves waiting for a short-term low to form ahead of an anticipated level in terms of a discount.
  • Patience is key when using this strategy as it requires waiting for specific things to happen before acting.
  • The pattern can be seen on any timeframe and is universal.
  • If price rallies through the short-term high, that high becomes a bullish breaker. When price trades back down to the breaker, use that as an entry point.

Bullish Pattern #3

In this section, the speaker discusses Bullish Pattern #3 and how it can be used in trading.

Using Bullish Pattern #3

  • If you miss out on getting an entry point with the Turtle Soup strategy, wait for price to rally through the short-term high instead.
  • The short-term high becomes a bullish breaker which can be used as an entry point when price trades back down to it.
  • There will usually not be a retracement down into an order block where the buy level is located.
  • Look for optimal trade entries in lower time frames.

Trading Patterns and Optimal Trade Entry

In this section, the speaker discusses two trading patterns - external range liquidity or turtle soup and internal rings liquidity. He explains how to use these patterns for optimal trade entry.

External Range Liquidity or Turtle Soup

  • This pattern is used when price moves outside of a range and then quickly retraces back into it.
  • The speaker suggests waiting for price to break above the bullish breaker before adding more contracts.
  • If you miss the initial turtle soup long, you can use the bullish breaker as a contingency plan to get in sync with it.

Internal Rings Liquidity

  • This pattern is used when price moves within a range and creates liquidity.
  • The speaker suggests waiting for price to move away from that area before entering a trade.
  • This is an optimal trade entry because it has already run stops and will not retrace down into some discount rate.

Blending Concepts for Trading Success

In this section, the speaker talks about blending different concepts together for successful trading. He emphasizes that there is no recipe for success and that traders must be able to think critically about what they are looking at.

No Recipe for Success

  • There is no one-size-fits-all recipe for successful trading.
  • Traders must blend different concepts together and keep working at it over time.
  • Automated trading systems cannot replace critical thinking skills.

Specific Criteria

  • The speaker uses three specific criteria when looking at trades: buy program, sell program, and if I get it wrong program.
  • These programs help him know where his risk is and where prices are going.
  • Traders should have a contingency plan if they miss an opportunity on one pattern.

Targeting

  • The speaker discusses targeting and how it is different from the setup.
  • There is no recipe for targeting, but traders can use average daily range projections to help them.
  • Traders must blend different concepts together to find success.

[ICT] Bearish Trading Patterns

In this transcript, ICT discusses three bearish trading patterns that traders can use to enter the market. These patterns involve identifying key levels and using buy stops to trigger short positions.

Pattern 1: Shorting at a Bearish Order Block

  • Optimal trade entry is after the buy stops are ran out on a previous short-term High.
  • The impulse swing is from the highest high down to the lower swing that failed to go much lower before it come back and hit the fair value Gap.
  • The retracement back up to the sell side level or entry is the bare shorter block.

Pattern 2: Classic Turtle Soup Entry

  • Price bounces prior to a higher time frame premium array but falls short of it.
  • Wait for price to rally higher into the anticipated higher time frame premium array and raids the buy stock liquidity pool.
  • Smart money uses offset distribution to pair short entries with buy stop raid.

Pattern 3: Selling After Breaker Is Traded Back Up To

  • If you couldn't get in on pattern 2, wait for price to trade down through the breaker once, then look for an opportunity to sell short when it trades back up through it again.
  • Confidence level is strong because the breaker has done its job by running buy stops and price will not want to give them opportunity to go back up to that level.

Trading Patterns and Institutional Order Flow

In this section, the speaker discusses different trading patterns and institutional order flow.

Two Types of Patterns

  • There are two types of patterns: internal range liquidity optimal trade entry trading back to fair values and external range liquidity turtle soup running out stops and fading that move.

Understanding Institutional Order Flow

  • To be consistent with the speaker's concepts, one must understand how to work from a higher time frame down to a lower time frame using institutional order flow and market structure.
  • The tutorials lack clear definitive rule-based ideas intentionally because the goal is to see if someone else can duplicate what the speaker was able to do. However, no one has been able to do it yet.

Technical Analysis

  • Technical analysis requires understanding where support or resistance levels are located. It's not as easy as drawing a line underneath a low because there are multiple time frames to consider.
  • Refining price from an institutional standpoint is necessary since demo accounts or live accounts have slightly skewed pricing compared to interbank pricing.

Trading Gold Market Structure

In this section, the speaker discusses how he predicted a move in the gold market structure.

Predicting Market Moves

  • The speaker predicted a move in the gold market structure and told his students what to expect during a live session. His students were able to target where the setup was going to be immediately after he prompted them, which was encouraging for him as their mentor.
Playlists: 2017 ICT Private Mentorship Core Content Month 12
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2017 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in August 2017. 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.