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ICT Emini Futures Review - January 18, 2023
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ICT Emini Futures Review - January 18, 2023

Market Analysis and Insights

Daily Chart Observations

  • The speaker discusses the daily chart from January 11th, highlighting a significant upward candle followed by a lower candle on January 12th, indicating a small fair value gap.
  • A notable drop is anticipated, with emphasis on monitoring the midpoint of the wick from January 9th, which aligns with key price levels for analysis.

Trading Strategy and Fibonacci Levels

  • The speaker expresses enjoyment in creating annotated videos to help students understand market dynamics better, emphasizing the importance of detailed analysis.
  • A recommendation is made to use Fibonacci retracement tools starting from the low of January 13th to identify critical price levels for trading decisions.
  • The specific target level identified using Fibonacci is noted as 3982.50, which should be monitored closely in upcoming trading sessions.

Community Engagement and Mentorship

  • The speaker welcomes viewers back and sets the context for discussing insights shared during a Twitter space session held previously.
  • Acknowledgment of support from students across various platforms is expressed, alongside an awareness of some negative feedback received.

Distinctions in Analysis Approach

  • The speaker emphasizes their unique analytical approach and proprietary algorithm (Enigma), asserting that no one else has access to it or can replicate their market predictions.
  • Clarification about the timing of previous recordings indicates that they are intended to provide valuable insights before trading sessions commence.

Feedback Mechanism and Viewer Interaction

  • Discussion around viewer comments highlights a desire for constructive feedback rather than praise; this aims to maintain focus on educational content rather than personal accolades.

Trading Insights and Market Analysis

Daily Trading Routine

  • The speaker discusses their approach to trading, emphasizing the importance of maintaining a schedule that aligns with family life. They check market conditions in London each morning rather than staying up late to trade.

Navigating Uncertainty in Trading

  • The speaker highlights the necessity of having a clear directional bias or narrative for trading. When such clarity is absent, they admit to waiting for more information before making decisions.
  • Criticism is directed at many Twitter analysts who provide vague predictions without substantial analysis, indicating that even experienced traders can struggle with identifying setups.

Communication During Market Hours

  • The speaker uses Twitter as a communication tool during market hours, sharing insights and specific price levels they are monitoring. This helps followers understand their thought process in real-time.
  • Emphasis is placed on observing price action rather than taking immediate trades based on tweets. Followers are encouraged to learn from the speaker's experience over time.

Understanding Market Signals

  • The speaker clarifies that while they may indicate bullish or bearish sentiments through tweets, they do not provide explicit buy/sell signals or stop-loss instructions. Instead, they guide followers toward understanding market dynamics.
  • They stress the importance of recognizing key levels like fair value gaps and order blocks as part of developing personal trading strategies.

Learning Through Observation

  • Observing live price action is presented as an essential learning method for traders. The speaker encourages followers to develop their unique models by watching how patterns emerge in real-time.
  • A recommendation is made for new traders to engage in tape reading for an extended period (minimum six months), which builds a foundational understanding of price movements.

Preparing for Market Sessions

  • The speaker mentions upcoming mentorship sessions starting February 7th but has been providing commentary on Twitter throughout the year leading up to this point.
  • Specific price levels discussed include 40 30.75, which was identified as significant prior to market activity, illustrating the importance of preemptive analysis.

Neutral Bias and Information Gathering

  • When lacking confidence in market direction, the speaker adopts a neutral bias and waits for further information from market openings before making any conclusions about potential movements.

Precision in Trading: Insights from the Fair Bag App

The Importance of Precision in Trading

  • The speaker highlights a specific trading example where the high of a candle on January 10th aligns perfectly with the low of Wednesday's trading, emphasizing precision in Forex and Futures.
  • The speaker is known for their sniper-like precision in Forex trading, which they attribute to their techniques and concepts that students worldwide are successfully implementing.

