ICT Live 2016 (Rare Order-Block Explanation)

Name: ICT Live 2016 (Rare Order-Block Explanation)
Uploaded: 2022-10-11T04:00:12.000Z
Duration: 6 h 11 s
Description: This is one of my favorite lectures from Michael, hope you all enjoy it. @InnerCircleTrader

Introduction

The speaker introduces the topic of the dollar index and contrasts his approach to supply and demand with that of other traders.

Dollar Index and Supply & Demand

The speaker contrasts his approach to supply and demand with that of other traders.

He explains how ICT order blocks work, giving specific levels to look at, which is more precise than supply and demand zones.

While supply and demand concepts can get you to an area where trades will likely form, they do not give you the trade levels to trade at or a specific price level for defining risk or profit objectives.

The speaker emphasizes that he did not improve on supply and demand but rather developed his own unique approach based on his experience as a trader.

Support & Resistance vs Supply & Demand

The speaker discusses the fallacy of using support and resistance or supply and demand zones without understanding why they work.

Understanding Support & Resistance

The concept of support and resistance was introduced to traders when they first got involved in trading. However, many traders applied it without understanding why it worked.

Applying trend line analysis to a zone is similar to applying support and resistance concepts without understanding why they work. A zone has no basis in your trading except for highlighting a potential area where trades may form.

Selecting where you're going to get in must be based on institutional sponsorship at that price level, not just looking at a zone or trend line analysis alone.

Understanding Support and Resistance

In this section, the speaker discusses the concept of support and resistance in trading. He explains that while he has a module that teaches specific levels and how to apply support and resistance, it is not the be-all end-all of trading. The missing link is understanding why the market should find support or resistance.

ICT Order Block

The ICT order block is based on real institutional trading.

The speaker has worked in this field and knows what he's talking about.

It provides access to price levels where institutions are likely to buy or sell.

Importance of Psychological Barriers

Many traders have experienced drawdown despite having good skill sets.

A good mentor should teach you how to get out of the hole you dug for yourself before finding them.

Traders need to adopt thought processes necessary to get through psychological barriers.

Fibonacci Levels

Fibonacci levels can help illustrate returning back inside a range.

They give traders a crutch to find sweet spots but are not necessary once you understand price action.

The 50 level is like a phenomenon that likes to go halfway somewhere.

Speaker's Motivation

The speaker is not selling anything and does not care if listeners make money or not.

He shares his knowledge because he has a record of it for his children.

He hopes trolls stick with him because if he can convert one, that's what he's looking for.

The Importance of a Professional Mindset

In this section, the speaker emphasizes the importance of having a professional mindset in trading and explains how retail tools can hinder traders from achieving this.

Retail Tools vs. Professional Mindset

Retail tools such as MT4 or TradingView can be overwhelming and distracting for traders.

Traders need to spend time in the price charts themselves to develop a professional mindset.

Learning comes from seeing things repeatedly unfold in the charts, not from applying indicators or regurgitated strategies.

Dependency on others' strategies is not desirable; traders should strive for independence.

The Speaker's Model

The speaker's model does not involve copying his trades but rather developing an independent understanding of the market.

The speaker wants his children to be independent of him, and he applies this same principle to his teaching style.

ICT Order Blocks vs. Supply and Demand Zones

In this section, the speaker discusses ICT order blocks and how they differ from supply and demand zones. He also critiques other educators who claim to teach institutional order flow.

ICT Order Blocks

ICT order blocks are specific levels that indicate institutional order flow.

Other educators may use ambiguous supply and demand zones instead of true order blocks.

Understanding why a level becomes resistance or support is more important than simply identifying it as such.

Critique of Other Educators

Some educators misrepresent their qualifications by claiming to have worked for banks or created software programs for them.

The speaker does not want his teachings to be misrepresented by others who try to sell them under a different name.

The speaker emphasizes the importance of doing one's own research and not taking anyone's word for it.

Introduction

The speaker introduces himself and explains that he speaks his mind. He emphasizes the importance of studying price action and knowing when a level will become resistance.

Importance of Studying Price Action

Before a level becomes resistance, you must have an idea or mindset going into that price level.

If you can't identify a potential resistance level before it happens, it's already a missed opportunity.

Supply and demand is key to understanding this concept.

Mean Threshold

The speaker discusses the mean threshold and how it relates to institutional trading.

Understanding the Mean Threshold

The middle of an up candle is where institutions are likely to trade at many times.

