ICT - Trading Plan Development 2

Possible 211 in Progress at Bali Trust Bank

The transcript starts with a possible 211 (robbery) in progress at the Bali Trust Bank, with shots fired.

Understanding Market Profiling

• Market profiling is important for traders to understand the current market environment.

• There are four basic categories of market profiles: consolidation range, breakout (valid or false), trending, and reversal.

• Larry Williams introduced the concept of price movement within a trading range that can lead to breakouts and trends.

• Traders can make money by using higher time frames and identifying directional bias during consolidations.

• Novice traders often jump into moves that have already been underway for some time.

• During consolidations, traders try to predict future price movements, especially in bearish market environments.

• In a bearish market environment, optimal trade entry short patterns near the upper range of consolidation or false breakout patterns can be used.

Consolidation Range Profile

• Consolidation range profile is useful for determining overall trading strategies regardless of whether the market is trending or not.

• Breakouts from consolidations typically align with the prevailing trade direction before entering another consolidation phase.

Positioning for Swings and Trends

• When markets transition from consolidation to swing or trend, it's crucial to position oneself before the breakout occurs.

• Low-risk high probability trades involve trading in the opposite direction of anticipated price moves during consolidations.

• Selling into rallies during consolidations and looking for optimal trade entries based on previous consolidation ranges can help align with the market trend.

• Range expansion occurs when bars start to expand, indicating larger price ranges and potential profit opportunities.

• Professional traders focus on quiet periods of consolidation to accumulate positions for the next move rather than chasing the market.

The transcript does not provide any additional information or conclusions beyond what is summarized above.

New Section

This section discusses the importance of waiting for the next trading opportunity and not chasing price movements.

Waiting for the Next Trading Opportunity

• It is important to wait for the next trading opportunity if you haven't been placed before a move ensues.

• Chasing price movements should be avoided, especially once it starts running or breaks out.

New Section

This section explains how to analyze a bullish market environment using consolidation range profiles.

Analyzing a Bullish Market Environment

• In a bullish market, when there is a trading range or consolidation, look for clues that indicate where price will move next. Avoid chasing price once it starts moving higher.

• Use the low range or support level of the current consolidation as an optimal trade entry point. Look for buy signals from the low of the previous consolidation up to the high in the present consolidation. Alternatively, look for "turtle soup" patterns where stops are being hit on the low end of an important swing low.

• Trade against probable directional trends by entering trades on down candles when anticipating a bullish move.

New Section

This section discusses how to profile a market and make trade decisions based on different market scenarios.

Profiling a Market

• A standard down trending or downswing in the market can reverse at some point and lead to a retracement or consolidation phase.

• Based on higher timeframe support and resistance levels, we can anticipate swings unfolding within these retracements or consolidations without relying on indicators.

• During retracements and consolidations, we can identify potential long-term lows or trend moves higher. Look for buy signals for swing trades or long position trades. For short positions, focus on scalping or short-term intraday trades within the consolidation range.

New Section

This section explains how to approach trading in trending markets, reversals, consolidations, and breakout profiles.

Trading Approaches in Different Market Profiles

• In a trending market with a reversal and consolidation phase, consider taking swing trades or long position trades when there are buy signals. For short positions, focus on scalping or short-term intraday trades within the consolidation range.

• When a market is ranging, it could be a prolonged period of time where it stays within a specific range. Identify key support and resistance levels and limit your trades to targets within that range. Avoid chasing price into new territory after a breakout as it may lead to false breakouts and retracements within the range.

• If there are optimal trade entry buy signals within the consolidation range, consider taking profits at previous highs while keeping a portion of the position in case of a breakout. However, avoid chasing price into new territory without strong confirmation.

New Section

This section emphasizes the importance of having the right tools and approach to trading based on different market profiles.

Using Tools for Market Analysis

• Analyzing daily charts, weekly charts, monthly charts, and 4-hour charts can provide insights into general market direction based on support/resistance levels and fractal lows that were taken out. Consider factors like bearish market structure or commercial trader data for additional profiling information.

New Section

The speaker discusses market profiling and the importance of trading based on key levels presented on higher time frames. They emphasize looking for buy signals in the right side of the chart and retesting previous highs as targets.

Market Profiling and Key Levels

• The speaker mentions a potential market profiling candidate with an up trending market reaching a reversal and retracement into consolidation.

• Trading should be based on key levels presented on higher time frames.

• Buy signals should be sought in the right side of the chart, while extreme retracement levels are not recommended for scalps or intraday short-term targets.

• Buying fresh highs is not advised; profit taking and even short positions may be considered at those levels.

• A bearish tone in the marketplace may indicate a focus on short sells rather than buy signals.

New Section

The speaker emphasizes the importance of focusing on higher time frames to determine the current market profile. They discuss using trend-oriented analysis when the market is trending, but lower odds when it's in a reversal profile.

Focusing on Higher Time Frames

• Traders should spend time with higher time frames to determine which profile the market is presently trading within.

• Trading should not be done just for the sake of taking action, but rather with the highest probability in one's favor.

• Trend-oriented analysis is used when the market is trending, while a reversal profile presents lower odds.

• Keeping focus on the current environment helps traders align their trading strategies accordingly.