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January 2023 NonFarm Payroll Review & HTF Concepts
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January 2023 NonFarm Payroll Review & HTF Concepts

Market Review and Insights on ES Trading

Overview of Friday's Price Action

  • The speaker welcomes viewers and introduces a review of the price action for the ES (E-mini S&P 500 futures) from Friday, indicating a focus on this market rather than NASDAQ.
  • The trading range is highlighted, emphasizing the importance of being cautious until a breakout occurs. A volume imbalance area is identified as a target for potential upward movement.

Key Levels and Market Dynamics

  • Two significant lows at 3822.5 and 3814.5 are monitored as potential break points, with an expectation that these levels could be tested during trading.
  • An SMT (Smart Money Technique) divergence is noted where the micro E-mini (MES H2023) traded lower than the standard E-mini (ES H2023), suggesting differing market behaviors.

Chart Analysis Techniques

  • The speaker stresses the importance of marking key levels on daily charts to maintain visibility across all time frames, which aids in decision-making during trades.
  • Transitioning to an hourly chart reveals relative equal lows that were anticipated to be tested, with specific targets set based on historical price action.

Anticipated Market Movements

  • A scenario is presented where if prices drop below certain levels due to non-farm payroll data, it would create opportunities for buying back into higher ranges.
  • Discussion includes sell stops positioned below relative equal lows, indicating potential market reactions based on trader behavior around these levels.

Time Management in Trading

  • Emphasis is placed on having accurate time settings in trading platforms to ensure real-time data usage; discrepancies can lead to missed opportunities or incorrect analysis.
  • The speaker mentions "time traveling" by using real-time data feeds that are ahead of typical chart displays, reinforcing the need for live execution in trading strategies.

Power Three Strategy Insights

  • Introduction of a "Power Three" filter level at 3847.5 suggests strategic entry points for traders looking to capitalize on downward movements after testing this level.

Understanding Trading Discipline and Market Dynamics

Importance of Self-Discipline in Trading

  • The speaker emphasizes that laziness will hinder success in trading, urging learners to invest time and effort into their education.
  • A specific market event at 8:30 is highlighted, where the speaker notes a potential spike down to level 3014, indicating the unpredictability of employment numbers.
  • The speaker shares past mentorship experiences, advising against trading during non-farm payroll events but suggesting it can be useful for studying price action.

Analyzing Price Action and Market Behavior

  • Discussion shifts to lower time frames, focusing on buy-side imbalances and sell-side inefficiencies within specific candle ranges.
  • The concept of "caffeine bars" is introduced, referring to large candles that indicate significant market energy; this term reflects the speaker's personal trading vocabulary.

Understanding Market Levels and Reactions

  • The importance of recognizing unique terminology created by the speaker is stressed for better comprehension over time.
  • Observations are made about price movements towards relative equal highs after dipping into a specified area.

Strategic Decision-Making in Trading

  • The speaker tweets about monitoring level 3814 for potential market reactions while emphasizing the need for proof before making trades.
  • A cautionary note is given regarding stop losses below old lows, highlighting risk management strategies.

Navigating High Impact News Events

  • The discussion includes how high-impact news can overshoot expected price levels; thus, careful analysis is required during such events.

Market Analysis and Trading Strategies

Understanding Market Levels

  • The speaker discusses the likelihood of price movement above the opening price, considering a potential drop below a specific level (3014) to target 3804, an old daily low.
  • Previous discussions on trading strategies were shared via Twitter, emphasizing the importance of understanding market levels rather than relying solely on payroll data.
  • The speaker suggests using daily charts to identify significant levels like 3804 for better trading decisions.

Analyzing Short-Term Price Movements

  • A one-minute chart is introduced to refine analysis; the speaker highlights a specific area where price action could indicate future movements.
  • Emphasis is placed on monitoring whether certain price areas remain open without retracing back down, which could signal bullish momentum.

Identifying Key Trading Signals

  • The discussion includes identifying short-term highs and gaps in price action that may indicate potential buy stops at 3876.
  • The speaker warns that traditional support and resistance concepts taught by retail educators may mislead traders into thinking they are safe from stop hunting.