Challenges in Forex vs. Futures

  • In Futures trading, precision is often achieved "to the tick," while Forex can have discrepancies due to broker spreads, leading to frustrations for traders seeking accuracy.
  • The speaker discusses challenges with tight stop-loss orders in Forex, explaining how brokers may manipulate spreads against traders' positions.

Confidence in Futures Trading

  • Unlike Forex, Futures provide a consistent price across all participants, allowing traders to place stops confidently without fear of being stopped out unfairly.
  • The speaker expresses confidence that if their stop-loss is hit, it indicates they were incorrect about market expectations.

Algorithmic Trading Insights

  • The algorithm used by the speaker demonstrates exceptional performance and precision across various time frames, reinforcing its reliability for trade entries and targets.
  • There is a competitive aspect within the trading community regarding the unique insights shared by the speaker; others may claim similar abilities but lack true understanding or capability.

Evidence of Effectiveness

  • Students have documented successful trades based on teachings from previous discussions, showcasing that these strategies are not hindsight but applicable daily.
  • The algorithm's effectiveness spans all time frames; even longer setups can yield results when approached correctly over daily charts.

Real-Time Application and Results

  • Traders can engage with markets beyond intraday charts; evidence shows setups forming on daily charts that require patience for targets to be reached.
  • A specific example illustrates how accurately predicting market movements can lead to successful trades without ambiguity or approximation.

Conclusion on Market Understanding

  • Emphasizing authorship and ownership of proprietary algorithms reinforces credibility; accurate predictions are made consistently based on solid analysis rather than guesswork.

Trading Insights and Market Dynamics

Responsibility in Trading Signals

  • The speaker emphasizes their commitment to responsible trading practices, stating they will not be pressured into providing trade signals that could conflict with students who have trained under them.
  • They express a desire to respect the integrity of those running signal services, indicating a reluctance to encroach on their clientele.

Market Analysis and Price Action

  • The speaker discusses the importance of waiting for market conditions to clarify before making trades, highlighting uncertainty during overnight sessions.
  • They reference a specific price level (39.61), noting its significance across various time frames as part of their analysis.

Fair Value Gaps and Trading Strategy

  • A fair value gap is identified on the daily chart, classified as buy-side inefficiency; this influences expectations for future price movements.
  • The speaker warns about choppy market conditions and highlights key resistance levels , which were previously discussed as potential targets.

Short-Term Trading Decisions

  • The speaker outlines their strategy for short-term trades based on previous analysis, indicating alignment with bearish sentiment due to market conditions.
  • They mention observing specific price levels (40.36 and 40.40), suggesting these could lead to potential fake breakouts.

Execution of Trades and Market Behavior

  • Two trades are executed where the speaker goes long but ultimately ends up at breakeven due to market reversals; they reflect on the challenges faced in volatile environments.
  • Emphasis is placed on understanding higher time frame levels when executing trades in lower time frames, ensuring clarity in decision-making processes.

Misconceptions About Market Movements

  • The speaker argues against common misconceptions regarding market drops being driven by buying or selling pressure, asserting that algorithms control price movements instead.
  • They describe high-frequency trading as akin to piranhas taking small bites from liquidity rather than causing significant shifts through volume alone.

Understanding Volume's Role in Price Movement

  • Questions are raised about how much volume is necessary for significant price changes, challenging traditional views on volume's impact on market dynamics.

Understanding Market Manipulation and Trading Strategies

Core Reasons Behind Market Movements

  • The speaker emphasizes that market movements are manipulated and controlled, requiring traders to wait for specific price actions to understand the underlying reasons.
  • The speaker claims to provide proof of their trading strategies through daily demonstrations of precise entries, partial exits, target achievements, and effective stop placement.

Authority in Teaching Trading Concepts

  • The speaker asserts their authority in teaching trading concepts, clarifying that they do not intend to come off as arrogant but rather confident in their knowledge.
  • They criticize the notion of counting candles as a method for trading success, stating that true understanding comes from recognizing patterns beyond mere chart references.