This is because it's often the highest point the price will go before moving down.

When measuring the body of an up candle prior to a down price leg, this creates the swing high or resistance level.

Bank Trading

The speaker talks about bank trading and how they unload their trades as prices move up.

Unloading Trades in Bank Trading

Banks cannot effectively unload their trades as prices start moving away from them because they don't get efficient exit points for potential profits.

Banks have large trade sizes, so they need counterparties of equal or greater size to eat into that move.

Institutional traders sell into up candles prior to a down price leg.

Understanding Price Action and Institutional Trading

In this section, the speaker explains how institutional traders sell into bullish candles to get specific price levels. He also highlights that these transactions are common knowledge on the interbank level and cannot be seen on retail platforms like MT4 or Market Profile.

Selling into Bullish Candles

Institutional traders sell into bullish candles to get specific price levels.

The likelihood of price getting back into the body of the candle and up to the high is very slim.

Although there may be a few times where it does happen, it's not always going to happen.

Supply and demand traders use this concept as a hook for their trades.

Interbank Transactions

Interbank transactions are common knowledge because banks need counterparties to transact large amounts of money.

These transactions cannot be seen on retail platforms like MT4 or Market Profile.

To see them, one needs to be in that environment and elbows-to-elbows with it.

The speaker had to bridge his understanding through what he saw in price action.

Making Money as a Trader

The speaker encourages traders to trade their own money instead of selling analysis or signal services.

He believes that if someone is confident enough to teach others, they should be confident enough to trade their own money.

Traders have enough information available already to leave their jobs and live their own lives.

Drawdown and Liquidity

In this section, the speaker talks about drawdown and liquidity in trading.

The Up Candle

The speaker explains that the up candle is where they sell.

He suggests drawing out the selling that they're really trying to get in here all the movement past the halfway point of that candle.

This is all stops, and this liquidity is reaching up air expanding for the liquidity.

Volume and Foreign Exchange Market

The speaker acknowledges that the Foreign Exchange Market is not a centralized exchange but an electronic medium.

He shares his experience of coming from Trading Futures and making millions of dollars trading commodity markets.

He emphasizes that he knows more about Futures Market than he has shared with Foreign Exchange Market.

The speaker highlights how liquid spot market is compared to retail world.

Benefits of Spot Market

The speaker explains how he trades millions of dollars in a bank level without leveraging through Prime brokerage accounts because there's no leverage.

He highlights how liquid spot market is compared to retail world, giving him an option to choose whether or not he wants the price offered to him.

He contrasts it with retail world where once you're filled gets your price, you can't do anything else.

Understanding ICT Order Blocks

In this section, the speaker explains what an ICT order block is and how to identify it.

Identifying ICT Order Blocks

An ICT order block is where banks are trading.

It's the low of the up candle product of the down move up to the middle of the range.

The Midway Point is anything above that is too thin of liquidity.

You have a 90% likelihood it's going to trade into that right here between the middle of the range down to the low.

Many times, trades occur right at the low.

Specific Price Levels for Trading

In this section, the speaker discusses specific price levels for trading and how banks use them.

Institutional Levels

Banks have specific levels in mind when they trade, not just vague supply and demand zones.

Knowing these levels is crucial because they repeat over and over again.

The process is always the same regardless of timeframe, but larger timeframes are better since banks don't trade on smaller timeframes.

Finding Levels

Look for round numbers starting with 80s, 50s, 20s, and round again so you have a full figure mid-figure.

The first level to go to immediately is mid-figure 99.50.

Another potentially available level for a trade setup is level 20.

Understanding Price Levels

In this section, the speaker discusses how to identify specific price levels and precision price points for trading.

Identifying Key Price Levels

The 9950 level is a key price level to watch.

Look at the bodies of the candle to see where the bulk of volume is being traded.

Once there's a trade at a price level, everything below it becomes active.

Precision Price Points

Specific precision price points are more important than zones.

The orange area on the chart is where you should be looking for trades.

A 15 pip variance between what you anticipate seeing happen and where it actually forms is a realistic expectation.

Top-down Analysis and Trading Concepts

In this section, the speaker discusses top-down analysis and how to use trading concepts to build understanding.

Top-down Analysis

Use top-down analysis to understand where trades are going to set up.

There may be a deviation between where you expect trades to form and where they actually format.

Trading Concepts

Banks do not base billions of dollars on animal patterns or harmonic patterns.

Harmonic patterns do not move price.

