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ICT Mentorship Core Content - Month 05 - Trade Conditions & Setup Progressions
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ICT Mentorship Core Content - Month 05 - Trade Conditions & Setup Progressions

Lesson 6.2: Trade Conditions and Set Up Progression

In this lesson, we will be discussing trade conditions and set up progression. We will outline a 1200 pip move and focus on buying opportunities when the market is at a deep discount on a monthly, weekly, and daily timeframe.

Focal Points for Entries on Long Positions

  • Mitigation blocks, bullish breakers, liquidity voids, fair value gaps, bullish order blocks, rejection blocks, old lows or old highs are our focal points for entries on long positions.
  • The first objective is to reach for a mitigation block. If there's a breaker of any kind, we'd aim for that. Then we look for any range to be filled in for a liquidity void and aiming for fair value gaps in the premium range of the market.
  • We would also look at value gaps bearish order blocks and then look for a rejection block and/or old high or old historic low.

Selling at Premium and Buying Back at Discount

  • When looking at bearish examples we would sell short at a bearish PD array aiming to cover that short position with one of the bullish PD arrays.
  • The idea is to sell at premium prices and buy back at discounted prices.

Study Points

  • When studying price action it's important to keep in mind whether markets are trading near premiums or discounts as they will always initially look to rebalance towards equilibrium.
  • If you buy it at a real deep discount and just get back to equilibrium you'll find many trades like that.
  • When markets are in premium again if you're in equilibrium you're going to be focusing on the market potentially moving up into one of these monthly PD arrays that possibly may be a shorting opportunity.

Japanese Yen Cash Price Example

  • We're looking at the daily cash price for Japanese Yen.

Analyzing the Dollar Yen Pair

In this section, the speaker discusses how to analyze the dollar yen pair and explains how it differs from other markets.

Understanding the Dollar Yen Pair

  • The dollar index is the front currency when paired with a currency like the Japanese yen.
  • When watching dollar yen price action, you're watching the advancement of the dollar versus decline of the Japanese yen.

Monthly Chart Analysis

  • The monthly chart shows a rally in 2016 followed by a drop.
  • Equal lows on this chart are expected to be cell stops.
  • A bullish order block is formed by two consecutive down candles.

Weekly Chart Analysis

  • A gap between two candles indicates that price has only been delivered on the downside.
  • An up candle before a down move is a bearish order block.

Identifying Key Levels in Trading

In this section, we learn about key levels in trading and how to identify them.

Defining Key Levels

  • Key levels are areas where traders expect price to react.
  • These levels can be identified using support and resistance lines or trendlines.

Using Fibonacci Retracements

  • Fibonacci retracements can help identify key levels based on previous market movements.
  • These retracements are calculated using ratios derived from Fibonacci numbers.

Trading Strategies for Key Levels

In this section, we learn about different trading strategies for key levels.

Breakout Trading Strategy

  • Breakout trading involves buying or selling when price breaks through a key level.
  • This strategy requires careful analysis of market trends and patterns.

Pullback Trading Strategy

  • Pullback trading involves buying or selling after a brief reversal in price.
  • This strategy can be used to take advantage of short-term market movements.

Conclusion

In this section, the speaker summarizes the main points covered in the video.

Key Takeaways

  • Understanding the dollar yen pair is important for successful trading.
  • Identifying key levels is crucial for predicting market movements.
  • Different trading strategies can be used depending on market conditions.

Mapping Out Trading Conditions

In this section, the speaker discusses how to map out trading conditions using charts and identifies key objectives for trading.

Identifying Objectives

  • There is a fair value gap between two candles that would be an objective to reach.
  • A bullish order block can be used as a buying point. The November low is trading back into an old weekly bullish order block.
  • Equal body candles above the weekly bullish order block indicate another rejection block candidate and upside objective.
  • There is a fair value gap up where prices have only delivered on the downside that would be an objective.

Daily Time Frame

  • The speaker moves to a daily chart and maps out the hierarchy between the weekly and daily charts.
  • On the daily chart, there are old highs, equal highs, and a fair value gap.
  • The last up candle before the down move has a low of 118.55 which shows how prices reached up into premium level over here.

Down Candles in Uptrend

  • If we don't see any retracement to come back into for a daily bullish order block or if we saw three consecutive down candles in an uptrend, institutions will buy at that time.

Trading off Long-Term Perspectives

In this section, the speaker discusses how to trade off long-term perspectives and higher time frame charts.

Using Levels from Monthly and Weekly Charts

  • Having levels from monthly and weekly charts provides context for lower time frame daily trades.
  • Retracements can go through what is seen on the daily chart, so it's important to have monthly and weekly PD arrays on your charts.
  • Even if you're a day trader, having monthly and weekly levels on your platform is crucial because it can impact short-term trading.

Support Structure for Price

  • Monthly and weekly levels provide support structure in the form of support or resistance for price to find new buying or selling at.
  • Just because there's a bullish order block or a void that gets filled in doesn't mean that it will keep price up. Price could come back on the daily chart and retrace rather deeply.

Logical Areas for Trading

  • The market has been priced in on one side, moving from a discount all the way up to a long-term premium.
  • Logical areas for trading are those with clear and distinct bearish order blocks, such as last up candles before sharp down moves.

Tradable Ranges

  • Each range is tradable even if you don't hold all the way through to get to the deep premium market.

Using PD Arrays to Understand Institutional Order Flow

In this section, the speaker explains how to use PD arrays to understand institutional order flow and how losing a level on a daily chart can lead to dropping back into levels seen on a weekly chart.

Understanding Institutional Order Flow

  • Use PD arrays to understand institutional order flow.
  • Horizontal lines indicate old highs and equal highs.
  • Consolidation is down the move.
  • Every time there is a down candle followed by an up move, it indicates long-term hedging.

Transposing Higher Time Frame Levels onto Daily Chart

  • Use higher time frame levels and transpose them onto a daily chart.
  • Future order blocks on a daily time frame may occur around the time of price hitting certain levels.
  • Losing a level on a daily chart can lead to dropping back into levels seen on a weekly chart.

Recapitalizing Longer Term PDRA

  • If you get knocked out after buying at lower prices, go back to the weekly chart and see if it's returning back to that Weekly order block.
  • Big surges in price can be understood by going out to the weekly chart.
  • Losing a level on a daily chart is not concerning as banks often recapitalize longer term PDRA.

Understanding Weekly Ranges

In this section, the speaker explains how to identify significant price moves in the market by looking at weekly ranges.

Identifying Significant Price Moves

  • The speaker explains that when the market movement aligns with the weekly objectives or levels identified with PD arrays, it indicates a significant price move.
  • Large funds, banks, and institutions are likely to take advantage of these significant levels because they are long-term and poised for such moves.

Conclusion

Understanding weekly ranges is crucial in identifying significant price moves in the market. By paying attention to these levels, traders can make informed decisions about their trades.

Playlists: 2017 ICT Private Mentorship Core Content Month 05
Video description

2017 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in January 2017. 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.