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2022 ICT Mentorship Episode 40
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2022 ICT Mentorship Episode 40

Introduction

In this section, the speaker introduces the direction of the channel and explains why he stopped making videos for his private group.

  • The mentorship teachings for this model are wrapping up.
  • Reviews and index futures forex commodities will be covered.
  • The speaker stopped making videos for his private group to prevent people from profiting off of pirated videos.
  • He now makes videos publicly to help steer people away from buying old videos that won't be useful.

Motivation Behind Public Videos

In this section, the speaker explains why he started making public videos and how it helps prevent piracy.

  • Some students are upset that he no longer makes private videos, but others understand why he's doing it.
  • The speaker believes those who have an issue with it may be trying to sell pirated videos.
  • He wants to prevent people from buying old videos that won't be helpful because they weren't there when it was given at the time it was mentored.

Working in Forex

In this section, the speaker talks about working in forex and outlines a trading idea using daily bias.

  • There was a high impact news driver for Canadian dollar on the economic calendar.
  • Many viewers are interested in forex since that's what the speaker is known for.
  • The speaker moved away from forex recently but still engages in stock index futures market.
  • He covers Canadian dollar and outlines a swing high trading idea using daily bias.

Digging into the Range of a Down Closed Candle

In this section, the speaker discusses how a down closed candle could be met with some resistance and how it is digging into its range. The speaker also talks about an order block that could impede a sudden big candle.

Resistance and Order Block

  • A down closed candle could be met with some resistance.
  • The down closed candle is digging into its range.
  • An order block could impede a sudden big candle.

Economic Calendar Manipulation

In this section, the speaker discusses how economic calendar manipulation affects market movements. The speaker also talks about waiting for news to hit the market before creating setups.

Economic Calendar Manipulation

  • Market movements are affected by economic calendar manipulation.
  • Waiting for news to hit the market before creating setups is more conservative.

Finding Setups and Trusting Them

In this section, the speaker talks about finding setups and trusting them. The speaker also advises using demo accounts to see moves in real-time.

Finding Setups and Trusting Them

  • It takes experience to find setups and trust them.
  • Using demo accounts to see moves in real-time is advised.

Fair Value Gaps

In this section, the speaker discusses fair value gaps and how they create areas of buy side or sell side.

Fair Value Gaps

  • Fair value gaps create areas of buy side or sell side.

Understanding Forex Trading

In this section, the speaker discusses how to identify sell and buy sides on 5 and 15-minute charts.

Identifying Sell and Buy Sides

  • The speaker posted a tweet at 8:29 AM on June 21, 2022, stating that the dollar CAD is about to have some volatility.
  • The speaker explains that traders need to study whether the market wants to run sell side before buy side or rebounds to a discount.
  • The speaker mentions that between the high and low points of a chart is equilibrium, and traders need to find a discount array below that if they're going short.
  • The speaker advises taking partials because it's uncertain whether the market will come all the way back up.

Utilizing Fair Value Gap in Forex Trading

In this section, the speaker discusses how to use fair value gap in forex trading.

Using Fair Value Gap

  • The speaker recommends waiting for displacement short term low before using fair value gap in forex trading.
  • Traders should look for an imbalance between two candles as it indicates an opportunity for rebalancing.
  • Traders must define their risk with stop loss based on where they are going short between two candles' lows and highs.
  • Forex trading is scalable compared to futures trading.

Shorting in Forex Trading

In this section, the speaker discusses how to short in forex trading.

Shorting in Forex Trading

  • The speaker advises traders to look for a short between the high and low points of a chart.
  • Traders should define their entry point better, even if it goes above it a little bit.
  • Traders should watch the bodies of the candle support that premium high of the imbalance and take partials when trades into the fair value gap here.

The transcript is relatively short, so there are only three sections with bullet points.

Setting Stop Loss Based on Model's Rules

In this section, the speaker discusses setting stop loss based on the model's rules taught in the 2022 YouTube mentorship.

Stop Loss Placement

  • The closer you get to a reasonable and acceptable level, the higher the chance of not being filled.
  • Utilize a specific level for stop loss placement based on the model's rules.

Analyzing a Four Minute Chart

In this section, the speaker analyzes a four-minute chart and discusses its details.

Chart Analysis

  • The chart shows south side quality pool relative equal lows from the morning.
  • It rallies up and creates a high after running buy-side liquidity.
  • It breaks down, consolidates, and gives a short-term swing low with an energetic run lower at high impact news event at 8:30.
  • Rebalance stop goes here and it rolls over.

London Close Profit Taking Hour

In this section, the speaker talks about directional plays during London close profit taking hour.

Trading During London Close Profit Taking Hour

  • Between 10 o'clock and 11 o'clock in the morning is London close profit taking hour.
  • About 80% of your trade should be off between these hours if you're looking for directional plays while in trade.
  • Usually, but not always, opposing ends of daily range form during this time window.
  • Algorithmic trading influences this time window.