Understanding Institutional Order Flow

In this section, the speaker explains how institutional order flow is more important than supply and demand in trading.

Fundamentals vs. Institutional Order Flow

The banks can change their mind about fundamentals, making it difficult to trade based on them.

Countries' economies focus on different topics at different times, leading to a gravitational attention placed more on one or two market drivers.

Trading based on fundamentals is not practical for day-to-day trading because opinions vary and price action shows everything you need to know.

Institutional Order Flow Importance

Understanding institutional order flow is crucial because it shows when institutions have changed gears fundamentally.

Price action will show everything you need to know about what institutions are doing in the marketplace.

Trading Based on Opinions

It's not advisable to care about anyone's opinion in the marketplace, including mentors or other traders.

Instead of focusing on opinions, traders should focus on what institutions are doing through institutional order flow analysis.

Conclusion: Trading Inside a Sandbox of Liquidity

In this section, the speaker emphasizes that retail traders are trading inside a sandbox of liquidity and that accidents happen when they cross the yellow line and drive too fast.

Retail Traders vs Banks

Retail traders are trading inside a tiny sandbox of liquidity that banks cannot see.

Banks drive prices by placing stops above old highs and below old lows because everyone does the same thing.

Accidents Happen When Crossing Yellow Lines

Accidents happen when traders cross the yellow line and drive too fast.

Traders should focus on understanding institutional order flow instead of relying on opinions or fundamentals.

The Importance of Stop Loss Orders

In this section, the speaker discusses the importance of stop loss orders in trading and how they can be used as a defense mechanism.

Stop Loss Orders

Stop loss orders are crucial for minimizing risk in trading.

They act as protection against losses but can also be viewed as a bullseye by banks and other traders looking to absorb liquidity.

The only defense mechanism in trading is the stop loss order, which is why it's important to use them effectively.

Traders often make the mistake of not taking their trades off when they see that their stop loss will be hit, leading to larger losses.

Banks don't typically use stop loss orders because their pockets are deep enough to absorb losses.

Identifying Stops in Trading

In this section, the speaker talks about how identifying stops can help traders make profitable trades.

Market Maker 12

Market Maker 12 is a tool that helps identify stops in trading and predict where price may move based on open interest levels.

It's important to understand turtle soup environments versus staying under a low when using Market Maker 12.

There are 12 main things inside of Market Maker 12, two of which have been redone for better clarity.

Understanding Fundamentals in Trading

In this section, the speaker discusses the importance of understanding fundamentals in trading and recommends a course by Chris Laurie for those interested in learning more.

Importance of Fundamentals

The speaker explains that while fundamentals are important, they may not always be reflected in short-term trading.

The speaker emphasizes that it is only when trading with long-term fundamental basis that fundamentals have merit.

Course Recommendation

The speaker recommends a course on fundamentals by Chris Laurie available at chrislaurie.com or protradersclub.com.

The course is affordable and well-presented, according to the speaker.

The speaker believes that the course is effective and useful for those interested in learning about fundamentals.

Identifying Resistance Levels

The speaker explains how to identify likely resistance levels using daily charts and other techniques taught over the last five years.

Institutional Order Flow

In this section, the speaker discusses institutional order flow and how to identify specific levels that banks trade with.

Identifying Specific Levels

Banks trade with round numbers or increments of five.

Look for institutional order levels such as 50s, 20s, 80s, full figures, and double O levels.

These levels can be identified by studying price action on charts.

Trading Strategies

When price trades up into these levels, look for setups to enter the market.

On a smaller time frame (e.g. four-hour chart), look for potential new bearish order blocks when price starts to break down from these levels.

Use the low to the body of a candle to identify potential short-term bearish order blocks.

Top Down Analysis

In this section, the speaker discusses top-down analysis and how it can be used to analyze institutional order flow on different time frames.

Analyzing Institutional Order Flow

Use top-down analysis to analyze institutional order flow from daily charts down to four-hour charts.

Identify potential new bearish order blocks on smaller time frames when price breaks down from key levels identified on higher time frames.

Trading Strategies

Look for setups at specific price levels identified through top-down analysis.

Use low-to-body candle identification method for identifying short-term bearish order blocks.

Using Candlesticks to Identify Institutional Order Blocks

In this section, the speaker discusses how to use candlesticks to identify institutional order blocks.

Identifying Bearish Order Blocks

When there's a smaller candle, use the wick to the body of the candle for bearish shorter blocks.

Use the low to the body of the candle for identifying bearish order blocks.

