2022 ICT Mentorship Episode 18

Introduction to ICT 2022 YouTube Mentorship

The video is the 18th episode of the ICT 2022 YouTube mentorship series. The presenter discusses their trade layout and how they utilize TradingView charts for analysis.

Trade Layout and Chart Analysis

• The presenter shares their personal trade layout using TradingView charts.

• They mention that TradingView may require a membership level for certain features, but they are not promoting it or affiliated with it.

• The upper left-hand corner of the chart is dedicated to the daily chart, which is used for analyzing bias.

• The presenter explains that individual charts can be used instead of multiple screens if following their approach.

• They highlight the importance of understanding how to navigate from higher time frames to lower time frames and streamline analysis.

Using Daily Chart for Bias Analysis

The presenter explains how they start their analysis by looking at the daily chart to determine bias.

• The daily chart is where the presenter begins their analysis to establish bias.

• They demonstrate working with a maximized chart and conducting necessary analysis on it.

Demonstrating Bearish Breaker Concept

The presenter provides an example of a bearish breaker concept using a fair value gap on the chart.

• A fair value gap is shown on the chart, indicating potential lower prices.

• They explain that identifying the correct low in relation to the fair value gap is crucial for accurate analysis.

• The presenter mentions sharing this information with their private group beforehand as proof of their prediction accuracy.

No Perfect Method in Trading

The presenter addresses a question about finding a specific approach or style that guarantees successful trades.

• There is no trading method that guarantees success every time.

• The presenter emphasizes that trading, like any other endeavor, is imperfect and involves the responsibility of the trader.

• They mention lecturing on this topic in their private group and acknowledge that it may not be pleasant to hear but is necessary for growth.

Creating a Step-by-Step Approach

The presenter explains why they created a step-by-step approach to trading and offers to demonstrate it.

• The presenter has developed a model for trading that provides a systematic approach.

• They offer to show viewers how to apply this model in the charts and provide examples of what to look for.

• Backtesting and analyzing historical data are also mentioned as part of the demonstration.

Proving Prognostication with Model

The presenter discusses how their model can prove accurate predictions in trading.

• The presenter mentions making accurate predictions about price movements using their model.

• They clarify that the purpose is not to make big trades but rather demonstrate the effectiveness of their approach.

• The presenter anticipates potential skepticism from viewers but assures them they are ready to provide evidence if needed.

Conclusion: Easiest Approach in Mentorship

The presenter concludes by emphasizing the simplicity and effectiveness of their mentorship approach.

• The presented model is considered the easiest approach within the ICT 2022 YouTube mentorship program.

• It provides a step-by-step process for analyzing charts and making informed trading decisions.

Working with Intraday and Daily Order Flow

The speaker emphasizes the simplicity of working with intraday and daily order flow. They explain that it doesn't require complex tools or gadgets, but rather a streamlined approach. The focus is on maintaining simplicity and finding profitability without needing the market to reach extreme levels.

Streamlining the Process

• The speaker wants to keep things simple and streamlined, even when teaching their daughter about trading.

• They explain that having a step-by-step process is important in order to maintain a clear bias in analysis.

• Profitability can be found without waiting for the market to reach extreme levels.

Implementing a Bearish Bias

• When analyzing charts for setups, it's important to have a bearish bias if that's what the analysis suggests.

• This applies specifically to forex trading, but there may be caveats when transitioning to index futures trading.

• Starting analysis on a daily chart helps establish the bias.

Taking Advantage of Time of Day

• Greed can lead traders to try and capture every possible movement, but it's not necessary.

• Time of day plays a role in determining what movements are worth pursuing.

• Being forgiving with entries allows for more flexibility.

Understanding Live Account Statements

• The speaker mentions live account statements shown in previous videos as examples.

• These statements were created based on questions from students who paid for access to live account demonstrations.

• Not all conversations related to those statements are shared publicly.

Committing to One Direction

• Changing directions frequently leads to confusion and potential losses.

• It's important to commit to one direction based on bias unless proven clearly wrong.

• Filtering out trades that go against the established bias helps maintain consistency.

No Secret Formula for Eliminating Losses

• There is no secret formula or method that guarantees zero losses in trading.