Critique of Social Media Traders

  • The speaker warns against social media traders who claim to offer insights based on "Enigma," arguing that such claims lack substance since their methods do not align with actual market behavior.
  • They express frustration with social media influencers who present both bullish and bearish scenarios without providing actionable insights or predictions.

Observations on Retail Trader Behavior

  • The speaker notes how retail traders often draw lines for potential market movements but fail to accurately predict outcomes due to a lack of deep understanding.
  • They highlight the difference between themselves and these traders by emphasizing their ability to back up predictions with evidence and successful execution.

Decision-Making Process in Trading

  • The speaker acknowledges moments when they must wait for more information before making trades, indicating a thoughtful approach rather than impulsive decision-making.
  • They explain the importance of aligning with algorithmic signals before committing to trades, showcasing a disciplined strategy focused on data-driven decisions.

Engaging with Market Dynamics

  • The speaker enjoys observing conflicts between retail trader opinions and algorithmic analysis, suggesting this dynamic can create profitable opportunities.
  • They emphasize entering trades during periods where retail sentiment is misaligned with smart money movements, which often leads to favorable outcomes.

Mentorship Insights

  • In discussing mentorship experiences, the speaker reflects on guiding students through indecisiveness while maintaining confidence in eventual market direction.

Market Analysis and Trading Strategy Insights

Understanding Market Dynamics

  • The speaker discusses the premium range on the daily chart, indicating that multiple attempts to rise have been unsuccessful, suggesting a potential downward movement.
  • There is anticipation of a price spike to Tuesday's high at 40.36 or even reaching 40.40, which was previously identified as an interest level for trading.
  • The speaker emphasizes the importance of identifying fair value gaps and bearish order flow before committing to short positions.

Risk Management and Decision Making

  • Elevated risk levels and market uncertainty are highlighted as reasons for cautious trading; the speaker refrains from making commitments without sufficient justification.
  • The strategy involves entering short positions above specific opening prices (midnight, 8:30 AM, and 9:30 AM), where smart money typically accumulates their positions.

Price Action Observations

  • A focus on price action reveals choppiness in the market; despite expectations for a breakout above Tuesday's high, it fails to materialize.
  • The speaker reflects on missed opportunities due to lack of upward movement past key resistance levels (40.36 and 40.40).

Analyzing Market Structure

  • Discussion about how price drifted down into lower levels (39.82 and 39.73), with reference to candle wicks providing insight into potential support areas.
  • A five-minute chart analysis shows significant choppiness around the opening bell; there’s an expectation for Tuesday's high to be taken out but it does not occur.

Algorithmic Trading Considerations

  • The speaker notes algorithmic trading relies heavily on conditional statements ("if this occurs then that"), emphasizing systematic decision-making based on market behavior.
  • Caution is advised when breaking down short-term lows; trust in market signals is critical, especially when previous highs remain unbroken.

Market Analysis and Trading Strategies

Overview of Trading Expectations

  • The speaker discusses the logic behind their trading strategy, specifically targeting a price run to 4036, potentially spiking to 4040. They emphasize the importance of reviewing their tweets for context.
  • Acknowledges that frequent tweeting may seem overwhelming for those in professional settings but insists on the necessity of staying informed about market movements.

Market Structure and Price Levels

  • Highlights a bearish order block and fair value gap observed in the market, indicating critical levels where price action is expected to react.
  • Discusses how breaking above Tuesday's high would have confirmed a shift in market structure, which did not occur, leading to adjustments in trading expectations.

Entry Techniques and Market Signals

  • Explains the significance of short-term lows and how they influence entry points; emphasizes waiting for confirmation before acting on potential trades.
  • Describes two setups aligned with a large range day using their "power three" concept, showcasing how these setups can lead to profitable trades if executed correctly.

Institutional Order Flow Insights

  • Introduces the concept of "institutional order flow entry drill," a high-frequency trading technique that targets specific price imbalances or gaps in the market.
  • Notes that this technique is widely adopted by firms for entering trades at precise moments when prices touch certain levels, enhancing execution efficiency.

