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Market Review \ February 10, 2023
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Market Review \ February 10, 2023

Audio Setup and Initial Thoughts

Audio Issues and Initial Engagement

  • The speaker expresses uncertainty about the audio setup, indicating a struggle to ensure their voice is being picked up correctly.
  • After confirming that the audience can hear them, the speaker apologizes for potential distractions due to throat clearing.

Market Analysis on a Friday

  • The speaker reflects on trading activity during the last hour of trading on a Friday, hinting at market dynamics typical for this time.
  • They mention having two contracts remaining from earlier trades, detailing specific prices where they executed trades.

Trading Strategy Insights

Scalping and Fair Value Gaps

  • The speaker discusses scalping strategies while referencing a "Fair Value Gap," emphasizing its importance in their trading approach.
  • They note that short covering is common on Fridays and highlight key indicators like volume and balance in their analysis.

Propulsion Blocks Explained

  • A "propulsion block" is introduced as an important concept; it should not retrace below its midpoint if a rally is expected.
  • The speaker stresses the significance of observing price action around these blocks to predict market movements accurately.

Market Dynamics and Price Action

Observations on Price Movement

  • If price trades through certain levels, it may indicate potential downward movement towards areas of volume balance.
  • The discussion includes analyzing recent lows in relation to propulsion blocks, which serve as critical thresholds for traders.

Analyzing Sell Side vs. Buy Side Dynamics

  • The speaker elaborates on sell side dynamics below specific lows and buy side opportunities above those levels, emphasizing flexibility within small ranges.

Final Thoughts on Trading Strategies

Key Levels and Repricing Considerations

  • They discuss how overshooting certain candle levels can be permissible but must be followed by immediate rejection for bearish trends to continue.

Signature Patterns in Price Action

Market Analysis and Price Action Observations

Current Market Conditions

  • The market is currently fluctuating between a low of 8750 and a high of 8675, primarily interacting with the fair value gap. There are no significant price movements expected in this hour as it’s Friday.
  • A liquidity pool is resting at the short-term high, indicating that price action is respecting the midpoint encroachment. Observations on micro market structures are being made to identify potential gravitation points.

Understanding Price Dynamics

  • Flexibility with certain price dynamics, such as volume imbalances, allows for more fluid trading strategies. Price can move through these areas before returning to act as support or resistance.
  • Fair value gaps require stricter adherence; if broken, they can be reclaimed only if price returns above or below them after moving away.

Trading Insights and Challenges

  • Some traders report issues with broker feeds not displaying volume imbalances accurately. It’s suggested to focus on mini contracts for better insights into price action.
  • Attention shifts to specific order blocks and sell signals within identified volume imbalances, which may indicate deeper pricing adjustments.

Impact of External Factors

  • Today's trading was characterized by lethargic and choppy movements. A notable high was called at 4101.50, which remains the daily high.
  • The unpredictability introduced by Fed speakers can lead to erratic price actions; new traders should prepare for deviations from traditional trading rules during such events.

Navigating Spotty Market Conditions

  • The speaker emphasizes skepticism towards conventional interpretations of market reactions to Fed statements, suggesting that actual market behavior often diverges from perceived narratives.
  • "Spotty" markets present challenges due to multiple volume imbalances making it difficult to predict smooth price runs toward specific levels.

Market Structure and Trading Strategies

Anticipating Market Movements

  • The speaker discusses the potential for a market rally, suggesting that if support is found at current levels, it could lead to a macro run towards previous highs.
  • Emphasizes the importance of price action; if the price goes above a certain level and finds support, it may indicate a rally. Conversely, failure to do so could result in a downward movement.

Understanding Market Gaps and Structures

  • Introduces the concept of market structure shifts after trading into discounts, highlighting the significance of fair value gaps in determining future price movements.
  • Cautions against taking long positions without considering inefficiencies in the market; suggests placing stop losses strategically around 89.25 due to existing gaps.

Order Blocks and Price Action

  • Discusses order blocks as critical areas where price should ideally not slow down; emphasizes that an ideal scenario would see prices move through these blocks without hesitation.
  • Highlights the need for quick movement through order block midpoints (mean thresholds), indicating confidence in upward momentum.

Monitoring Candle Behavior

  • Stresses that if prices merely bounce off order blocks without significant movement upwards, it may signal consolidation or reversal risks.
  • Indicates that aggressive movement through key levels (like 95.25) is essential for confirming bullish sentiment.

Observing Market Dynamics

  • Expresses concern over retracements back into fair value gaps, which can complicate upward trends and increase risk for traders with stop losses set too close.
  • Urges traders to watch upcoming candles closely for immediate upward movements upon opening to confirm bullish intentions.

Key Levels and Liquidity Considerations

  • Identifies specific price points (e.g., 40.97.5 and 47.90) as crucial areas where traders should focus their attention during trades.
  • Describes how observing speed and distance in candle formations can serve as confirmation signals for expected market behavior.

Final Thoughts on Trade Execution

Understanding Market Dynamics and Trading Strategies

The Importance of Consistency in Trading

  • Emphasizes the significance of consistency in trading, noting that while the speaker has 30 years of experience, beginners must overcome initial discomfort to learn effectively.
  • Discusses a specific trading setup involving buy-side liquidity and how recognizing patterns can lead to successful trades.