• If such a method existed, the speaker would not have become a teacher and would be solely focused on personal trading success.

Having a Clear Bias and Employing Trade Ideas

The speaker emphasizes the importance of having a clear bias in trading and employing trade ideas based on that bias. They explain that biases are not always perfect, but they provide a framework for filtering out trades that go against the established direction.

Working with Biases

• Biases serve as an idea to work within when analyzing the market.

• It's important to employ short sale ideas when bearish and long trade ideas when bullish.

• Filtering out trades that contradict the established bias helps maintain consistency.

Waiting for Setups with Bias in Mind

• Traders should wait for setups to form while keeping their bias in mind.

• New traders often seek foolproof methods, but there is no secret formula to eliminate losses.

• The speaker encourages understanding the principles being taught rather than seeking shortcuts.

Live Account Demonstrations

• Live account demonstrations shown in previous videos were created based on specific questions from students.

• These demonstrations aim to simulate real market situations and address various scenarios raised by students.

• Some executions shown are meant to demonstrate overcoming initial fear or anxiety associated with taking trades.

Understanding Contextual Relevance

• The speaker acknowledges that some aspects of their trading community may not be relevant or accessible to all viewers.

• Live account demonstrations are intended for those who have paid for access and engaged in private conversations about specific trading situations.

Avoiding Frequent Direction Changes

• Frequent changes in direction can lead to confusion and potential losses.

• Committing to one direction based on bias helps avoid unnecessary back-and-forth movements.

• Controlling oneself is crucial to prevent blowing up an account.

New Section

In this section, the speaker discusses the possibility of doubling an account even with a low win rate and emphasizes that a risk-to-reward model is not essential for profitability.

Doubling an Account with a Low Win Rate

• The speaker mentions that it is possible to double an account even with a low win rate.

• They highlight that they have proven this with their own live trading account.

• The speaker plans to show examples from their TD Ameritrade account in future lessons.

• They clarify that they are not obligated to show everything but will demonstrate enough to showcase the growth of the account.

New Section

In this section, the speaker discusses funded account programs and shares their opinion on whether everyone should consider participating in them.

Funded Account Programs

• The speaker acknowledges the existence of various funded account programs.

• They mention having students who have gone through these programs and successfully received funding.

• However, they express that not everyone needs to pursue such programs and it depends on individual preferences and circumstances.

New Section

In this section, the speaker explains their approach to trading using a specific model based on daily bias and price action analysis.

Trading Approach: Daily Bias and Price Action Analysis

• The speaker describes their trading model based on daily bias and price action analysis.

• They analyze recent price action on the daily chart to identify potential trade setups.

• By observing fair value gaps and retracements, they determine areas of interest for trading opportunities.

• The speaker highlights the importance of framing daily highs and lows as targets for intraday trading.

• They emphasize using previous day's highs and lows as reference points for identifying liquidity pools.

New Section

In this section, the speaker explains how to identify trade targets based on daily highs and lows.

Identifying Trade Targets

• The speaker reiterates the bearish bias and the likelihood of a drawdown to a specific low.

• They emphasize using previous day's highs and lows as reference points for trade targets.

• By analyzing price action, they demonstrate how to identify potential trade setups within the framework of daily highs and lows.

• The speaker mentions that highlighting previous day's highs and lows provides numerous setup opportunities.

The transcript provided does not contain timestamps beyond 1131s.

New Section

This section discusses the premium and discount levels represented in Wednesday's trading. The chart shows a range of potential profitability from 935 to a low of 74, offering an opportunity for traders. It emphasizes the importance of using a computer screen for trading rather than relying on a phone.

Premium and Discount Levels

• Premium and discount levels are represented on the high and low of Wednesday's trading.

• The chart shows a potential range of profitability from 935 to a low of 74.

• Traders can target this range for potential gains.

Importance of Using a Computer Screen

• Trading on a phone is not recommended for entering new positions due to limited data visibility.

• A computer screen provides more real estate and allows traders to see the bigger picture.

• Consistently profitable traders typically use computer screens rather than phones.

New Section

This section explains how to take advantage of the fair value gap as an opportunity for short trades. It highlights the importance of analyzing price movements and targeting specific lows for potential profits.

