2022 ICT Mentorship Market Review - July 18, 2022

Introduction and Update on Content

Health Challenges and Upcoming Series

• The speaker discusses a delay in uploads due to personal health issues, specifically back spasms and migraines. They express their human side, acknowledging that sometimes the body doesn't cooperate with plans.

• An upcoming series titled "ends" is mentioned, with the first episode tentatively scheduled for Friday at 10 PM Eastern Time. The frequency of uploads will be weekly.

Reacclimating to Market Conditions

• After being away from trading, the speaker feels detached from market sentiment and needs time to readjust. They emphasize the importance of working out kinks in their analysis upon returning to trading.

• To reacclimate, they utilize demo trades which allow them to practice without financial risk while getting accustomed to current market conditions. This method helps them avoid preconceived notions about price movements.

Trading Strategy Insights

Entry Techniques and Market Analysis

• The speaker analyzes a five-minute chart of the E-mini S&P, focusing on specific lows and gaps as potential entry points for trades. They describe observing market behavior around these levels during key times like 8:30 AM and 9:30 AM when equities open.

• A stacking effect using down close candles is discussed as part of their entry strategy, aiming for an imbalance that was eventually tested but struggled to break through successfully. A link is provided for viewers to see a recording of this execution process on Twitter.

Managing Trades and Adjustments

• The speaker reflects on realizing when they are "offside" or wrong in their trade decisions; this does not always lead them to reverse positions immediately but emphasizes continuous engagement with the market for better insight into price action dynamics.

• They clarify that while they engage frequently in demo trading, students should not feel pressured to constantly switch between long and short positions; instead, it’s about gaining confidence in analysis through active participation rather than passive observation.

Observations During Trading Sessions

Trade Management Decisions

• As they monitor price movements post-trade execution, the speaker notes intentions regarding partial exits from contracts based on relative equal highs identified earlier as liquidity targets (July 8th & June 27th/28th). Their approach involves careful management of trades based on observed market behavior at critical levels.

• Despite exiting some trades without incurring losses due to demo account usage, they discuss adjusting stop-loss orders during trade management processes leading up to lunch hours where significant price drops occurred unexpectedly afterward.

Price Action Analysis

• Throughout the session, they observe how prices interact with established order blocks and fair value gaps created by previous candles—highlighting instances where prices respected these levels before selling off again after hitting certain thresholds during trading hours.

This reinforces their cautious approach towards engaging further in live markets until confidence is restored in their analysis capabilities post-break from trading activities.

Back in the Saddle: Navigating Market Dynamics

Reconnecting with Market Analysis

• The speaker expresses a cautious return to market analysis after a break, emphasizing the need to ease back into understanding price movements and charts.

• Observations on order flow reveal unexpected bearish trends; the speaker admits surprise at the extent of the market drop, highlighting a disconnect from prior expectations.

• Despite initial misjudgments about market direction, the speaker demonstrates adaptability by adjusting strategies based on real-time price action during trading sessions.

Analyzing Price Movements

• The speaker discusses specific trade setups and imbalances observed in 15-minute time frames, indicating areas where partial trades could have been executed.

• Acknowledging personal rustiness as a trader, there is no embarrassment over mistakes; instead, there's an emphasis on learning from experiences rather than fearing failure.

Understanding Market Sentiment

• The importance of recognizing failed rallies is stressed; if bullish sentiment were accurate, prices should have surged above previous highs but did not.

• The opening gap for the week is identified as a critical reference point for potential price movement throughout the day.

Key Levels and Imbalances

• Discussion of early lows and potential sell-side opportunities indicates strategic thinking around market behavior and expected movements.

• Reference to hourly imbalances suggests that certain levels may be significant for future trading decisions; these are linked to historical highs from June 2022.

Embracing Uncertainty in Trading

• The speaker reflects on feelings associated with returning to trading after time away, acknowledging both knowledge of trading concepts and current market conditions' unpredictability.

Market Analysis and Trading Insights

Current Market Sentiment

• The speaker discusses the potential for a sell-off in the market, noting that previous attempts to rise were unsuccessful. This could indicate bearish sentiment as the week progresses.

• Transparency is emphasized; the speaker admits uncertainty in their predictions, highlighting internal conflicts that may lead to overriding established trading rules.

• Personal experience plays a significant role in decision-making, where trusting one's instincts can yield favorable results but also risks deviating from learned strategies.

Trading Strategies and Experiences

• New traders may struggle to appreciate when to engage with price movements outside of their current models, often relying on past experiences for guidance.

• The speaker shares a personal trading experience where they initially misjudged a trade but adapted by closing and reversing positions based on what made sense at the moment.

Correlation Between Gold and Dollar

• A prior discussion about gold indicates an expectation of lower prices due to an anticipated rise in the dollar's value, emphasizing their inverse relationship.

• The market is described as event-driven and manipulated, suggesting caution when trading unless clear opportunities arise.

Bond Market Influence

• The bond market's consolidation is affecting S&P market behavior; both markets are currently experiencing tight ranges without significant trends.

• Index futures are expected to remain choppy due to this lack of movement in interest rates, which impacts overall market dynamics.

Trading Environment Considerations

• In a consolidating market environment, traders should adopt short-term strategies rather than holding positions over several days.

Trading Strategies and Mindset Shifts

The Importance of Nimbleness in Trading

• Emphasizes the need for traders to be nimble, focusing on short-term setups (5-minute or 1-minute charts) rather than longer time frames like 15-minute, hourly, or daily candles.

• Discusses a missed opportunity during a significant market downturn due to a shift in trading models that favored short-term entries over broader trends.

Adapting to Market Conditions

• Acknowledges that there will be days when trades may not align with expectations; being adaptable is crucial for success.

• Shares personal experiences of changing trading direction based on market behavior, highlighting the importance of flexibility in strategy.

Risk Management and Profit Taking

• Advocates for aggressive profit-taking strategies, including taking partial profits and setting stops to minimize losses while maintaining demo equity.

• Clarifies that it's not necessary to always be in the market; sometimes going against initial biases can lead to better outcomes.

Learning from Mistakes