ICT Precision Trading Concepts - 2

Introduction to Weekly Order Blocks

In this section, the speaker introduces the concept of weekly order blocks and how they can be used to understand long-term order flow on a weekly chart. The speaker also mentions that this is part two of a three-part series.

Understanding Weekly Order Blocks

• The speaker discusses how he has received positive feedback about utilizing ICT order blocks on daily, four-hour, and one-hour charts.

• The speaker advises viewers to study their chosen markets on a monthly basis but will focus on weekly charts for this teaching module.

• The speaker acknowledges that there is no tool or concept that can give direction accurately 100% of the time.

• Volume three will discuss a concept that will help in determining direction if it's something viewers are struggling with.

Identifying Weekly Order Blocks

In this section, the speaker explains what weekly order blocks are and how to identify them on a chart. He uses an example chart to illustrate his points.

Identifying Reaction Levels

• To identify weekly order blocks, look for areas where price moved away from aggressively and spent very little time before returning back in the form of an order block.

• The example chart shows market structure alone indicating a long-term or intermediate-term low in place with higher short-term lows on either side and higher swing lows as well.

• A solid swing low forms with a confirming candlestick (a hammer), creating an order block at approximately 85.42 on the euro/USD fiber pair.

• Any long taken at the order block would have had potential range of approximately 800 pips.

Advantages of Weekly Order Blocks

• The speaker illustrates the advantages of weekly order blocks by showing how price rallied out of the order block and created another order block.

• The speaker prefers order blocks associated with candles that have more body to delineate them from candles with long wicks.

Understanding Order Blocks

In this section, the speaker explains how order blocks are formed and how to anticipate them.

Anticipating Order Blocks

• Order blocks form where price came down and rallies off aggressively before dropping back down into the order block.

• Two old highs are used to be conservative in terms of showing what to anticipate or expect.

• The speaker frames his analysis upon an order block but did not share it earlier due to overwhelming feedback.

Confluence of Supporting Factors

• When utilizing the weekly timeframe, it's important to note that we're not simply buying when price gets back down to a previous order block level.

• We're looking for a confluence of supporting factors on lower timeframes such as daily chart, 4-hour chart, 1-hour chart, and 15-minute chart.

• Execution happens around specific swing points that occur during certain time windows like New York open, London closed etc.

Trading Opportunities in Weekly Timeframe

In this section, the speaker discusses trading opportunities in the weekly timeframe and how traders can take advantage of them.

Profitable Trading Strategies

• Traders can trade optimal trade entry Long's or any bullish harmonic pattern inside an accumulation phase of the day.

• Bullish stochastics or bullish MACD can also be traded profitably in this environment because we have a market trending higher with open order flow on a weekly basis.

Risk Management

• It is paramount that traders understand they are not increasing their risk or leverage on these trades.

• They should keep their risk very low while opening their minds and eyes to extremely large profit potential.

Importance of Patience in Trading

In this section, the speaker emphasizes the importance of patience in trading and how it can lead to profitable trades.

Profit Potential

• Traders should keep their risk low but open their minds and eyes to extremely large profit potential.

• They can take a small portion of the trade off fund their position and get all the risk out of the trade.

Importance of Patience

• Traders need to have patience and wait for price and time to meet before engaging in trading.

• This means waiting for specific swing points that occur during certain time windows like New York open, London closed etc.

Trading Opportunities in Weekly Order Blocks

In this section, the speaker discusses how to find trading opportunities within weekly order blocks and how to manage risk effectively.

Hypothetical Trade Example

• The speaker assumes a hypothetical trade scenario where a long position is taken within a weekly order block with a 30 pip risk.

• Once the trade moves 30 pips, the speaker suggests going to break-even and removing all risk.

• If trading with one standard lot and five mini lots, the potential profit could be over $5,000 while only risking $300.

Benefits of Trading Weekly Order Blocks

• Trading within weekly order blocks can provide significant profit potential while minimizing risk.

• By focusing on a few major currency pairs, traders can create a portfolio that maximizes these types of setups and minimizes drawdown periods.

Using Long-Term Positions for Risk Management

• Long-term positions can act as a "magic eraser" for poor execution or trade selection.

• When waiting for long-term positions to set up, traders can still establish larger-risk trades while staying in line with higher time frame premises.

• Traders should avoid trading against higher time frame premises and limit their maximum risk to 2%.