Fair Value Gap Opportunity

• When entering the fair value gap, it presents an opportunity to look for short trades.

• Targeting specific lows can lead to potential profits.

• The range from 935 to a low point offers respectable profit potential.

New Section

This section emphasizes the importance of using multiple time frames in trading analysis. It advises against trading solely on mobile devices and recommends having access to sufficient data by using computer screens.

Importance of Multiple Time Frames

• Analyzing multiple time frames provides valuable information for managing positions and identifying trade setups.

• Using platforms like TradingView allows easy synchronization across different time frames.

Trading on Mobile Devices

• While managing trades on mobile devices is possible, entering new positions on phones is not recommended.

• Mobile screens lack sufficient data visibility and hinder the ability to see the overall market landscape.

• Consistently profitable traders typically use computer screens for trading.

New Section

This section discusses the layout of charts across different time frames. It explains how annotations made on one chart can be transposed onto other time frames, allowing for consistent analysis and reference throughout the day.

Chart Layout Across Time Frames

• Annotations made on the daily chart can be transposed onto the hourly and 15-minute charts.

• Using a single screen setup, traders can easily switch between different time frames for analysis.

• The 15-minute chart serves as a bellwether chart for quick reference throughout the day.

New Section

This section highlights the significance of referencing the 15-minute time frame in intraday trading. It explains how information from this time frame influences trade management, bias assessment, and trade setups.

Importance of Referencing the 15-Minute Time Frame

• The 15-minute time frame provides influential information for managing trades and identifying trade setups.

• Regularly checking this time frame helps build trust in intraday bias.

New Section

This section explains how to annotate charts when using a single-screen setup. It demonstrates how annotations made on one chart can be easily transferred to other charts by switching between different time frames.

Annotating Charts with Single-Screen Setup

• Annotations made on one chart (e.g., daily) can be transferred to other charts (e.g., hourly or 15-minute).

• Switching between different time frames allows annotations to appear consistently across all charts.

New Section

This section focuses on identifying relative equal highs in the hourly chart. It demonstrates how to annotate charts for backtesting and study purposes.

Identifying Relative Equal Highs

• Relative equal highs can be identified by anchoring them to a specific point on the chart.

• Annotations can be used for backtesting and study journal purposes.

New Section

This section explains how to toggle annotations to appear on the top left of the chart. It emphasizes the flexibility of choosing different colors for annotations.

Toggling Annotations and Color Choices

• Annotations can be toggled to appear on the top left of the chart for better visibility.

• Traders have the flexibility to choose their preferred color for annotations.

New Section

This section discusses how imbalances in daily and hourly charts can be observed through annotations. It highlights the importance of anchoring levels accurately and provides insights into backtesting and analyzing price movements.

Observing Imbalances in Daily and Hourly Charts

• Imbalances in daily charts can also exist in hourly charts, indicating potential trading opportunities.

• Accurate anchoring of levels is crucial for effective analysis.

• Annotations help with backtesting strategies and understanding price movements.

Liquidity Pull on the Hourly Chart

The speaker discusses a liquidity pull on the hourly chart and highlights the importance of mapping out the low from April 6th. They explain how to determine the opening price at midnight in New York local time.

Mapping Out the Low and Opening Price

• The low from April 6th is identified as a key reference point.

• The opening price at midnight in New York local time is important for analysis.

• On the 15-minute timeframe, annotations are used to mark daily dividers and favorite tools.

Linking Charts and Setting Timeframes

• By clicking the link button, all charts with the same symbol will have annotations plotted across different timeframes.

• This feature helps streamline analysis and makes it easier to find specific patterns or levels.

• It is recommended to set your TradingView chart to New York local time for consistency.

Identifying Key Levels and Imbalances

• A line segment is drawn to represent the opening price at midnight.

• Relative equal highs are observed, followed by a breakdown below a swing low.

• An imbalance or fair value gap is identified within this range.

Buy/Sell Equity Pull and Daily Denomination

The speaker discusses buy/sell equity pull and introduces the concept of daily denomination based on midnight in New York local time.

Buy/Sell Equity Pull

• A line segment is plotted to represent a small indecisive candle that indicates buy/sell equity pull.

