ICT Forex - Time & Price Theory

Introduction to Time and Price Theory

The teaching provides a generalized overview and introduction to time and price theory. It covers the importance of time and price, the fractal nature of price action, and the significance of higher timeframe charts.

Time and Price Characteristics

• Price action is fractal in nature, meaning that everything seen on one timeframe can be replicated on another.

• Higher timeframe charts have more significance than lower ones because they provide a macro institutional bias.

• Monthly charts are particularly useful for analysis as they give all the depth and detail needed from a macro standpoint.

• Large institutions use algorithmic systems that key off monthly and weekly opening prices.

Analysis of Euro Dollar Monthly Chart

The section analyzes the Euro Dollar monthly chart using directional bias, swing lows, and other key levels.

Directional Bias

• A bullish or bearish perspective is determined by analyzing the monthly chart.

• If deemed bullish, traders look for buying opportunities at or below the opening price; if bearish, selling short at or above it.

Swing Lows

• Swing lows are formed when price attempts to drop lower but trades back above equal lows.

• A three-bar pattern consisting of a left candle with a higher low, center candle with equal or lower low, and right candle looking to the right confirms swing lows.

• Once swing lows are confirmed, traders can start looking for bullish opportunities.

Key Levels

• Key levels help fine-tune analysis by providing specific targets for entry/exit points.

• In 2017, a specific target of 1.20 was called based on analysis of Euro Dollar monthly chart.

Understanding Market Movement

In this section, the speaker discusses market movement and how to identify support and resistance levels.

Identifying Support and Resistance Levels

• The market cannot go any higher than the true resistance level.

• Seek liquidity above high points to measure market movement.

• Seek liquidity below low points to measure market movement.

Analyzing Long-Term Trends

In this section, the speaker discusses analyzing long-term trends using a monthly chart of opening prices.

Analyzing Long-Term Trends Using Monthly Chart

• Use a monthly chart with opening prices after a swing low and violation of an old low.

• Look for validation with the swing low being in fact valid.

• Plenty of time to get prepared before starting the hunt for lungs.

Short Term Trading vs. Long Term Trading

In this section, the speaker discusses short term trading versus long term trading and how to use higher timeframe charts for larger or higher timeframe perspective.

Short Term Trading vs. Long Term Trading

• Short term intraday trading is not suitable for everyone.

• Higher timeframe perspective can be achieved using monthly charts with opening prices after a swing low and violation of an old low.

Identifying Buying Opportunities

In this section, the speaker discusses identifying buying opportunities by looking at signatures in price action that support bullish ideas.

Identifying Buying Opportunities

• Look for signatures in price action that support bullish ideas.

• Look for willingness to go below opening price and then find buying.

• Energetic price action once swing low forms indicates strong buying opportunity.

Trading Strategies for Long-Term Highs

In this section, the speaker discusses trading strategies for long-term highs and how to be mindful of potential retracements.

Using Longer Timeframe Levels

• When using longer timeframe levels, expect a greater range of movement past those price points.

• Fibonacci can be used to help identify these levels, but it's not always accurate.

Weekly Opening Price

• The weekly charts provide an intermediate institutional bias that is good for swing trades or short-term trades lasting two weeks to a month.

• If analysis leads to a bullish weekly perspective, focus on buying at or below the weekly opening price. If bearish, focus on selling short at or above the weekly opening price.

• Large shifts in price that originate from the macro monthly bias will provide the framework for weekly opening price setups. However, not every week will move in agreement with the macro directional bias.

Examples of Weekly Opening Price Setups

• While we're bullish, focus on buying at or below the weekly opening price when bullish and when we're bearish on a weekly we're gonna be focusing on selling short at or above the weekly opening price.

• Be mindful that even though we have the weekly opening price and it does trade below it we may be needing to retrace deeper after a retracement slight consolidation.

• There are opportunities where Christ shares a willingness to show buying strength below/above the opening price of the weekly range.

Understanding Daily Price Action

In this section, the speaker discusses how price action is fractal and how the daily chart provides a short-term institutional bias. The speaker also explains how to identify previous day's highs and lows, weekly highs and lows, entry week eyes and lows, and liquidity reference points.

Fractal Nature of Price Action

• Price action is fractal.

• What we see on other timeframes can be seen on the daily as well.

• The highest probabilities in trade in the daily chart is when both the monthly and weekly support the trade idea.

Short-Term Institutional Bias

• The daily chart provides us with a short-term institutional bias.

• Large institutions insurance companies and banks look at relative to the daily timeframe that's going to be their short-term.

• If we're bullish relative to the daily timeframe we are looking to be buying at or below the daily opening price.

• If we're bearish on the daily we're gonna be focusing on selling short at or above the daily opening price.

Importance of Previous Day's Highs/Lows, Weekly Highs/Lows, Entry Week Eyes/Lows, Liquidity Reference Points

• It's important to know previous day's highs and lows weekly highs and lows entry week eyes and lows.

• Knowing what liquidity reference points are there specific levels that will help you in your development as a technical analyst.

Finding Highest Probability Setups

In this section, the speaker highlights that even though there are tools available for finding setups every single trading day it takes a lot of effort and experience to get to that level. He emphasizes studying charts when there are really good opportunities like buying below opening price where does that sit in relationship with weekly range & monthly range.

Trading Every Day Is Not Possible

• Even day trading is not every day trading.

• It takes a lot of effort and experience to get to the level where you can find setups yourself every single trading day.

Importance of Studying Charts

• Study charts when there are really good opportunities like buying below opening price where does that sit in relationship with weekly range & monthly range.

• Highlighting the proper stage when these explosive price moves that move directionally biased happen will help you figure out where the highest probability setups are.