Daily Bias Simplification

In this section, the speaker simplifies daily bias by providing some rules to follow when finding daily bias.

Finding Daily Bias

  • Everyday bias is unrealistic as having predetermined daily bias before market starts trading invariably leads to incorrect predictions.
  • Follow these rules to find daily bias:
  • Look for the previous day's high and low.
  • Determine if the current price is above or below yesterday's range.
  • If it is above, look for long opportunities. If it is below, look for short opportunities.
  • Daily bias requires experience and doing it yourself.

E-mini S&P Futures Contract Analysis

In this section, the speaker discusses the E-mini S&P futures contract analysis.

September Contract for 2022

  • The symbol to utilize on TradingView for calling up data for this contract is ESU 2022.
  • This chart shows a daily chart.

Daily Bias

  • Daily bias cannot be simplified into a cookie-cutter approach that always works.
  • Following specific predetermined daily bias before market starts trading invariably leads to incorrect predictions.
  • Follow certain rules to find daily bias as discussed in the previous section.

Weekly Expansion

In this section, the speaker discusses how to determine the likely weekly expansion using a weekly chart.

Using Weekly Chart

  • Utilize a weekly chart to study the market.
  • Determine if it's likely to run to an old low or high or if there is an imbalance below or above the market price.
  • If other markets have high impact or medium impact news that would be more interesting, then those pairs or markets will be prioritized by the algorithm.

Direction of Expansion Move

  • Look for the direction of an expansion move.
  • Determine if it's likely to expand higher or lower during the week.
  • Identify obvious liquidity in that direction below old lows above old highs or identifying imbalances and price delivery top down.

Daily Chart Analysis

In this section, the speaker discusses how to determine where daily charts are going using a similar approach as with weekly charts.

Determining Direction

  • Use daily charts to determine where they are going.
  • Focus on determining where is it most likely to have the majority of volume pushing through.
  • Identify who's in the crosshairs and whether people have been making money going long.

Volume and Interest

  • When referring to volume, it means interest, chaos, energy, all activity and action in Forex trading.
  • Determine whether volume is on higher side reaching for buy side or lower side reaching for sell side.

Economic Calendar Events

In this section, the speaker discusses how economic calendar events can affect trading decisions.

High/Medium Impact News Events

  • Focus on days that have high or medium impact calendar events only.
  • Look at next month's economic calendar to determine where the high impact or medium impact news events for the markets that you trade are.
  • Determine what day of the week and what time the news driver is coming out.

News Drivers

  • If there is a news driver coming out on a particular day, it can affect trading decisions.
  • On medium/high impact news events, look for something that is going to run up higher into a fair value gap or run above a short term high.

Trading Bias and Strategy

In this section, the speaker discusses his trading bias and strategy. He focuses on specific days where everything is coming together, rather than trading every day. He looks for higher time frames to expand in a specific direction to start his bias.

Focusing on Sweet Spots

  • The speaker only focuses on sweet spots or low hanging fruit days.
  • These are days where everything is coming together, and all the stars are lining up.
  • The higher time frame weekly chart expanding in a specific direction starts his bias.

Using Economic Calendar

  • The speaker uses the economic calendar to look for when a move might occur.
  • If there is a move that happens before an economic calendar event occurs, it's a missed opportunity.
  • Sometimes you need to use another pair or something else to trade with.

Avoiding Overtrading

  • The speaker advises against being an everyday trader who tries to do something every single day.
  • There are times when you should not be trading at all.
  • Overtrading can lead to losing trades and blowing accounts.

Learning from Mistakes

In this section, the speaker talks about how he learned from his mistakes as a young trader. He emphasizes the importance of knowing how not to destroy oneself while trading.

Blowing Accounts as a Young Trader

  • When the speaker was 20 years old, he thought he could trade every single day.
  • This approach led him to blow accounts due to lack of self-control and not knowing how to trade.

Importance of Knowing How Not To Destroy Oneself

  • The speaker has made a career out of knowing how not to destroy himself.
  • He advises against trying to be an Olympic trader because trading is not an Olympic sport.
  • Overtrading can lead to blowing accounts, and the speaker aims to prevent others from enduring this.

Planning Trades

In this section, the speaker discusses how to plan trades using the economic calendar and time of day. He emphasizes the importance of journaling and noticing patterns over time.

Looking for Economic Calendar Events

  • The speaker looks for economic calendar events and notes when they occur.
  • The best setups occur when these calendar events are in play and originate around that same time.
  • Journaling helps notice patterns over time.

Planning Trades with Model

  • The speaker uses a model where he looks for the economic calendar, time of day, and kill zone in the market expecting an expansion high or low on that weekly chart.
  • This approach allows him to plan his trades and trade his plan.