• The difference between open and close prices may be minimal but still relevant for analysis.

Daily Denomination at Midnight

• The opening price at midnight in New York local time serves as an anchor for analysis.

• Reference points can be placed on different timeframes depending on trading strategies (e.g., 15-minute or 5-minute charts).

Identifying Imbalances and Fair Value Gaps

The speaker explains the concept of fair value gaps and how to identify them on the chart.

Identifying Fair Value Gaps

• Within a specific range, a fair value gap is observed.

• The speaker highlights this area using annotations.

• The importance of paying attention to details and following along with the video is emphasized.

Trading the New York Session in Forex

The speaker discusses trading during the New York session in forex and introduces the concept of killzone windows for setting up trades.

Trading During the New York Session

• In forex, the New York session typically occurs from 7:00 AM to 10:00 AM local time.

• Setups formed within this time frame are considered for trading opportunities.

Killzone Windows

• Annotations can be used to mark killzone windows on the chart.

• These windows indicate potential trade setups during the specified time frame.

New Section

The speaker discusses the New York kill zone and how to identify a displacement to the downside. They explain placing a limit order to sell short and setting a stop loss above the high.

Identifying Displacement and Placing Orders

• The speaker suggests making the inside center black and placing an order at that point .

• A limit order can be placed to sell short at that price or plus one pip, with the stop loss set above the high .

New Section

The speaker explains how to split the 15-minute timeframe into five-minute intervals for a more detailed analysis. They discuss looking for advantageous opportunities within a specific range on the five-minute chart.

Analyzing Five-Minute Chart

• The speaker suggests analyzing the range within the shaded area on the five-minute chart .

• They mention looking for fair value gaps within this range to determine if it is advantageous to go down into a five-minute chart .

New Section

The speaker clarifies that higher timeframe imbalances are more significant than smaller timeframe imbalances. They emphasize considering both higher and lower timeframe perspectives for fine-tuned entries.

Importance of Higher Timeframe Imbalances

• Higher timeframe imbalances are considered more significant than smaller timeframe imbalances .

• While focusing on low threshold entries, it is essential to consider both higher and lower timeframes for better entry points .

New Section

The speaker discusses finding better entries by building additional perspectives. They explain how leverage can impact risk management in trading.

Finding Better Entries and Risk Management

• The speaker suggests looking for imbalances on the five-minute chart within a specific range .

• They mention that leverage can be counterproductive if not managed properly, emphasizing the importance of risk management .

New Section

The speaker explains how to identify potential entry points based on order blocks and candlestick patterns. They address common misconceptions about order blocks.

Identifying Entry Points with Order Blocks

• The speaker demonstrates potential entry points based on order blocks and candlestick patterns .

• They clarify misconceptions about order blocks and address comments from viewers regarding their understanding of them .

Clarifying Order Blocks

The speaker addresses misconceptions about order blocks and emphasizes the importance of teaching accurate information to avoid misleading viewers.

Misconceptions about Order Blocks

• Many people talk about order blocks, but not all of them have a correct understanding.

• It is important to correct misconceptions because inaccurate information can harm viewers and lead to incorrect trading decisions.

• Proper education on order blocks is necessary for effective implementation in real-time trading.

Understanding Bearish Order Blocks

The speaker explains the concept of bearish order blocks and highlights the key elements that make an order block valid.

Characteristics of Bearish Order Blocks

• A bearish order block occurs when there is a consecutive run on the five-minute chart without reaching the last up closed candle.

• An imbalance is essential for an order block to be valid; without it, there is no true supply and demand relationship.

• Fresh zones are not required for identifying order blocks; other factors such as imbalances can be used effectively.

• Learning order blocks correctly leads to consistent results and longevity in trading.

Ideal Scenario for Trading Order Blocks

The speaker discusses the ideal scenario for trading order blocks and provides insights on setting limit orders.

Ideal Scenario for Trading Order Blocks

• In the ideal scenario, three consecutive candles form an order block, with the last candle being traded up to before a downward move.

• However, if there is a higher timeframe parent imbalance that stops at a certain level, it may not be necessary for the price to reach the last candle of the three-candle sequence.