Institutional levels are double O 80s 50s 20s and back to double up smaller round numbers can be utilized in between those other levels if there is a premise or reason to use them.

Refine it down to specific price points such as 99.70 or 99.65.

Understanding Price Movement Inside an Identified Range

In this section, the speaker explains how price movement works inside an identified range.

Selling Inside a Range

We already anticipated selling inside this range here.

Price came up a little bit stabbed through it we allow for that and it starts to come back down.

The price comes back up into it we can look to be a seller again.

It's not going based on what we identify as a bearish order block; it's not going to go too high above that level.

Institutional Levels

Institutional likely not going beyond certain levels such as 80 would be up here on the other side of the body of the candle which is not what we look for.

Supply would say look you know up here there's some supply up here there's some flying this down candle okay so it could go up as high as this this candle here no it won't why would you expect that you know not on a consistent basis

Introduction

The speaker introduces the topic of institutional order flow and how it can be used to identify trading opportunities.

Understanding Institutional Order Flow

Institutional order flow can be used to identify where banks are selling.

A daily ICT order block can help refine entry points for trades.

Two levels, 99.50 and 99.20, are identified as key trading levels based on the daily chart.

Hourly Chart Analysis

The speaker analyzes an hourly chart to demonstrate how market structure models can be used to identify potential sell-offs.

Market Structure Models

Market structure models show a breakdown in market structure.

High swings may indicate that early stops have been taken out.

Daily setups inside ICT order blocks can provide good entry points for trades.

Turtle Soup Setup

The turtle soup setup is based on identifying the low point of a down candle prior to a swing taking out an old high.

Understanding Liquidity in the Marketplace

In this section, the speaker discusses how orders are used to drive up market prices and create excitement and liquidity. He emphasizes that traders should focus on trading liquidity rather than price levels.

Trading Liquidity, Not Price Levels

Orders are used to buy the market and drive up prices, creating excitement and liquidity.

Traders should focus on trading liquidity rather than price levels because markets are only out there to take liquidity.

Traders must agree to take a trade based on the parameters set up in the market, not just because they want a specific price level.

Retail platforms will be close but not identical to interbank pricing engines. Traders must accept this disparity.

Analyzing Price Action

In this section, the speaker explains how traders can analyze price action with a specific mindset. He also discusses how retail brokers differ from prime brokers.

Analyzing Price Action with a Specific Mindset

Traders must analyze price action with a mindset of why things should take place going forward.

When analyzing candlesticks, traders must cut through some candles to get an idea of what is happening in the market.

The speaker explains how bullish order blocks work and how they can be used for buying opportunities.

Retail Brokers vs Prime Brokers

Retail platforms will be close but not identical to interbank pricing engines. Traders must accept this disparity.

Traders can use retail brokers until they have more money to trade prime brokers.

Mitigating Long Positions

In this section, the speaker discusses how long positions are mitigated and how traders can use this information to their advantage.

Mitigating Long Positions

When long positions are established to drive up prices, they must be mitigated by selling them.

Traders can take advantage of this by buying when the price reaches the body of the candle and not waiting for it to reach the bottom of the up candle prior to the down move.

Using Breakers and Liquidity Voids

In this section, the speaker explains how to use breakers in combination with liquidity voids to make trades. They also discuss how to trade on a four-hour setup and create pips.

Using Breakers and Liquidity Voids

Use breakers in combination with liquidity voids to make trades.

Trading on a four-hour setup can create a lot of pips, but it takes more time for trades to pan out.

You can trade these setups every single month.

To go short using the breaker, use the midway point inside the body at rounded to five.

Setting Price Levels

In this section, the speaker discusses how to set price levels when trading using breakers.

Setting Price Levels

The low of the candle is 99.32 and the high is 99.50. The open is 99.41.

The price level you would use to go short using the breaker is 99.35 or 99.40 or 99.30 based on where your risk is.

Trade Selection

In this section, the speaker emphasizes that trade selection should be individualized based on each trader's risk tolerance and proficiency in trading price.

Trade Selection

Your choices on trade selection are ultimately yours; they're never going to be mine or anyone else's.

Your proficiency in trading price isn't going to be at the same level as the speaker's.

Your choices on trade selection are going to ultimately be yours.

If you have the thought process of piggybacking on someone else's trade, you will not be doing this long.

Using Breakers

In this section, the speaker discusses how to use breakers in trading.

Using Breakers

The speaker shows an old high back and explains how to use a breaker in that situation.