Challenges and Adjustments During Trading

  • Discusses challenges faced during trading sessions, particularly around lunch hours when volatility may increase unpredictably.

Market Analysis and Trading Strategies

Understanding Candle Patterns and Fair Value Gaps

  • The speaker discusses a specific candle pattern that occurred at 10:34 AM New York local time, emphasizing the importance of timing in trading decisions.
  • A fair value gap is identified as the price trades up, with the speaker explaining their internal measurement process to verify market logic.
  • The speaker highlights their advanced teaching methods, suggesting they possess knowledge beyond common trading strategies while acknowledging potential mistakes in communication.
  • Trusting institutional order flow is crucial; the speaker notes how certain candles indicate favorable trading conditions based on previous price movements.
  • The concept of "perfection" in trading is introduced, asserting that precise execution leads to superior outcomes compared to other methodologies.

Market Dynamics and Price Reactions

  • The speaker encourages learners to adapt their understanding of market algorithms, stating that these principles apply universally regardless of personal biases against teaching styles.
  • Analyzing opening prices reveals patterns; when prices hit specific levels, traders can anticipate subsequent movements based on historical data.
  • The discussion includes a detailed breakdown of price action around key levels, illustrating how certain candles act as barriers or triggers for further movement.
  • A focus on afternoon trading dynamics emphasizes the significance of fair value gaps and their role in short-selling opportunities during market fluctuations.
  • The importance of measuring moves from high to low is highlighted as a method for identifying potential range lows and executing trades effectively.

Practical Application of Trading Concepts

  • Specific tick levels are mentioned (e.g., 49.43.75), showcasing how precise targets can be set based on prior analysis and predictions about market behavior.
  • After-hours trading insights are shared; however, the emphasis remains on strategies applicable during regular session hours for bearish traders using opening prices effectively.
  • The concept of fractals in market behavior suggests that larger trends can be observed within smaller segments, allowing traders to apply broader strategies at different scales.
  • Manipulation tactics such as judo swings are discussed; understanding these can help traders navigate premium arrays effectively during volatile periods.

Market Structure and Fair Value Gaps

Understanding Target Levels in Trading

  • When targeting exits, avoid using the low of a fair value gap directly; instead, aim slightly above it (0.5 to 1 point higher) for better results.
  • It's acceptable to exit at levels like 39.44 or 39.45 rather than aiming for an exact target; flexibility is key in trading.

Market Behavior and Timing

  • The market does not linger at specific price points; quick movements can occur, making timing crucial when placing orders.
  • During the New York lunch hour, market structure shifts can be observed as prices interact with fair value gaps.

Analyzing Price Action

  • Individual one-minute candles reflect broader five-minute structures; understanding these relationships helps identify market shifts.
  • A shift in market structure occurs when prices break below established lows on the five-minute chart, indicating potential bearish trends.

Utilizing Multiple Timeframes

  • Transitioning from a five-minute to a one-minute chart allows traders to see detailed price action and identify entry points within fair value gaps.
  • Monitoring various timeframes (one minute, thirty seconds, fifteen seconds) enhances decision-making and position building during trades.

Daily Low Analysis and Market Sentiment

Identifying Key Levels

  • The level of 3961.75 is highlighted as an old daily low; referencing historical data aids in identifying potential support or resistance zones.
  • Traders should not rely solely on classic support/resistance concepts but look for additional signals like fair value gaps or institutional order flow.

Debunking Misconceptions

  • Simply returning to an old daily low does not guarantee a sell signal; context such as existing imbalances must be considered.
  • Criticism regarding execution strategies often stems from misunderstanding the logic behind trading decisions based on imbalances rather than traditional support/resistance levels.

Importance of Contextual Trading

  • Real support and resistance are defined by specific levels influenced by imbalances that traders can anticipate based on time-sensitive factors.
  • Recognizing liquidity patterns around daily highs/lows is essential for effective trading strategies during critical market hours.