• Setting limit orders at strategic points helps avoid missing trades and allows for consistent operation in trading.

Consistency and Backtesting in Trading

The speaker emphasizes the importance of consistency in trading and provides insights on backtesting strategies.

Consistency and Backtesting

• Following the correct approach to order blocks leads to consistency and desired results.

• Overzealous price points may lead to missed trades, so it is important to set realistic limit orders.

• The speaker aims to provide a trading strategy that allows for consistent operation, multiple setups, and opportunities for practice and backtesting.

• The concepts discussed in this mentorship program are not widely known or taught by others.

Market Structure Analysis

The speaker analyzes market structure, including internal shifts and bearish order blocks, while debunking misconceptions about closed candles.

Market Structure Analysis

• An internal shift in market structure indicates a bearish trend.

• Bearish order blocks can be refined down to the five-minute chart, considering the lowest down closed candle as a key element.

• It is unnecessary to focus on the last closed candle before a downward move; instead, attention should be given to other factors such as imbalances.

• Understanding fair value gaps helps determine potential trade opportunities.

Timestamps have been associated with relevant sections of the transcript.

New Section

In this section, the speaker discusses the challenges of trading with very tight stop losses and emphasizes the importance of not getting too used to it. They also highlight the benefits of having a larger stop loss and not being chained to constantly monitoring the charts.

Trading with Ultra Short Stop Losses

• Some traders attempt to trade with extremely tight stop losses, such as one pip or half a pip.

• The speaker warns that while it may work occasionally, consistently making profits with such small stop losses is unlikely.

• When traders start reducing their position sizes to accommodate these tight stops, they will struggle to achieve consistent success.

Benefits of Larger Stop Losses

• Having a larger stop loss allows traders to step away from the charts without constantly worrying about being stopped out.

• With a small ultra short stop loss, even skilled traders tend to feel anxious and expect to be stopped out frequently.

• Instead of focusing on getting stopped out, it is more important to analyze where the market is likely heading.

New Section

In this section, the speaker explains how they identify key levels in the market and why they prioritize certain price movements over others.

Identifying Key Levels

• The speaker identifies a specific level (the low of April 6th) as an important reference point for their analysis.

• They mention that although the market has already moved lower than that level, it still holds significance for their trading strategy.

Prioritizing Price Movements

• The speaker mentions that they are not concerned about what happens during the London session because it did not provide them with an initial rally higher into their target area.

• Instead, they focus on when and how the market reaches their desired level before considering taking any trades.

New Section

In this section, the speaker discusses the concept of order blocks and how they determine the right order block to trade.

Understanding Order Blocks

• An order block refers to a change in the state of delivery in the market.

• The algorithm shifts its state of delivery when the market breaks below a certain candle's open and continues to break swing lows.

• Any rally after this shift is seen as setting up another move lower.

Selecting the Right Order Block

• The speaker emphasizes that they have already provided all the necessary information about selecting the right order block in their previous teachings.

• They highlight that an order block should be considered suspect if it is followed by an intermediate term high swing high with an imbalance.

• Traders can place their stop loss at this swing high level based on these rules.

New Section

In this section, the speaker explains how traders can negate certain order blocks and shares insights on entering trades during specific time windows.

Negating Order Blocks

• The speaker mentions that some traders may try to teach his concepts without fully understanding them, leading to incorrect interpretations of certain order blocks.

• By following their framework and logic, traders can learn how to negate certain expected order blocks that others might suggest.

Entering Trades at Specific Times

• The speaker introduces the concept of "kill zones," which are specific time windows for determining entry points and placing orders.

• Traders should consider their entry ideas and placements within these kill zones but do not necessarily need to have their orders filled during this window.

• If no suitable entry placement can be derived within the kill zone, it is better to wait for another trading opportunity or day.

New Section

In this section, the speaker provides an example trade setup using their framework and logic.

Example Trade Setup

• The speaker presents a trade setup where traders can enter as sellers at a specific level.

• They advise placing a limit order and walking away from it, allowing the market to fill the order naturally.

• If the order is not filled by a certain time, it is recommended to cancel it and wait for another opportunity.

New Section

In this section, the speaker concludes the example trade setup and emphasizes the effectiveness of their approach.