Understanding Primary Trend and Order Flow

In this section, the speaker discusses the primary trend of a daily chart and how institutional order flow is primarily long. The speaker also explains how price moves back into an area of order flow and starts to rally up.

Primary Trend on Daily Chart

The primary trend on a daily chart has been going up.

When trading down, it's important to consider what the primary trend is.

Weak Bulls Selling at Old High

Price made a down candle right below an old high.

This setup is similar to optimal or high odds bearish order blocks.

Weak bulls think that this will be resistance so they sell it.

Potentially there could be some supply traders trying to sell it because there's supply there and it sold off.

Professional Traders Buying in Down Moves

Bonus four-hour chart shows a down candle which is a powerful opportunity for professional traders to buy in down moves.

Major setups are found on the daily and four-hour charts.

Banks are going to buy in down moves to get a better average price.

Explosive Price Moves Found on Daily and Four-Hour Charts

Every major setup that you'll see in price is going to be found on the daily in the four hour chart.

Dynamic price levels that lead to sizable explosive price moves are never found outside of those two time frames.

Understanding Supply and Demand in Trading

In this section, the speaker emphasizes the importance of understanding supply and demand in trading. He explains how using Fibonacci retracement levels can help traders identify these key market forces.

Using Fibonacci Retracement Levels

The speaker recommends using Fibonacci retracement levels to identify supply and demand in trading.

Traders should focus on 79% and 60% retracement levels to get a better understanding of market forces.

While some traders may view this as a gimmick, it can be helpful in identifying key market trends.

Framing Future Trades with Context

In this section, the speaker discusses how studying hindsight examples of price action on larger time frames can provide context for future trades.

Studying Hindsight Examples

By studying hindsight examples of price action on larger time frames like daily or four-hour charts, traders can gain valuable context for future trades.

This context provides a framework for developing trading ideas and practicing them with surgical precision.

Aligning Your Thinking with Institutional Traders

In this section, the speaker emphasizes the importance of aligning your thinking with institutional traders to become consistently profitable.

Institutional Traders as Apex Predators

Institutional traders are the apex predators in the market who move prices.

Price action measures the psychological effects of other traders, but only institutional traders matter.

To become consistently profitable, you must align your thinking with institutional traders and understand their mindset.

Viewing Stop Losses as Bullseyes

Institutional traders view stop losses as opportunities, not protections or shields.

Traders should view their stop losses in the same way and understand that they are a bullseye for institutional traders.

Avoiding Trading Gimmicks and Sucker Realms

In this section, the speaker warns against relying on trading gimmicks and falling into the sucker realm of retail traders.

The Dangers of Trading Gimmicks

Trading gimmicks like indicators or systems won't help you become consistently profitable.

Retail traders who rely on these gimmicks are easy targets for institutional traders.

Putting in the Time to Understand Price Action

To become consistently profitable, traders must put in the time to understand price action and align their thinking with institutional traders.

This process takes time and requires seeing price action in real-world examples rather than simply reading about it.

Understanding the Mindset of a Trader

In this section, the speaker discusses the importance of having a proper mindset as a trader. He emphasizes that traders need to have self-talk and engage in a dialogue with themselves to develop an independent and empowering mindset.

Developing an Empowering Mindset

Traders need to engage in self-talk to develop an empowering mindset.

Having a dependent mindset is self-defeating and weak.

Traders need to change their thought process and look at the market independently.

Retail traders often look for someone else to tell them what to do instead of developing their own trading model.

Taking Responsibility for Trading

Traders need to take ownership of their trading decisions, both good and bad.

Traders should internalize trading strategies and make them their own by breaking down each component.

The speaker has given many tools, but traders must take time to understand them fully.

Looking at Price Action

Traders must discern the distinction between how retail-minded traders think versus how they should think when looking at price action.

Retail traders often try to force a square peg into a round hole when it comes to trading strategies.

To be successful, traders must smooth out rough edges by taking time and cutting corners off.

The Importance of Independent Thinking

In this section, the speaker emphasizes the importance of independent thinking in trading and how it can lead to better decision-making.

Independent Thinking

Being an independent thinker is crucial for success in trading.

Copying someone else's trades can be detrimental to your own success.

It's important to take ownership of your decisions and not rely on others for guidance.

Retail traders need to make their own decisions based on their own analysis.

Price Action and Institutional Perspective

In this section, the speaker discusses the importance of understanding institutional perspective when analyzing price action.

Understanding Institutional Perspective

Understanding institutional perspective is key to successful trading.