Critique of Retail Trading Logic

  • The speaker critiques common retail trading theories as flawed, arguing they create targets for liquidity hunters rather than reflecting true market dynamics.
  • There’s a strong assertion that market movements are driven by liquidity needs rather than random events or manipulation.

Strategic Buying Approaches

  • When prices trade above short-term highs, any retracement into key candle areas is viewed as an opportunity to buy near the midnight opening price in New York time.
  • The speaker emphasizes consistency in their predictions through social media posts, asserting no deletions or changes have been made to previous tweets regarding market expectations.

Understanding Daily Chart Analysis

Importance of Accurate Opening Prices

  • The daily chart's opening price may not be accurate; it's essential to refer to the New York midnight opening price for better accuracy.
  • Use a 15-minute time frame to identify this opening price, which is crucial for making informed trading decisions.

Buying Strategies Based on Market Structure

  • When bullish, aim to buy at or below the identified level on the daily chart, particularly during accumulation phases.
  • Focus on liquidity levels and avoid distractions from current prices; understanding higher time frame analysis is key.

Recognizing Market Shifts

  • Buy opportunities arise when prices are above the midnight opening price, especially if supported by strong market momentum.
  • Identify bullish order blocks and swing highs as indicators of potential upward movement in market structure.

Analyzing Price Levels and Imbalances

  • Smooth levels in charts often indicate future volatility; markets tend to create jagged patterns rather than maintain smooth support/resistance lines.
  • Acknowledge that smooth edges will likely become jagged as the market seeks equilibrium around these levels over time.

Observing Price Action and Liquidity

  • Focus on significant ranges while ignoring minor fluctuations; observe how price reacts around key liquidity points without chasing movements.
  • Be patient with trades; wait for clear signals before entering positions based on observed market behavior.

Clarifying Miscommunication in Trading Levels

  • Ensure clarity when discussing specific price levels; miscommunication can lead to confusion about entry points.
  • Emphasize understanding shifts in market structure when prices break above previous highs, indicating potential buying opportunities.

Concentrating on Key Trading Ranges

  • Maintain focus on critical areas within your trading framework rather than getting distracted by past candle formations.

Market Analysis and Trading Strategies

Understanding Market Ranges

  • The speaker discusses a recent short-term high, indicating that the market has broken through this level, suggesting potential upward movement. They emphasize viewing the daily range as an algorithm would.
  • The concept of external range liquidity is introduced, where the market is expected to expand beyond established highs and lows, leading to upward price movements.

Utilizing Social Media for Trading Insights

  • The speaker encourages followers to engage with their tweets by copying links into trading charts for accountability and educational purposes.
  • They express transparency in their trading approach, stating they will not delete tweets regardless of outcomes, reinforcing their commitment to honesty in trading discussions.

Focused Trading Approach

  • A cautionary note is made about trading on payroll days; the speaker suggests avoiding trades during these times due to unpredictability.
  • Emphasis is placed on focusing solely on specific price action rather than getting distracted by various timeframes (hourly, daily charts).

Key Levels and Trade Execution

  • After breaking above a short-term high, the speaker describes taking profits from a larger position while leaving some contracts open for further gains.
  • Specific levels are highlighted: 38.95 for buy-side opportunities and 38.85 as an old daily high that traders should monitor.

Educational Value of Charting Past Trades

  • The importance of reviewing past tweets and chart annotations is stressed as a learning tool for understanding market behavior over time.
  • By analyzing previous trades after-the-fact, traders can gain insights into decision-making processes without needing real-time access.

Anticipating Market Movements

  • The speaker visualizes potential price movements within a shaded area on the chart, predicting upward trends based on current market conditions.
  • Expectations are set for prices to gravitate towards higher levels based on historical data and smooth price action patterns observed in the market.

Liquidity Considerations in Trading

  • Discussion around liquidity highlights its significance; large funds typically utilize previous highs/lows as reference points for placing orders which influences market movements significantly.