Analyzing Price Movements

  • Highlights a practical example where a trader could capitalize on price movements by identifying key levels, such as the closing price acting similarly to high fair value.
  • Advises against limiting potential gains when nearing significant market windows, suggesting traders should allow for upward movement without shortchanging themselves.

Managing Trades Effectively

  • Suggests placing limit orders at new highs while maintaining a runner position to capture additional gains if the market continues to rise.
  • Stresses the importance of observing price behavior around algorithmic levels rather than relying solely on traditional indicators like moving averages or supply/demand zones.

Engaging with Live Trading Sessions

  • Encourages viewers watching live sessions to show appreciation through engagement (thumbs up), which motivates continued free content creation.
  • Reflects on how price often behaves predictably within certain ranges during trading sessions, indicating an understanding of market dynamics is crucial for success.

Recognizing Key Levels and Liquidity Pools

  • Describes strategies for taking partial profits at new highs while ensuring that critical lows remain intact to avoid reversals.
  • Explains how institutional traders set their stops above previous highs, leading to significant market movements as they seek liquidity.

Personal Responsibility in Trading Success

  • Reminds viewers that achieving success in trading requires personal effort and understanding rather than merely following instructions.

Market Analysis and Trading Strategies

Overview of Market Movements

  • Discussion on the market's potential to breach significant levels, specifically referencing a "big caffeine bar" as a metaphor for market momentum.
  • Emphasis on the importance of stop-loss placements and the trader's discomfort with retracement after holding positions too long.
  • Mention of algorithmic trading influences, highlighting anxiety stemming from personal distractions while monitoring trades.

Key Levels and Trading Decisions

  • Identification of critical price levels (4103, 4104, 4105), indicating where traders should focus their attention for potential breakout opportunities.
  • Strategy discussion regarding liquidity pools and how they can affect trading decisions in the final minutes before market close.

Market Behavior Insights

  • Explanation of typical market behavior during non-trending days, noting that intraday highs often pull back before closing near those highs.
  • Commentary on expected price action around key resistance levels (e.g., 41.75), suggesting intervention strategies if certain conditions are met.

Personal Reflections and Time Management

  • Personal anecdotes about spending time in furniture stores, illustrating how personal life can impact trading focus and decision-making.
  • Consideration of balancing professional commitments with family time, hinting at possible changes to future trading sessions or content delivery.

Technical Analysis Techniques

  • Discussion on fair value gaps as potential resistance points; traders should monitor these areas closely for signs of support or rejection.

Trading Insights and Personal Reflections

Closing Trades and Analyzing Levels

  • The speaker discusses the importance of knowing when to close a trade, expressing satisfaction with their analysis at the 4101.50 level but noting that further movement past this point was unexpected.
  • They highlight another significant level for daily highs at 4104 or 4105, indicating a preference for seeing a run through 4109, which did not occur as anticipated.

Charting and Self-Reflection

  • Emphasis is placed on maintaining a positive mindset in trading journals; negative experiences like being stopped out should not be included to avoid subconscious negativity.
  • The speaker expresses gratitude for the time spent with participants during the week and mentions plans to rest over the weekend.

Weekend Plans and Live Stream Benefits

  • The speaker clarifies they will not conduct Twitter spaces over the weekend but will share pre-market charts on Sunday evening.
  • They reflect on enjoying live streams due to their immediacy compared to video production, which involves extensive editing and review.

Mentorship Dynamics

  • A request is made for participants not to share their trades based on live calls, as it creates anxiety for the speaker regarding potential risks taken by others.
  • The speaker stresses that they want participants to develop their own analytical skills rather than relying solely on their guidance.

Managing Expectations and Anxiety

  • The speaker finds it disrespectful when participants label them with titles like "the goat" or "king," emphasizing respect in interactions instead.
  • They express concern about hearing success stories from trades taken based on their calls, fearing it may lead others into risky situations prematurely.

Conclusion and Book Review Mention

Audiobook Review and Insights on Trading Psychology

Overview of the Audiobook Experience

  • The speaker listened to an audiobook over three days, totaling around six hours. They found it enjoyable and recommend considering it.
  • The speaker committed to providing a fair review, stating they would express any criticisms respectfully if necessary. However, they enjoyed the book overall.

Content and Themes of the Book

  • The book contains humorous elements and addresses truths often overlooked in trading. The speaker refrains from revealing specifics to encourage listeners to experience the content themselves.
  • It focuses on how traders think and what they should expect in their trading journey, emphasizing personal experiences over technical skills or strategies.

Importance of Psychological Management in Trading

  • The speaker finds understanding a trader's mindset—how they manage emotions like fear, greed, anxiety, and performance anxiety—more crucial than learning specific trading techniques.
  • They believe that emotional management is vital for success in trading rather than just focusing on charting skills or methodologies.

Recommendations for Potential Readers

  • While not deemed essential reading immediately, the speaker suggests acquiring the book when possible due to its valuable insights into trader psychology.
  • Audiobooks are preferred by the speaker for convenience; they can listen while multitasking (e.g., driving or exercising).

Future Engagement Plans

  • The speaker plans to share charts with annotations on Twitter instead of TradingView due to a desire to avoid additional management responsibilities.
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.