Retail traders need to align themselves with institutional perspective rather than relying on a retail mindset.

Banks operate using a method that repeats itself over time, with small variances.

Conclusion: The One Thing You Need to Know

In this section, the speaker concludes by emphasizing that there is one thing you need to know in order to be successful in trading.

The One Thing You Need to Know

The one thing you need to know is how banks operate and repeat their methods over time.

Trading Volatility and Institutional Order Flow

In this section, the speaker discusses the importance of studying higher time frames before trading on lower time frames. He also talks about the risks associated with trading volatility against institutional order flow.

Importance of Studying Higher Time Frames

It's important to study higher time frames before trading on lower time frames.

The daily chart can trade past what you think it can on a five-minute chart.

Four-hour time frames are dynamic and explosive, making them ideal for identifying big moves or scalp opportunities.

Risks Associated with Trading Volatility Against Institutional Order Flow

New traders may not have a good understanding of institutional order flow and may take losses when trading volatility against it.

Rushing into live trading without demo trading for months is common among new traders.

The exercise of trading volatility is profitable when applied correctly with institutional order flow, but it requires an understanding of how institutional order flow works.

Example: Down Candle Becoming a Buying Opportunity

A down candle is buying on an institutional level.

When looking at daily and four-hour charts, you want to know where price is going and whether the next setup will be a big move or a scalp opportunity.

Equal highs indicate that a high will likely be run again.

Understanding Market Maker Sell Profile

In this section, the speaker discusses how to use market maker sell profile to anticipate price movements and make profitable trades.

Expectations for Price Movement

The speaker expects the price to move higher and surge.

This is because the bearish daily ICT order block was expected to cause selling at a certain level.

The speaker advises going back to the beginning of the video for more information on this.

Taking Profits and Anticipating Bounces

If you catch a sell based on a bearish order block, take some profits when price trades down into it.

Don't expect it to steamroll through all levels; there will be bounces around.

Expect that there will be consolidation, rallies, reaccumulation, smart money reversal low risk sell-offs, and redistribution.

Using Market Maker Sell Profile

Overlay market maker sell profile onto price movement.

When price surges away from consolidation after a down move, apply market maker cell profile because we anticipate selling event up ahead.

To create a sell scenario up to 99.29 950 level, it has to trade up to it first.

Where is Price Going?

Price is likely going back down below these lows as there are many orders in that area.

Even if this reverses on a longer-term scale like anticipated up ahead, buying here and filling in void or returning back to breaker can still yield profit.

Explosive Market Maker Setup

In this section, the speaker explains how explosive market maker setup works and how traders can use it for profitable trading.

Selling at Breaker

The explosive market maker setup involves selling at the breaker and reaching for liquidity below the low here.

This is because the orders that were bought here and down below are now underwater.

Going short at the breaker is a low-risk setup.

Profit Potential

The profit potential for this setup is 97 pips.

There is also another setup with a profit potential of 84 pips, making it a total of 200 pips in two setups within a day or two.

Where's Liquidity?

Primary questions to ask when trading are where fair market value is and where institutional overflow will take you to liquidity.

Below this low is where stops will be resting once we cleared out this area here of this order block.

The only other level of liquidity below the market is here.

Understanding Order Blocks

In this section, the speaker discusses how to use order blocks to predict market movements and identify selling opportunities.

Key Points:

Order blocks can be used to predict market movements and identify selling opportunities.

When looking at order blocks, it is important to consider the level of liquidity and fair market value.

The body of a candle should be used when determining whether a candle is bullish or bearish.

To sell in an order block, look for levels of liquidity and fair market value.

Trading the Dollar

In this section, the speaker discusses trading strategies for the US dollar.

Key Points:

It is important to consider whether you are trying to catch reversals or hold for a multi-year high when trading the dollar.

The speaker believes that there may be another deeper legged buying opportunity for the dollar in the future.

Explosive price action can lead to trading opportunities in both directions.

Trading with Liquidity

In this section, the speaker discusses how to trade with liquidity and how banks manipulate price action.

Understanding Liquidity

Place your line on the 50 level which is highlighted again on the FIB level.

The bulk of the volume is always indicative and seen through the bodies of the candle not the Wicks.

When you see a liquidity void, look for where there's liquidity below or above it.

Storyline Behind Trading

You have to have a storyline behind what it is that you're trading and why you're trading it.

Banks push price by buying and selling to drive price on a short term to manipulate price action.