Ignoring Both Side Type Movement

In this section, the speaker talks about ignoring both side type movement in price action. He focuses on swings in the market rather than manipulation.

Ignoring Both Side Type Movement

  • When there is both side type movement in price action, it's usually due to FOMC or some kind of rate announcement event.
  • The speaker ignores this wick and all other similar movements as they are manipulation.
  • Focus on swings in the market rather than manipulation.

Understanding Fair Value Gap

In this section, the speaker explains how to identify fair value gaps and use them to make trading decisions.

Identifying Fair Value Gaps

  • Look at the bodies of the candles to identify a fair value gap.
  • The market will want to revisit that area if it's an imbalance sell side only.
  • A premium market is above the 50 level and consolidating.

Trading Opportunities

  • The market drops down into the fair value gap creating optimal trade entry.
  • You can be a buyer ahead of the 9:30 opening if there is a bull shoulder block.
  • Trusting that low is probably pricing in the daily low.

Market Structure Shift

In this section, the speaker discusses how energetic price runs create short-term shifts in market structure.

Short-Term Shift in Market Structure

  • Energetic price runs from London open create short-term shifts in market structure.
  • Most of the time, London creates higher lows when directional bias is correct.
  • Once fair value gaps are being closed, and the market goes higher, it signals bullishness.

Candlestick Analysis for Trading Decisions

In this section, the speaker emphasizes using candlestick analysis for making trading decisions instead of relying on indicators or moving averages.

Candlestick Analysis for Trading Decisions

  • Candlesticks tell you everything you need to know about trading decisions.
  • No need for indicators or moving averages; everything is shown here in price action relative to time and price.
  • There's an hierarchy of how markets trade down into a higher timeframe to a lower timeframe all being supported by down closed candles within the bullish bias.
  • The market starts with a run from this low with a lower low, creating short-term discounts relative to the low to high here discount rallies.

Understanding Fair Value Gap Trading

In this section, the speaker explains how to trade using the fair value gap and order blocks. He also discusses how to identify market biases and use them to make trading decisions.

Fair Value Gap Trading

  • Fair value gap is a useful tool for identifying trading opportunities on a smaller time frame.
  • Order blocks are areas where there is significant liquidity, making them ideal for entering trades.
  • Buying at the bottom of a fair value gap can be profitable as there is buy-side liquidity resting up ahead.
  • The market drops into a discount prior to running up, creating an opportunity for traders to enter at lower prices.
  • A stop running event creates a lower low sell side taken reaction off the order block, indicating that it's not likely to take that low out again.
  • If you're looking back from above, you'll see that the fair value gap has already rebalanced itself, so there's no reason for it to go down again.

Market Biases

  • Understanding market biases can help traders make better trading decisions.
  • Dollar CAD had high impact news event which makes it easier to determine what the bias is for the morning session.
  • Lower dollar CAD means higher foreign currency and when the dollar goes down it's easy for spoos or e-mini s p stock index features to go higher.

Short-term High Shift in Market Structure

  • After stop hunt retracement to a discount, fair value got buying here run to initial target buys liquidity relative equal highs here it runs that you can't see it here remember we're dropping down this is a three minute chart now it rallies up creates a fair value gap.
  • Lower dollar CAD means higher S&P, so as a forex trader you could be selling short if you're not an S&P trader or if you're not trading forex like me.

Trading Strategies for Inter-Market Relationships

In this section, the speaker discusses how to use inter-market relationships to develop trading strategies.

Scaling off on Higher Time Frame Charts

  • As you move up to higher time frame charts, scale off your approach or plan accordingly.
  • Hold something for the rest of the day towards the close or at least try to see if you get a continuation into the afternoon session.

Using Other Markets for Bias

  • Use other markets for inter-market relationships and bias.
  • Focus on risk-on/risk-off dynamics between assets like forex, index futures, and stocks.

Synergy Between Dollar CAD and S&P Market

  • There was a synergy between Dollar CAD and S&P market movements even though they are not correlated.
  • The focus was primarily on Dollar CAD due to its high impact news drivers for that day.

Understanding Risk-On/Risk-Off Dynamics

  • Foreign currencies index futures stocks go higher when it's risk-on; dollar goes down.
  • When it's risk-off, dollar is higher and everything else goes down.

Comparing Forex Pairs

  • Euro/dollar would be a better trade than pound/dollar if there is an inability for one of them to make a lower low.
  • If Australian dollar and Kiwi dollar in New Zealand dollar fail to make a lower low intraday when it's risk-on, buy the risk-on higher low currency.

Choosing Which Pair to Trade

  • Start with the economic calendar but sometimes use another market instead based on correlation signals.
  • Look for SMAs divergences to signal which pair is better.

Conclusion

The speaker will be back on Thursday for a discussion on money management. Until then, continuously do market reviews on the YouTube channel Monday through Friday.

Playlists: 2022 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.