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ICT Mentorship 2023 - September 27, 2023 PM Session Market Review
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ICT Mentorship 2023 - September 27, 2023 PM Session Market Review

New Section

The speaker begins with a brief review and mentions the dollar index. They discuss the expected back and forth movement in the market and revisit their analysis on the euro-dollar.

Dollar Index Analysis

  • The speaker mentions that certain levels in the dollar index will be used as a draw, indicating that it is not expected to be a straight run.
  • They discuss how the market reached below a certain level, which was anticipated as a draw for liquidity.
  • Looking at the four-hour chart, they point out consolidation around an old low and measure sell-side imbalance and buy-side efficiency.

Euro-Dollar Analysis

  • The speaker notes that there was a breakaway gap and a drop into sell-side imbalance on an hourly chart.
  • They mention watching for an immediate rebalance if price trades up to a specific level, indicating strong algorithmic signatures.
  • On the 15-minute timeframe, there is a nice drop in price at 7 AM New York time.

Reaching Objectives and Next Steps

  • The speaker suggests that after covering significant ground in various markets, it would be reasonable to expect some retracement or consolidation.
  • They address the question of what to do next when an analysis delivers as expected, emphasizing the importance of knowing what to look for next rather than seeking immediate answers.

Due to limitations in access to timestamps for every bullet point, some points may not have associated timestamps.

New Section

The speaker discusses the recent market trends and the concept of resistance levels.

Market Trends and Resistance Levels

  • The speaker mentions that in the past couple of weeks, the market has been consistently dropping.
  • They emphasize that every up-close candle should be seen as a resistance level in a bearish market.
  • Until there are up-close candles broken with price movement going above them, the order flow remains bearish.
  • The speaker highlights the importance of recognizing consolidation and retracements when deep discount objectives and targets on higher time frames are reached.
  • They contrast this approach with traditional books that often lack clear guidelines for anticipating consolidation or slowdowns in trends.
  • The speaker shares their personal goal of creating a language for analysis that provides rule-based ideas to help traders navigate the market.

New Section

The speaker discusses specific price levels and their significance.

Significance of Price Levels

  • The speaker mentions reaching a certain level (2114) with only a small variance in pips.
  • They explain that after reaching deep discount objectives and targets, it is reasonable to expect consolidation or retracement.
  • This is particularly relevant considering the significant drop in the market leading up to these levels.

New Section

The speaker reflects on their journey as a trader and emphasizes the importance of creating a language for analysis.

Creating a Language for Analysis

  • The speaker shares their experience of struggling to find clear guidelines for anticipating consolidations or slowdowns in trends when they were younger.
  • They express their desire to create a language for analysis that can benefit future generations of investors and traders, including their own children.
  • By providing rule-based ideas through various models, they aim to empower students to develop their own unique approaches to reading price action.

New Section

The speaker emphasizes the importance of tracking progress and learning from mistakes in trading.

Tracking Progress and Learning from Mistakes

  • The speaker highlights the need for a measuring stick to track progress and improvement in trading.
  • They stress the importance of journaling experiences, learning from mistakes, and collecting data to develop personal key performance indicators (KPIs).
  • The speaker shares an anecdote about their son's trading experience and how he learned from his mistakes by reaching his maximum loss limit.

New Section

The speaker discusses the value of consistent trading practices and personal growth as a trader.

Consistent Trading Practices and Personal Growth

  • The speaker emphasizes the value of consistent trading practices over time.
  • They encourage traders to develop their own unique approaches to reading price action as they grow and gain experience.
  • However, they also highlight the initial importance of using established models or frameworks to measure progress and track improvement.
  • The speaker concludes by emphasizing that failure is not logging experiences or making mistakes but rather failing to learn from them.

New Section

The speaker discusses the importance of having a journal to reflect on trading decisions and learn from mistakes.

Reflecting on Trading Decisions

  • Having a journal allows traders to analyze their actions and identify what they did right and where they went wrong.
  • It is important not to beat oneself up over mistakes but rather learn from them and improve.
  • Deviating from rules and going on tilt should not lead to abandoning the trading approach, but rather understanding why it happened and how to avoid it in the future.

New Section

The speaker advises against taking new short positions after reaching a bearish target level, even if there is a possibility of further downward movement.

Avoiding Impulsive Trading

  • When reaching a longer-term bearish target level, it is crucial to resist the impulse of taking new short positions, even if there is potential for further decline.
  • Traders should prepare themselves for times when they don't want to trade or take action, as these situations are more likely to arise during market corrections or shifts in structure.
  • Price movements can be unpredictable, with possibilities of breaking lower, moving higher, or going sideways within a range. The key point is that significant movement has already occurred.

New Section

The speaker highlights the significance of current market conditions and provides insights into price levels.

Market Conditions and Price Levels

  • The speaker mentions being oversold without explicitly referring to indicators due to significant price movement.
  • Traders who have made profits or haven't taken profits yet should consider the current market conditions and not rush into closing their positions or taking new short positions.
  • The speaker points out that the market has reached a target level previously mentioned, indicating the importance of this price level.