They know where stops are located, so they come in like a killer whale to knock them off and eat them.

Cable Running Lower

The cable is running lower at 142.29 on this candle.

Understanding a Consolidating Market

In this section, the speaker discusses how the market seeks liquidity above and below the marketplace in a consolidating market. He explains how price takes out old highs and equal lows, seeking fair market value.

Liquidity Seeking Behavior

In a consolidating market, the market seeks liquidity above and below the marketplace.

Price takes out old highs and equal lows to seek fair market value.

Price cleans out areas of stops before bouncing up to reach for liquidity again.

Smart Money Buying Behavior

Smart money buys on down moves like monthly candles that are down.

Banks can sit on long positions for multi-years because they can hedge their positions.

The smart money holds onto their position without stop losses until it reaches fair market value.

Technical Analysis

If price continues to move through levels, it will aim for lower levels such as 135.02.

January low of 2009 and May 2010 are two levels that cable is gunning for.

On a weekly chart, we see price taking out old highs and equal lows.

Candlestick Analysis

In this section, the speaker discusses how to use candlestick analysis to identify sell-off opportunities.

Identifying Sell-Off Opportunities

Use the middle of the candle mean threshold for a big sell-off.

Look for small little body candles prior to a big move down.

Use the body to wick extension in time to see all that distribution.

Market Analysis

In this section, the speaker discusses market analysis and potential trading scenarios.

December Market Analysis

The market was potentially going lower in December.

The market could reach down into an order block.

Momentum would determine if it could go through that low.

Short Trade

The speaker went short at 143.92 during a New York session trade.

Liquidity Void and Trading Setups

In this section, the speaker discusses liquidity voids and trading setups.

Liquidity Void

Price comes back down into a liquidity void and fills the range from there all the way up.

There is a tug of war on setups on a 15-minute timeframe.

Trading Setups

A bullish environment would expect buyers after a rally up and down candle.

This is exactly how you would expect to be a buyer in normal market conditions.

Short-term Trading Setup

In this section, the speaker discusses a short-term trading setup that could have paid out handsomely. He explains how he went short at a time when the market was most bullish and how it was still a short-term setup.

Shorting into a Buy Signal

The speaker traded short right into what was screaming a buy on a very short-term timeframe.

This was still a short-term setup that could have paid out handsomely.

The speaker notes that rallies off strong where liquidity is above the high.

Liquidity would be above these highs or this High rather.

Importance of Risk Management

In this section, the speaker emphasizes the importance of risk management in trading and how to use demo accounts to test different strategies.

Sticking to Convictions

The speaker sat through all this without a stop loss order or any protection whatsoever and no limit order for profit objective.

If you are willing to absorb the move up to here and still stick to your overall convictions that it's going to trade lower, then you can take something from it.

Using Demo Accounts for Positive Reinforcement

The speaker asks how taking an exercise like this and being short here can be used as positive reinforcement even though it's in a demo account.

By doing exercises like this, traders can see reactions and moves before they happen. It will give them input that they'll use for future trades either in their demo account if they're still on the development stage or in live trading.

Reading Market Signals

In this section, the speaker discusses how to read market signals and make informed trading decisions.

Identifying Order Blocks

The speaker asks what is seen when price comes down and starts to roll.

The middle of this up candle goes all the way up, but ultimately starts to sell off.

Price runs reaching for the order block right here.

Smart Money Sells in Up Candles

The speaker notes that it's a fair shoulder block, but it's an up candle. He asks who sells in up candles.

Smart money, banks, deep pockets, people with more money than its for sure.

Selling Strategy

In this section, the speaker discusses a selling strategy for trading in the low to midpoint range. The speaker also mentions that they only trade during specific time zones.

Selling Strategy

The speaker recommends selling from the low up to the midpoint.

They suggest selling anywhere in this area but only during specific time zones such as ICT Killzone for London and New York open or London close.

Cable Trade and Timeline Expectations

In this section, the speaker talks about their recent cable trade and timeline expectations for traders who are still learning.

Recent Cable Trade and Timeline Expectations

The speaker discusses their recent cable trade where they called cable lower using a higher timeframe setup.

They mention holding onto the trade and taking profits before Average Joe's development state.

The speaker gives a timeline of what to expect when trading systematically, which will take a couple of months.

Dollar Bond Decoupling

In this section, the speaker talks about dollar bond decoupling and why they are not following it at this time.

Dollar Bond Decoupling

The speaker is not following dollar bond decoupling because they believe that interest rate markets are about to crash.

