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ICT Mentorship Core Content - Month 04 - Double Bottom Double Top
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ICT Mentorship Core Content - Month 04 - Double Bottom Double Top

Introduction to Double Tops and Bottoms

In this section, the speaker introduces the topic of double tops and bottoms in trading. They mention the importance of understanding measured moves and clean highs and lows in price action.

Measured Moves and Clean Highs/Lows

  • Measured moves are a recurring phenomenon in the market.
  • Price swings can be projected to reach certain levels based on previous price action.
  • The speaker blends institutional trading concepts with retail trading strategies.
  • Price delivery and double tops/bottoms indicate potential future price movements.
  • Liquidity pools and ranges above and below a consolidation area should be analyzed.

Analyzing Liquidity Pools and Ranges

The speaker discusses how to analyze liquidity pools and ranges on a chart.

Liquidity Pools Analysis

  • Identify the range where price is consolidating.
  • Note the opening price, high, low, and closing prices within that range.
  • Determine if there is a gap or liquidity void within the range.
  • Look for fair value gaps or order blocks as potential turning points.

Trading Strategies for Double Tops

The speaker explains different trading strategies for double tops.

Retail Perspective vs Institutional Perspective

  • Retail traders see double tops as resistance levels, leading them to short positions.
  • Retail traders place protective buy stops above the highs of double tops.
  • Institutional traders want retail traders' buy stops to be triggered before reversing their positions.

Trading Scenarios

  1. Scenario 1:
  • Price drops into fair value gap or order block below the double top level.
  • Price may then rally back up to clear out retail traders' buy stops above the double top level.
  1. Scenario 2:
  • Price trades into the liquidity void above the double top level.
  • Price may then reverse and trade lower to close the fair value gap or hit a bullish order block.

Example of Double Tops Trading

The speaker provides an example of trading double tops.

Example Analysis

  • Identify a double top pattern on the chart.
  • Note the presence of a shoulder block before the up move.
  • Retail traders perceive this as resistance, leading to short positions.
  • Institutional traders see it as a buying opportunity.
  • Measure the distance between the high and low of the double top pattern for projection purposes.

Conclusion and Projection

The speaker concludes by discussing projections based on double tops.

Projections Based on Double Tops

  • Retail traders expect price to reach projected levels based on double tops.
  • Institutional traders consider these projections but also look for further potential movements beyond them.

New Section

The speaker discusses market rallies and momentum divergence, as well as the concept of double tops and bottoms in trading.

Market Rallies and Momentum Divergence

  • The speaker mentions that there may be some kind of momentum divergence in the market.
  • They suggest using a momentum indicator to analyze this divergence.

Double Tops and Bottoms

  • At a level of old resistance, there is a double top formation.
  • Retail traders may see this as a selling opportunity, while the speaker believes it will go up to 74.45.
  • Buy stops are placed above the double top for potential upward movement.

Downward Move and Double Bottom

  • There is a subsequent downward move after the market reaches the double top.
  • Liquidity below the lows is targeted by traders, leading to sell stops building up.

Projection Based on Range

  • The range from high to low is projected downwards to determine an algorithm objective for price expansion.
  • This projection helps identify levels where price will seek downside liquidity.

Algorithm's Reference Points

  • The algorithm recognizes reference points such as double tops and bottoms, even if time has passed since their formation.
  • Consolidation patterns are used to project price movements above and below these reference points.

Spike Reversals and Market Reactions

  • Spike reversals occur on both sides of the marketplace due to projections based on double tops and bottoms.
  • Market makers and interbank algorithms seek liquidity above old highs and below old lows through stop runs.

High Probability Trading at Extremes

  • Extreme ends of the range offer high probability trading opportunities.
  • Double tops and bottoms help frame the extremes of the current trading range.
  • Highlighting these levels on charts provides precision levels for buy stops and sell stops.

Using Higher Time Frame Charts

  • Higher time frame charts, such as the hourly chart, require different strategies than intraday trading.
  • The algorithm reaches for reference points based on double tops and bottoms to determine price ranges.

Range Projection and Insights

  • The range projection inside a consolidation pattern determines the distance of price movement.
  • Clean levels, like double tops and bottoms, provide insights for future trades or understanding market reactions.

Reaching for Cell Stops

  • If buy stops have been taken already, the speaker discusses which side of the marketplace will reach for cell stops.
  • This can be observed in the given example.

The summary has been provided in English language and markdown format as requested.

Playlists: 2016 ICT Private Mentorship Core Content Month 04
Video description

2016 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in December 2016. 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.