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2022 ICT Mentorship Index Market Review - July 19, 2022
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2022 ICT Mentorship Index Market Review - July 19, 2022

Market Review and S&P 500 Analysis

Introduction to the Video

  • The speaker welcomes viewers and emphasizes the importance of watching a previous video dated July 18, 2022, for context on the current analysis.
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  • The speaker warns that without prior knowledge from the previous video, this review may seem like hindsight.

Importance of Viewer Engagement

  • The speaker requests comments from viewers who followed his live analysis on Twitter regarding today's S&P 500 performance.
  • He addresses concerns about credibility, specifically mentioning a viewer who cannot access Twitter updates and has been misinformed about his practices.
  • The speaker reassures viewers that he does not delete tweets and encourages those who have seen inaccuracies to speak up.

Daily Chart Analysis

  • A daily chart of the S&P 500 is presented; the speaker notes recent market lows were swept before a pullback occurred.
  • He discusses liquidity pools at specific highs where he expected price movement based on previous sell-side activity.

Hourly Chart Insights

  • On an hourly chart, he mentions observing no imbalance as prices dropped into a discount relative to previous highs and lows.
  • Specific levels are highlighted where he anticipated price movements towards buy-side liquidity rather than lower prices.

Market Structure Shifts

  • A shift in market structure is noted after a drop and subsequent rally; this indicates potential upward momentum.
  • The concept of "Judas swing" is introduced, explaining how it takes out equal lows before moving higher with significant energy.

Weekly Opening Gap Strategy

  • The speaker refers to using weekly opening gaps as indicators for future price movements, emphasizing logical levels over traditional supply/demand teachings.
  • He explains how markets can reprice back into old gaps while maintaining focus on algorithmic behavior rather than filling voids.

Managing Trades Effectively

  • Discussion includes managing stop losses effectively when trading with limited contracts or equity.

Market Structure and Trading Insights

Understanding Market Structure Shifts

  • The discussion begins with a focus on the 15-minute time frame, highlighting a shift in market structure as prices run into a gap and then drop down into an imbalance.
  • A potential buying opportunity is identified at 8:30 AM, with observations made about price action at 9:30 AM. Some students find the market "sloppy" due to their reliance on lower time frames like one or five minutes.
  • Emphasis is placed on using the 15-minute chart for clearer price action analysis, which helps clarify what might seem messy in shorter time frames.

Price Action Dynamics

  • The speaker explains how quick price movements can induce buyers to chase prices, leading to self-reinforcing trends until liquidity pools are reached.
  • A specific fair value gap is highlighted as crucial for morning trading; the candles' bodies respect this gap, indicating strong delivery of price action.

Algorithmic Trading Insights

  • The speaker asserts that understanding algorithmic behavior is key to successful trading, emphasizing that traders must align with these algorithms rather than rely solely on traditional supply and demand factors.
  • There’s a clear distinction made between artificial intelligence-driven market movements versus conventional trading strategies based on human psychology.

Analyzing Time Frames

  • Students are encouraged to refer back to higher time frames (like the 15-minute chart), which can help eliminate confusion seen in lower time frames during volatile periods.
  • A suggestion is made for viewers to utilize TradingView charts linked from Twitter for real-time data analysis and mapping out daily trades effectively.

Key Levels and Fair Value Gaps

  • The importance of recognizing opening gaps and extending them through weekly ranges is discussed; these levels serve as significant support or resistance points in algorithmic trading.
  • The speaker reiterates that old levels will be referenced by algorithms, providing traders with actionable insights into potential market movements.

Practical Application of Concepts

  • A model entry point based on previous teachings is presented; it highlights how displacement leads to new opportunities within fair value gaps.

Understanding Trading Strategies and Mindset

Key Insights on Trading Approaches

  • The speaker emphasizes the importance of recognizing specific trading levels, indicating a successful strategy when reaching the 50 level.
  • The speaker aims to encourage viewers by clarifying that their teachings are based on concrete strategies rather than arbitrary choices or ambiguous methods.
  • It is crucial for traders to observe price action closely, particularly focusing on where liquidity is drawn, which informs their trading decisions.
  • The speaker reflects on a recent trade where they had to adjust their approach after an initial miscalculation, highlighting the necessity of sticking to one's trading bias.
  • A key takeaway is the importance of being content with achieving enough in trading rather than constantly seeking more trades or profits.

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Channel: The Inner Circle Trader
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.