ICT Forex Scout Sniper Basic Field Guide - Vol. 2

Name: ICT Forex Scout Sniper Basic Field Guide - Vol. 2
Uploaded: 2017-12-25T02:55:08.000Z
Duration: 3 h 6 min 12 s
Description: There is Risk in trading Forex. This video is meant to inspire effective practice in Demo account.

# Introduction

The speaker introduces the topic of the ICT scout sniper field training guide and what will be covered in this episode.

Boot Camp

The episode covers various topics including reviewing previous assignments, institutional orders, market makers business model, price swing characteristics, price fractals and their role in analysis.

A daily screen capture of the euro USD pair is shown to highlight a swing in price that will be analyzed later in the episode.

Homework assignment on price reactions is given.

# Analyzing Price Swings

The speaker analyzes a specific price swing using generic concepts that apply to smart money trading.

Price Rally Analysis

A 15-minute time frame is used to analyze a price rally.

Smart money concepts are applied to this time frame based on higher time frames where institutional level traders and banking traders do their analysis.

The highest point of the analyzed price swing is shown on a daily chart of the fiber euro USD pair. Turning points and levels of support are identified through candlestick patterns.

# Conclusion

The speaker concludes by emphasizing how applying generic concepts from smart money trading can help with analyzing reoccurring themes in price action across different currency pairs.

Key Takeaways

Applying generic concepts from smart money trading can help with analyzing reoccurring themes in price action across different currency pairs.

Candlestick patterns can be used to identify turning points and levels of support.

Major Price Reactions and Levels

This section covers the major price reactions and levels that traders should be hunting for in their future trades.

Key Points:

Price rallies off a level, comes back down, and makes a smaller short-term swing lower.

Traders should look for areas where they would expect to see price stall as it moves lower.

A swing high is a high that has a lower high on either side of it.

Institutions like to use large round numbers as support/resistance levels.

Trading Development

This section discusses how traders can develop their skills by observing price movements.

Key Points:

When price bounces off a level, traders should look for consolidation at that same point.

If price fails to reach the same old low or support level, it may have found a new level of consolidation.

Traders should observe swing highs and lows to identify potential support/resistance levels.

Identifying Support/Resistance Levels

This section explains how traders can identify key support/resistance levels using swing highs and lows.

Key Points:

Traders can use swing highs and lows to identify key support/resistance levels.

Institutional trading revolves around round numbers, so traders should pay attention to these levels when identifying potential support/resistance areas.

Bullish candles indicate potential buying opportunities, while bearish candles indicate potential selling opportunities.

Institutional Level Trading

This section delves into institutional level trading and how traders can use this knowledge to their advantage.

Key Points:

Institutions like to use large round numbers as key support/resistance levels.

Traders should look for potential selling opportunities at levels where price has bounced before.

Traders can use institutional level trading to identify key support/resistance levels and potential setups.

Understanding Key Support/Resistance Levels

This section provides a deeper understanding of how traders can identify key support/resistance levels.

Key Points:

Price bounces off swing highs and lows, indicating potential support/resistance areas.

Institutional level trading revolves around round numbers, so traders should pay attention to these levels when identifying potential support/resistance areas.

Traders can use bullish and bearish candles to identify potential buying/selling opportunities.

Understanding Price Action

In this section, the speaker discusses how to build a fundamental base of price action and how to expand on it in each episode. He emphasizes the importance of taking notes and going through the video module multiple times.

Building a Fundamental Base of Price Action

The daily chart is useful for highlighting areas of potential setups or bounces.

The framework should not be based solely on getting weekly highs or lows or making large profits.

By studying price action, traders can impress themselves and start seeing less informed traders who have no idea what they are talking about.

Taking notes while watching videos helps to remember specific concepts and details.

Analyzing Price Movement on Daily Charts

Consistently successful traders do most of their analysis on higher time frames such as daily, four-hour, and one hour charts.

It's advisable to spend more time analyzing daily and four-hour charts because that's where institutional level traders operate.

Slow movement is good because it allows traders to learn what dominant players are doing on larger timeframes.

Large dominant players move prices up or down from certain levels.

Importance of Learning from Dominant Players

Retail traders cannot move markets but can influence them slightly in the short term.

Smart money entities take prices up or down from certain levels, so learning what they do is crucial for success in trading.

# The Importance of Studying Price Action

In this section, the speaker emphasizes the importance of studying price action and how it can help traders become better at making trade decisions.

Why Study Price Action?

Spending time studying price action can activate your reticular activating system, allowing you to recognize patterns and make more informed trade decisions.

By understanding what price has done in the past, traders can anticipate similar reactions when price reaches certain levels.

Studying price action helps traders develop a greater grasp on what is happening in the market and apply concepts from their toolbox to make better trade decisions.

# Using Past Levels to Anticipate Future Reactions

In this section, the speaker uses an example chart to demonstrate how past levels can be used to anticipate future reactions.

Example Chart Analysis

As price moves lower towards a previous level , we can expect pauses and bounces.

When price reaches a previous level , we anticipate a similar reaction based on what institutions have done in the past.

While there is no guarantee that history will repeat itself, using stop-loss orders and sound risk management models can help shield against losses.

# Clearing Up Trading Fog with Higher Time Frame Charts

In this section, the speaker discusses how higher time frame charts can help clear up confusion for new traders.

Benefits of Higher Time Frame Charts

Looking at higher time frame charts can lift some of the fog for new traders who may be struggling to understand what they are seeing.