Trading Strategies for Institutional Order Blocks

In this section, the speaker discusses how to trade institutional order blocks and support resistance levels.

Identifying Order Blocks

• Wait for retracements to come back into known order blocks.

• Use the top of a candle as the beginning of an order block.

• Look for institutional order blocks on weekly charts.

Trading Order Blocks

• Take the same amount of leverage and entry as a normal short-term or intraday trade.

• Buy anywhere within an order block to get back to an old high.

• Smaller ranges can still yield several hundred pips in profit.

Defending Support Resistance Levels

• If there is an order block in the framework of a price structure, it is unlikely to give up that level.

• Traders with a vested interest in defending a support resistance area will buy more of it if price comes down into it.

Working Both Directions with Price Structures

In this section, the speaker introduces a concept for working both directions with price structures.

Concept Introduction

• The speaker introduces a new price structure and hints at discussing how to work both directions with it.

Trading off Weekly Charts

In this section, the speaker discusses how to trade off weekly charts and identifies key levels of support and resistance.

Identifying Order Blocks

• The speaker explains that when price is in a support level, it creates an opportunity to buy inside a pre-existing order block.

• A new order block is created when price comes back down and dips into the support level.

• The lowest low before price starts moving higher forms inside this order block.

Using Fib Levels for Confluence

• The speaker demonstrates how to use Fibonacci retracement levels to identify confluence with an order block.

• When trading away from the round number 1830, a six-pip drawdown is respectable.

Market Structure Analysis

• The speaker discusses market structure analysis and identifies swing lows and highs on the chart.

• If the high at 492 is taken out, there could be an opportunity to trade back into the old high at 760 pips from entry by leaving a small portion of the trade on.

Understanding Support and Resistance Levels

• The speaker emphasizes that traders should understand why dealers take prices where they do before real moves take place.

• Traders should not rely solely on their lines but instead use them as reference points because levels are traded based on liquidity available around those levels on an institutional level rather than a retail level.

Trading Order Blocks

• The speaker explains that when an order block is broken, traders should wait for another opportunity to trade back down into it.

• An old high or resistance can become an inversion level and support if it is violated by price action.

• Traders should look for weekly order blocks to trade off of.

Trading Strategies

In this section, the speaker discusses trading strategies based on weekly charts and order blocks.

Utilizing Order Blocks

• The framework of the trade is derived from a weekly chart.

• When buying inside a pre-existing order block, wait for price to rally up to old highs and try to reach through it.

• When price comes back down to an area of support resistance, we have market structure signifying that we do have a trading range that was violated coming back down into very clear discernable support resistance.

• Once price starts to rally, view candles with more body than wick as bullish indications.

Catching Long Trades

• Hunt for daily four hour one hour 15 minute or 5-minute bullish price patterns at the time of open or close on the session.

• Assuming you catch a long trade, use the worst-case scenario: the actual order block high back to the old high is over 300 pips again leaving a small portion just in case it wants to run and run it does continue trading higher.

Weekly Timeframe

• It's still beneficial to utilize the weekly timeframe because it is another reason to frame rather explosive trades and also very large profit objectives in terms of looking for where prices may reach.

• When you have a confluence of order flow on a weekly basis going one direction and you're looking for order blocks inside that same premise, it's absolutely crazy how much these moves move.

[t=0:33:27s] Trading with ICT Kill Zones

In this section, the speaker discusses how to trade using ICT kill zones. He explains that traders should focus on one side of the market and look for daily, hourly, 15-minute, and 5-minute price patterns to enter long positions around time and price windows of the London open, New York open, and London close.

Using Order Blocks for Long Positions

• The speaker advises traders to look for long positions inside order blocks.

• When time and price meet at an ICT kill zone within an order block, there is a potential profit of 1365 pips.

• It takes about three months to get to 1300 pips.

• Traders can use weekly order blocks to frame old highs and lows as targets.

Weekly Range Premise

• The speaker emphasizes that trading with this premise gives traders a long-term perspective.

• Once order blocks start to unfold, traders can use them for scalping short-term intraday trading or short-term trading with the weekly range premise.

Directional Premise

• The directional premise helps traders keep their focus on the direction of the market.

• Traders can use it in conjunction with other strategies such as scalping or day trading.

Conclusion

• The speaker concludes by saying that there are many opportunities available when trading with ICT kill zones.

• He encourages traders to focus on one side of the market and use order blocks for long positions.