New Section

The speaker discusses price action on the 15-minute timeframe and transitions to analyzing the weekly chart for further insights.

Price Action Analysis

  • Despite back-and-forth movements, price action on the 15-minute timeframe has delivered to the low end of an inefficiency area.
  • The speaker mentions looking at indices and suggests transitioning to analyzing the weekly chart for a better understanding.

New Section

The speaker explains volume imbalances and how they relate to price movement.

Volume Imbalances

  • The speaker appreciates positive feedback from viewers and considers it as encouragement for sharing valuable commentary.
  • An inefficiency is identified in terms of volume imbalances, which can provide insights into potential price drops or increases.
  • There seems to be a mix-up between daily and weekly charts, but the focus remains on identifying inefficiencies in price action.

New Section

The speaker explains balanced price ranges and identifies areas of inefficiency in price movement.

Balanced Price Ranges

  • A balanced price range is described as a range between two lines where price moves up and down within that range over time. Inefficiencies occur when there is a significant move outside this range.
  • Price spent most of its time in the upper portion of the range, but it recently moved outside, creating an imbalance.
  • The speaker emphasizes that if price returns to this range in the future, it would require a significant move to cover the ground already covered within the range.

New Section

The speaker discusses market correlation and how it can influence trading decisions.

Market Correlation

  • The speaker mentions the correlation between markets and how they usually move together. They refer to a potential trade idea based on the Nasdaq's willingness to go down and reach a specific level.
  • The concept of "six sister theory" is briefly mentioned, suggesting that closely correlated markets can provide insights into each other's movements.

New Section

The speaker discusses the challenge of holding on to big trades and the impact of public scrutiny on traders' ability to be comfortable.

Holding on to Big Trades

  • Traders often struggle with holding on to big trades due to discomfort and fear.
  • Public scrutiny can have a significant impact on traders' ability to be comfortable with their trades.
  • The fear of missing out, getting stopped out, or losing a trade can be managed by following suggested strategies.
  • Holding multiple contracts and leaving one on can provide more experience and potentially lead to larger profitable exits.

New Section

The speaker expresses frustration with traders who complain about not being able to hold on to big wins when they are capable of doing so.

Overcoming Discomfort

  • Traders need to find ways to be comfortable in their own skin while trading.
  • Placing too much weight on achieving astronomical returns can make success seem impossible.
  • Gradual progress is key, starting with staying break even, then working towards profitability through small base hits.
  • Stretching oneself gradually by increasing leverage can lead to growth and progress.

New Section

The speaker emphasizes the importance of listening and following suggested rules in order for traders to grow and progress.

Learning from Mistakes

  • Making mistakes is part of the learning process in trading.
  • Journaling trades helps measure real progress and avoid spinning wheels.
  • Taking profits or payouts without a genuine increase in understanding hinders long-term development as a trader.

New Section

The speaker shares an example involving their son's trading journey as an illustration of progress and the importance of following rules consistently.

Consistency and Growth

  • Following rules consistently is crucial for progress and growth as a trader.
  • Gradually increasing the number of days following rules helps build discipline and understanding.
  • Real learning occurs when traders push themselves out of their comfort zones.

New Section

The speaker emphasizes the need for traders to have a genuine increase in understanding and ability to speculate in markets.

Genuine Progress

  • Profiting from past experiences is not enough; there must be a real increase in understanding and ability.
  • Speculating in markets requires continuous learning and improvement.
  • Avoiding unrealistic expectations and focusing on gradual progress is essential.

New Section

The speaker concludes by highlighting the importance of seeking knowledge and dismissing ignorance regarding trading.

Seeking Knowledge

  • It is important to seek knowledge about trading rather than dismissing it.
  • Ignorance can hinder growth and success as a trader.
  • Continuous learning, following rules, and embracing discomfort are key elements for progress.

Pressing into Discomfort

The speaker emphasizes the importance of pushing through discomfort in order to grow and improve.

Pressing into Discomfort

  • It is important to press into discomfort in order to overcome challenges and achieve personal growth.

Setting Up for Trading Opportunities

The speaker discusses setting up for trading opportunities and shares insights on market structure.

Overnight Break Setup

  • Expect a run in the market tomorrow morning.
  • Look for a setup that allows running up into it or breaking shift in market structure at fair value gap. Short that setup and aim for the subsequent low.

Simplifying Market Analysis

  • Understanding every single candle formation is not necessary.
  • Identify setups based on likely draw on liquidity on higher time frames.
  • Determine if the weekly chart will reach a higher or lower level, whether it's inefficiency or stops, and trade accordingly.

Silver Bullet Models

  • Between 10 AM and 11 AM New York local time, there is a silver bullet model for trading.
  • Similar silver bullet models exist between 2 PM - 3 PM, 3 AM - 4 AM (London session), and 7 AM - 8:30 AM (optional).

Analyzing NASDAQ on Weekly Chart

The speaker analyzes the NASDAQ on the weekly chart and discusses its potential future movements.

