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ICT Mentorship 2023 - Market Review June 24, 2023
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ICT Mentorship 2023 - Market Review June 24, 2023

Market Analysis and Fair Value Gaps

Overview of the Dollar Index

  • The speaker introduces a review of the dollar index, highlighting a fair value gap from last week's trading.
  • They discuss potential resistance at this level, indicating that how the market reacts after hitting it will be crucial for future movements.

Anticipating Market Movements

  • The speaker emphasizes waiting for Sunday’s opening and Monday's trading due to global events that could impact market volatility.
  • A daily chart is referenced, showing no imbalance despite the weekly chart indicating otherwise; they note previous support levels.

Weekly Fair Value Gap Insights

  • The discussion includes a fair value gap on the weekly chart, suggesting traders should analyze their own charts for better understanding.
  • Agricultural issues like drought affecting crops are mentioned as potentially bullish factors for grain prices, which may influence the dollar index.

Trading Strategy Considerations

  • The speaker advises focusing on day trading rather than long-term analysis due to current market conditions and uncertainties.
  • They describe an ideal trade model from 2022 involving balance and structure shifts in market behavior.

Breakaway Gaps and Market Structure

  • A breakaway gap is defined as a significant price movement near swing highs or lows; aggressive drops signal strong market trends.
  • Discussion of inefficiencies in e-mini S&P charts indicates areas where price action may resume upward movement based on volume imbalances.

NASDAQ Comparison

Understanding Opening Range Gaps in Trading

Concept of Opening Range Gaps

  • The term "opening range gap" refers to the price difference between where the market settles at the end of a trading session and where it opens the next day. This is particularly noted during the New York session.
  • An opening gap can act as resistance; for instance, if prices trade up into an opening gap and then sell off, this behavior indicates its significance in trading strategies.

Characteristics of Opening Range Gaps

  • The speaker emphasizes that they do not favor trading opening range gaps beyond five days, suggesting these gaps have a limited lifespan in terms of relevance.
  • After five days, the speaker loses interest in using these gaps as support or resistance levels, indicating a preference for short-term analysis.

Trading Strategies Involving Opening Range Gaps

  • A specific example is provided where prices traded above half of an opening range gap before returning to test lower levels. This illustrates how traders might use these gaps to gauge market movements.
  • The discussion includes how order flow impacts trading decisions around these gaps, highlighting that complete closure isn't always necessary for successful trades.

Market Behavior and Fair Value Gaps

  • The speaker mentions their interest in daily fair value gaps and how they relate to overall market movement. They provide insights on targeting specific price levels based on previous sessions' data.
  • During lunchtime trading hours (12 PM - 1:30 PM), there was a notable upward movement towards buy-side targets, demonstrating how timeframes can influence trading outcomes.

Analysis Techniques and Market Structure

  • The importance of measuring price movements with Fibonacci retracement levels is discussed as a method to identify potential reversal points within opening range gaps.
  • The speaker critiques traditional support/resistance methods by emphasizing their approach focused on precise levels rather than broad ranges, which helps eliminate guesswork in trades.

Conclusion on Market Dynamics

  • As markets react to various factors including electronic trading hours, understanding specific ranges becomes crucial for predicting future movements effectively.

Market Analysis and Trading Strategy

Overview of Market Movement

  • The discussion begins with an analysis of market movement, focusing on the largest move of the day, which was downward. The speaker expresses a bearish bias and indicates a desire to go short.
  • A reference is made to Twitter for additional insights, highlighting that around 75 handles were taken out during this period. The speaker encourages viewers to check their Twitter account linked on their YouTube channel.

Trading Gaps and Execution

  • The speaker identifies a fair value gap on the one-minute chart, suggesting that traders would have been filled at this point despite potential drawdown concerns. They mention specific trading rules for an event referred to as "Super Bowl."
  • A retracement into lunch is noted, with buy-side activity observed before another trap move occurs at 1:30 PM, indicating further upward movement.

Key Levels and Imbalances

  • Between 2 PM and 3 PM, the focus shifts to identifying imbalances for entry points aligned with the discussed directional bias. A specific trade setup is mentioned during this timeframe.
  • The session sees a significant drop below relative equal lows into a daily fair value gap before retracing back up into range.

Daily Fair Value Gap Insights

  • The speaker highlights a previously identified fair value gap in the daily chart for ES (E-mini S&P 500), emphasizing their bearish outlook throughout the day.
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.