They advise against trading all debt instruments right now.

Forex LTD Larry Tom Dick Platform

In this section, someone asks about Forex LTD Larry Tom Dick platform, and the speaker responds with information on how to find it.

Forex LTD Larry Tom Dick Platform

The speaker recommends searching for MT4 platform Forex LTD Larry Tom Dick on Google to find the dollar index.

Recording of Session

In this section, someone asks if the session is being recorded, and the speaker confirms that it is.

Recording of Session

The speaker confirms that the session is being recorded.

Correlation Between S&P and Currencies

In this section, someone asks about the correlation between S&P and currencies, and the speaker responds with information on how Aussie dollar does well with S&P.

Correlation Between S&P and Currencies

The speaker mentions that Aussie dollar does really well with S&P.

Use of Confirmation in Trades

In this section, someone asks if the speaker always uses confirmation in trades, and they respond by saying that 99% of their trades have some measure of an smt attributed to them.

Use of Confirmation in Trades

The speaker says that 99% of their trades have some measure of an smt attributed to them.

Trading Against Dollar

In this section, someone asks why they manipulate the dollar when free retail traders trade against it. The speaker explains that when trading all pairs like pound-dollar or cable, you are trading against the dollar.

Trading Against Dollar

The speaker explains that when trading all pairs like pound-dollar or cable, you are trading against the dollar.

They mention that if you trade cable short, then you are trading the dollar.

Importance of Dollar in Trading

In this section, the speaker talks about the importance of the dollar in trading and how it is a barometer for discerning the health or strength or weakness of the overall market.

Importance of Dollar in Trading

The speaker explains that the dollar is a barometer for discerning the health or strength or weakness of the overall market.

They mention that it's one of the things that's very foreign often missed mistaken for its effectiveness or importance.

Euro Pound Trade

In this section, someone asks if anyone else expected Euro pound to go higher, and they discuss how foreign exchange works with three currency pairs.

Euro Pound Trade

The speaker asks if anyone else expected Euro pound to go higher.

They discuss how foreign exchange works with three currency pairs and how holding onto dollars gives freedom for other foreign currencies

Understanding Currency Consolidation and Trending Environments

In this section, the speaker explains how to identify currency consolidation and trending environments. He also discusses how different currencies are affected by these environments.

Identifying Consolidation and Trending Environments

The British pound has more freedom to move than the dollar in a trending environment.

The cable is moving lower in a primary downtrend, while the dollar is stuck in its range.

The euro is in a holding pattern as well, with a large consolidation that may last for an extended period of time.

Understanding Currency Relationships

Draw a triangle on your piece of paper with the dollar at the center, Euro on the lower left, and British pound on the lower right.

The dollar and Euro are in consolidation, while the British pound is allowed to move lower.

Connect Euro and British pound on your chart or picture.

If cable or British pound is dropping in a trending environment and Euros being held what reaction and price action what direction would that indicate or ex what you would expect to see in Euro pound what direction should it go up or down?

Trading Opportunities

These setups happen only a few times each year but can be very profitable if understood correctly.

Understanding Market Profiling

In this section, the speaker discusses how to use market profiling to identify trends and consolidations in the market.

Identifying Ranges

The speaker uses Larry Williams' technique of identifying small ranges within larger ones.

He looks for primary price swings by going through candles instead of relying on supply and demand theories.

Market Profiles

The speaker identifies a market maker buy profile as a signal for a bullish trend.

He explains that he uses market profiling to determine whether a currency is consolidating or trending.

Trading Opportunities

The speaker identifies the Euro pound as an example of how to identify trading opportunities using market profiling.

He explains that experience is necessary to identify correlated setups and build trading strategies.

Finding Explosive Price Moves

In this section, the speaker discusses how to find explosive price moves in the market.

Identifying Macro Type Events

Look for macro type events that are being set up on a daily chart.

These events usually last several weeks to a couple of months.

Find trades with 20-30 pips risk and over 500 pips reward.

Use money management and trade setups to set up a trade.

Understanding Currency Pairs

When one currency is being held, it creates an environment for explosive price moves in the other currency.

If Euro is ripping and Cable is being held, it indicates that Euro Pound will show appreciation going higher.

The same phenomenon takes place on lower time frames too.

Questions and Conclusion

The platform logs all questions asked during the presentation, allowing the speaker to answer them later if they don't get to them during the recording.

This video should be listened to multiple times as there is a lot of information covered.