NASDAQ Weekly Chart Analysis

  • The speaker apologizes for missing content due to accidental deletion by their son.
  • There are relative equal lows indicating an inefficiency that could lead to further downward movement in NASDAQ.

SMT Divergence and Bias

  • SMT (Smart Money Technique) Divergence is a tool for reading cracks and correlation in the market.
  • NASDAQ has not gone lower like the S&P, indicating a bearish bias.
  • The speaker emphasizes the importance of experience in understanding the difference between SMT and "sick sister" divergence.

Addressing Questions and Experience

The speaker addresses questions about their analysis approach and emphasizes the importance of experience in developing trading skills.

Addressing Viewer Questions

  • The speaker acknowledges receiving questions but explains that they cannot address all of them immediately.
  • Explains the difference between SMT divergence and "sick sister" divergence based on experience.

Importance of Experience

  • Emphasizes that acquiring real skill sets through experience takes time.
  • Urges viewers to focus on developing skills rather than seeking overnight success or relying on luck.

These are the main points covered in the transcript, organized by section headings and bullet points with corresponding timestamps.

Desensitizing Yourself from Fear in Trading

In this section, the speaker discusses the importance of desensitizing oneself from fear when trading and shares insights on how to do so.

Desensitizing Yourself from Fear

  • The speaker emphasizes the need to desensitize oneself from fear when trading.
  • When trading as a fair value trader, it is necessary to sell short even when the market is going up. This requires overcoming the fear associated with selling short.
  • Patience is key in waiting for fair value gap entries and stop hunts that align with one's trading strategy.
  • Going against the current price direction requires trust in one's analysis and belief that it will move in the desired direction.
  • Tape reading, which involves observing price action in real-time, helps desensitize oneself from fear by focusing on price delivery rather than external factors like level two data or order books.

Understanding Price Action and Market Manipulation

In this section, the speaker explains the importance of understanding price action and market manipulation for successful trading.

Price Action and Market Manipulation

  • Understanding how price delivers at specific times of day can help identify inefficiencies or liquidity pools above or below the market.
  • Price action provides valuable information about market manipulation and inefficiencies.
  • The speaker highlights that patterns are not reliable indicators; instead, focus on how price behaves within specific timeframes.
  • Analyzing back-and-forth movements in price can reveal important levels and reactions to them.
  • The recent rally is not solely due to short covering but rather a result of anticipated levels being reached.

The Rigged Nature of Trading

In this section, the speaker discusses their perspective on trading being rigged and emphasizes understanding market dynamics for consistent success.

The Rigged Nature of Trading

  • The speaker asserts that trading is rigged and operates like a predetermined algorithm.
  • Understanding the time of day, week, month, and year, along with their interrelationships, helps predict market movements.
  • The speaker shares their ability to accurately predict market moves based on these factors.
  • They encourage traders to avoid herd mentality and learn to see beyond common narratives like short covering rallies.
  • Consistent success in trading requires effort, time, and a deep understanding of market dynamics.

Identifying Opportunities and Liquidity

In this section, the speaker discusses identifying opportunities and driving into liquidity for successful trading.

Identifying Opportunities and Liquidity

  • Traders should aim to drive into inefficiencies or liquidity areas like a bulldozer rather than simply buying at support or selling at resistance levels.
  • Liquidity adds are not indicative of support or resistance; instead, they represent targets to be reached and surpassed.
  • The speaker mentions their approach of waiting for one-sided opportunities before sharing predictions on social media or other platforms.
  • Students who have learned from the speaker's teachings have achieved significant profitability but acknowledge that trading requires effort and time investment.

Timestamps may vary slightly due to differences in transcription.

The Market's Ups and Downs

This section discusses the volatility of the market and its fluctuations.

Understanding Market Volatility

  • Market fluctuations are a common occurrence.
  • Investors should be prepared for both ups and downs in the market.
  • Volatility can present opportunities for investors to buy low and sell high.

Factors Influencing Market Fluctuations

  • Various factors contribute to market volatility, such as economic indicators, geopolitical events, and investor sentiment.
  • Economic indicators include GDP growth, inflation rates, and employment data.
  • Geopolitical events like trade wars or political instability can impact market stability.
  • Investor sentiment plays a significant role in market movements. Positive or negative news can influence investor behavior.

Strategies for Dealing with Market Volatility

  • Diversification is key to managing risk during volatile periods. Spreading investments across different asset classes can help mitigate losses.
  • Long-term investing focuses on riding out short-term market fluctuations. It emphasizes the importance of staying invested over time.
  • Dollar-cost averaging involves regularly investing a fixed amount regardless of market conditions. This strategy reduces the impact of short-term price fluctuations.

Conclusion

Market volatility is an inherent part of investing. Understanding its causes and implementing strategies to manage risk can help investors navigate through ups and downs in the market effectively.

Timestamps have been associated with relevant bullet points to facilitate studying the transcript.

Video description

Government Required Risk Disclaimer and Disclosure Statement 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.