Understanding Market Dynamics and Trading Strategies

Key Concepts in Trading Liquidity

  • The importance of identifying daily highs for buy stops and daily lows for sell stops is emphasized, as these can serve as targets and frameworks for trade entries.
  • Observing market behavior during expansions helps traders anticipate potential reversals; a strong candle closing near its daily high suggests continued upward movement.
  • The concept of returning to the range at specific times, such as 3 PM, is introduced, highlighting how markets often revisit previous volume imbalances.

Analyzing Price Action

  • The analysis of price action shows that candles respect certain levels before retracing; this behavior can be used to identify potential entry points.
  • Understanding the "power three" concept—accumulation, manipulation, distribution—provides insight into smart money movements and market inefficiencies.

Daily Range Tracking

  • Traders are encouraged to maintain awareness of the daily chart throughout trading hours to build confidence in their positions and avoid being shaken out by minor fluctuations.
  • Specific price levels (e.g., 3814, 3876.25, 3885, 3896.25) are identified as key targets based on market structure and inefficiencies.

Closing Strategies

  • As the trading day approaches its end (around 3 PM), it’s advised to take profits at target levels rather than holding through potential pullbacks.
  • A typical pattern includes a wick forming at the top end of a candle before closing off the day's high; recognizing this can aid in making informed exit decisions.

Unique Insights into Market Behavior

  • The discussion highlights how understanding candle patterns can lead to better predictions about future price movements within a trading day.
  • Emphasis is placed on unique methodologies not commonly found in traditional trading literature; this knowledge aims to differentiate effective strategies from conventional support/resistance teachings.

Educational Approach

  • The speaker asserts that their teaching methods provide insights not available elsewhere, aiming to equip traders with accurate tools for understanding market dynamics.

Live Stream Strategy and Market Insights

Commitment to Live Streams

  • The speaker commits to conducting two live streams per week, emphasizing the importance of not becoming overly reliant on them for learning.
  • The focus is on teaching one effective trading setup per week rather than continuous streaming, encouraging practice over dependency.

Trading Setup and Data Limitations

  • Acknowledges limitations in showing real-time data for specific contracts like US 500 CFD during live streams but plans to toggle between different market views.
  • Discusses using equivalent instruments (like US 100 CFD for NASDAQ futures) to provide a baseline understanding for followers.

Market Structure Analysis

  • Introduces concepts of bullish breakers and market structure shifts, highlighting the significance of high and low points in trading strategies.
  • Mentions a mistake made while tweeting levels that did not align with fair value gaps, illustrating the challenges of real-time analysis.

Institutional Order Flow Concepts

  • Explains how short-term highs indicate shifts in market structure and discusses the implications of these shifts on trading decisions.
  • Defines "institutional order flow entry drill," explaining its relevance in identifying potential trade entries based on price movements.

Risk Management Strategies

  • Describes building pyramid positions as a risk management strategy when entering trades, allowing flexibility if initial entries do not perform as expected.

Trading Insights and Liquidity Analysis

Understanding Market Movements

  • The speaker discusses the strategy of avoiding a pyramid structure in trading, indicating a preference for moving in a different manner. They mention taking partial profits at various points to manage risk effectively.
  • A reference is made to buy stops at 3876, which are identified as high-side liquidity. The implication is that this level is likely to attract upward movement in the market.
  • The speaker emphasizes the importance of observing significant price movements above 38.75, noting that such movements can indicate potential expansions and opportunities for profit.

Charting Techniques

  • A suggestion is made to take screenshots of specific candles on charts during trading moments, particularly at 10:36, to aid in trust-building when holding positions.
  • The speaker encourages traders to document their analysis visually by capturing charts at critical moments, reinforcing the value of visual evidence in trading decisions.

Execution and Strategy

  • There’s an emphasis on ensuring no executions are missed during trades; the absence of arrows indicates no active trades were executed at certain levels.
  • Discussion about bullish order blocks highlights their significance in maintaining open positions while managing partial profits effectively.

Levels and Profit Taking

  • The speaker mentions specific levels like 3085 and 3896.25 as targets for profit-taking based on prior analysis shared via tweets.
  • Clarification is provided regarding how chart indicators remain consistent without manipulation; they do not change position or appearance based on market conditions.

Final Thoughts on Trading Practices

Playlists: 2023 ICT Mentorship
Video description

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.