Final Hour Trading Dynamics

Strategic Execution Near Daily Lows

  • The final hour of trading (between 3 PM and 4:15 PM) presents unique opportunities due to increased liquidity around daily highs/lows.

Understanding Trading Days and Algorithmic Insights

Defining Trading Days

  • The current trading day is considered "day one," with the previous day as "day two" and the day before that as "day three." This structure helps in analyzing market trends.
  • For example, if today is Wednesday, then Tuesday is day two and Monday is day three. This method aids in identifying daily highs and lows for algorithmic trading.

Analyzing Market Dynamics

  • The highest high and lowest low from these three days create a dynamic matrix of liquidity, which can be utilized for future trade setups.
  • A specific model demonstrates how price movements align with daily lows during bearish trading hours, showcasing the effectiveness of algorithmic strategies.

Evidence of Algorithmic Trading

  • The market's behavior reflects algorithmic principles; price movements are not random but follow established patterns based on prior data.
  • Price reactions at fair value gaps illustrate how trades respond to specific levels rather than arbitrary supply zones.

Importance of Technical Science

  • The speaker emphasizes teaching technical science over retail concepts, arguing that traditional supply and demand theories do not apply to their methods.
  • There’s a sense of responsibility in sharing this knowledge publicly, highlighting the potential misuse by others if they were in his position.

Call to Action for Traders

  • The urgency to utilize shared insights is stressed; time is limited, and traders should take advantage of available knowledge while it lasts.
  • Observations about market behavior suggest that precise pricing aligns with algorithmic expectations rather than mere chance encounters between buyers and sellers.

Embracing Change in Trading Perspectives

  • Skepticism towards conventional beliefs about market operations is encouraged; understanding the underlying mechanics can lead to better trading outcomes.
  • Acknowledgment that many traders may struggle with discipline or profitability despite having access to effective strategies; success requires commitment.

Consistency in Evidence-Based Trading

  • Continuous proof of consistency and precision in trading practices reinforces the validity of the methods being taught.
  • Engagement from traders who show up consistently will receive undeniable evidence supporting these trading strategies.

Trading Insights and Personal Reflections

Precision in Trading Strategies

  • The speaker emphasizes the importance of precise entries and tight stop losses, advocating for taking partial profits at specific levels as taught in their content.
  • They express frustration towards skeptics who doubt their methods, highlighting the focus required to execute trades effectively despite distractions.

Focus and Execution Challenges

  • The speaker discusses their need for a focused environment, avoiding multiple screens or setups that could lead to cherry-picking data.
  • They recount a recent trading experience where they executed trades under pressure but were unable to hold positions for maximum profit.

Market Engagement Strategy

  • The speaker prefers engaging with the market when it is stable enough to provide clear opportunities rather than during erratic movements.
  • They illustrate a micro-trading strategy using fair value gaps, demonstrating how small incremental gains can accumulate over time.

Learning from Market Behavior

  • Emphasizing consistency, the speaker encourages traders to identify patterns in market behavior and learn from both successes and failures.
  • New traders are advised not to disengage from charts during low-probability scenarios but instead study price action closely.

Balancing Personal Life with Trading Commitments

  • The speaker reflects on misconceptions about their character while asserting the authenticity of their trading results and student success stories.
  • They announce limited availability on social media for the week ahead, emphasizing personal commitments and family responsibilities.

Managing Expectations in Mentorship

  • Acknowledging family obligations, the speaker explains that weekend plans may affect their ability to produce content consistently.

Reflection on a Week of Engagement and Rest

Closing Thoughts on the Week

  • The speaker expresses a reluctance to engage with certain individuals, indicating a preference for more positive interactions.
  • They reflect on having had an enjoyable week filled with sharing experiences and insights, highlighting the effort put into their activities.
  • Acknowledges feeling tired and low in energy, suggesting that they will take time to rest for rejuvenation.
  • Wishes listeners a pleasant week and weekend, emphasizing the importance of safety during this time.
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.