Conclusion of Example Trade Setup

• The speaker mentions that the trade setup resulted in a 40-pip profit, even though it did not capture the very highest high.

• They highlight that structuring trades based on their framework and logic can lead to successful outcomes.

• The speaker asserts that their teachings are evident in how markets behave and urges viewers not to argue against them.

New Section

In this section, the speaker discusses the importance of analyzing price action and shares insights on how to apply the lessons learned in different markets.

Analyzing Price Action

• The speaker emphasizes the significance of studying price action and being passionate about it.

• The techniques taught in this lesson are typically reserved for more experienced traders but can be applied to various markets, including forex, bonds, and gold.

• Gold is highlighted as an event-driven market that often requires geopolitical factors or other significant events to drive movement. It may not be ideal for aggressive short-term trading due to manipulation and stop hunts.

• While acknowledging experienced traders in the audience, the speaker aims to cater to new viewers by presenting information in a palatable manner.

• The speaker encourages viewers to recognize patterns and repetitions in price action and consider how they can utilize this information.

New Section

This section focuses on the importance of studying past price action and developing a personalized approach to note-taking.

Studying Price Action

• The speaker emphasizes the value of studying intraday price action alongside weekly charts to gain a comprehensive understanding of market movements.

• Annotating charts with observations helps create a study journal that can be reviewed at the end of each week.

• By examining daily and weekly charts, traders can identify key levels, high/low points, significant days, and overall market frameworks.

• Trade setups should not solely rely on indicators or external signals; instead, focus on understanding price itself.

• Developing a personal style of note-taking is encouraged. Each trader should find their own way of recording observations without feeling obligated to follow specific examples provided by others.

New Section

This section highlights the benefits of consistent practice and notes how individual teaching styles can influence traders' language and approach.

Consistent Practice and Personal Style

• Consistent daily practice is emphasized as a means to improve trading skills.

• Traders are encouraged to apply the techniques taught in the video regularly.

• The speaker notes that individual teaching styles can leave an imprint on traders, influencing their language and expressions.

• An empty space on charts is mentioned, which can be used for personal observations or further investigation of specific aspects not covered in the video.

• Reviewing weekly performance, including pip movement and risk assessment, helps build trust in one's trading model through backtesting and real-life examples.

New Section

The speaker discusses the importance of recognizing repeating patterns in price action and how it can be challenging for beginners to identify them.

Recognizing Repeating Patterns

• The speaker uses the analogy of bear footprints in the snow to explain that while not identical, there are similarities in the repeating patterns of price action.

• These repeating patterns are not indistinguishable from each other, but they still exhibit recognizable characteristics.

• Beginners may struggle to identify these patterns initially, even if they have watched instructional videos. It takes time and practice to develop this skill.

• Keeping a study journal and annotating price action examples is crucial for learning and improving technical analysis skills.

• By creating a study journal with thousands of examples over time, traders can become proficient technical analysts.

New Section

The speaker emphasizes the value of creating a personal study journal rather than relying on books for trading education.

Creating a Study Journal

• The speaker discourages buying trading books as most of them offer repetitive information and flawed logic.

• Instead, traders should focus on creating their own study journal with real-life examples from their trading experiences.

• Over time, having a study journal with thousands of examples will enhance one's technical analysis skills significantly.

New Section

The speaker highlights the effectiveness of his model in identifying multiple trading opportunities within a specific timeframe.

Model Effectiveness

• There are several trading opportunities within the presented timeframe and fractal.

• The speaker acknowledges that discussing each individual trade opportunity would be overwhelming and may lead to missing important points covered in the lecture.

• The model demonstrated is applicable to Forex trading and not limited to futures.

New Section

The speaker summarizes the key concepts covered in the lecture, including order blocks, fair value gap, and how to analyze them.

Key Concepts Covered

• The speaker provides an overview of order blocks and how they are determined based on the fair value gap.

• Differentiating between various parts of an order block is discussed, along with techniques for invalidating certain aspects.

• Analyzing candlestick patterns within an order block is explained, focusing on potential movements in the upper half or lower half of the block.

• The speaker concludes by expressing hope that the lecture has provided valuable insights into these concepts.