By analyzing the price moves from a previous level on a higher time frame chart, traders can gain a better understanding of what to expect in the future.

While it's important to have realistic expectations and not expect huge gains every week, consistently applying analysis techniques with a large sample size can lead to more positive than negative outcomes.

Trading Expectations and Cherry Setups

In this section, the speaker talks about how new traders have high expectations and believe that understanding price action will lead to more trading opportunities. However, seasoned traders understand that it's not about how many trades you take but the quality of the trades you take. The speaker emphasizes the importance of finding cherry setups and not spending too much time trading.

Seasoned Pro with Low Expectations

As a seasoned pro with almost two decades of experience, the speaker doesn't have high-level expectations like new traders.

Understanding price action doesn't mean you should be spending more time trading.

The goal is to find cherry setups that allow you to pull out when it's highly stacked in your favor.

Price Action Understanding

The speaker has a good feel for what price is trying to do on any market and any timeframe.

You can start trading more in terms of leverage once you understand price action concepts better.

Don't Trade All the Time

Life is out there, and it's essential to be a part of it.

New traders turn on charts simply because they sat down after work; this approach doesn't work.

Finding Cherry Setups

Trust specific entry points that will aid us in support resistance.

It's not about capturing every single major high and low; we want trading opportunities.

Look for other specific price points that will aid us in support resistance.

Using Old Highs and Lows as Support Resistance Levels

In this section, the speaker talks about using old highs and lows as support resistance levels. He explains how these levels change roles over time based on market activity around them.

Arriving at Support Resistance Levels

We can arrive at support resistance levels based on old highs and lows.

Use the daily timeframe to identify these levels.

Sensitivity of Support Resistance Levels

Price moves away from support resistance levels, making them sensitive.

Institutions are doing significant dealings around these levels.

Changing Roles of Support Resistance Levels

A level that was support can invert and become resistance.

The same level can change roles again and act as support.

Trading Opportunities

Look for buying opportunities when price retraces after moving away from a support level.

Don't just look at individual highs or lows; consider the range between them.

Finding Trading Opportunities in Price Swings

In this section, the speaker talks about finding trading opportunities in price swings. He explains how to use specific price points to aid in identifying support resistance levels and how to trust entry points that will aid us in taking quality trades.

Specific Price Points for Support Resistance

Use specific price points to aid us in identifying support resistance levels.

Consider both highs and lows until price gets to those levels.

Quality Trades over Quantity

It's not about how many trades you take but the quality of the trades you take.

Don't chase systems or trade all the time; find cherry setups.

Trading Opportunities in Price Swings

There are trading opportunities within a single price swing.

Trust entry points that will aid us in taking quality trades.

# Understanding Price Action

In this section, the speaker discusses how to study price action and discern where institutions and large traders are more likely to move the market.

Studying Price Action

The speaker asks viewers to study what price was doing from July 1st to July 9th.

Price was moving down aggressively off the 130.60 level that was noted.

By studying higher time frames, we can discern where institutions and large traders are more apt to muscle the price of a particular market one direction or the other.

Smart Money vs Retail Traders

Institutions put big orders through but they don't put all of their orders in at one time. They have to work that order in because they're moving massive blocks of price orders.

Smart money is on an institutional level and moves massive blocks of price orders. As retail traders, we make small little minor blips in the market.

When smart money gets involved, there's a large displacement of water in the pool (market). They cannot hide it.

Trading Levels

When smart money trades up to a certain level (e.g., 130.60), it's trading off it, then trades through it again before trading off again. This is a tell-tale sign that somebody on a larger perspective is now getting involved with this market.

Smart money will sell a little bit at a time until they can put their last bit of trade on by stacking their orders all around that level (e.g., 130.60).

# Understanding Market Structure and Dynamics

In this section, the speaker discusses how market liquidity affects price action and how traders can use this knowledge to their advantage.

Liquidity and Price Action

Large blocks of orders limit liquidity, making it difficult for traders to get their orders filled.

Traders will put small blocks to establish a net short position once they have established the overall average price they want.

Once the net selling is established, there will not be any more buyers for the other side of their trade. This creates a heaviness in the marketplace that takes a larger toll on price action.

Every little rally in here will be new selling opportunities.

Psychology Behind Price Action

Traders often chase rallies without understanding the psychology behind price action.

Rapidly moving price to a specific price point where key levels are located is an important aspect of understanding market structure and dynamics.

If you can't grasp these concepts, consistent levels of success will evade you.

Key Levels

Start on higher time frame charts and find key levels that are obvious because if they're obvious, it takes all the guesswork out.

The main focal point is the higher time frame key level at 130.60 level.

Patience is Key

It may take some patience on your part but spending time understanding these ideas that work in here will make you far greater as a price action trader than learning from books or on your own.

# Understanding Higher Time Frame Support and Resistance

In this section, the speaker explains how to identify higher time frame support and resistance levels and how they affect price movements.

Identifying Higher Time Frame Levels

There are two levels of support based on a hard time frame.

Between these two levels, there is not much in terms of higher time frame support.

Intermediate term swing lows cause pauses in the marketplace.

The focus should be on training the eye to see intermediate term price swings.

Introduction to Time of Day

Specific areas where price made significant highs and lows are highlighted with arrows.

The chart is broken down into time and day of the week.

Double lines represent Sunday, vertical lines represent trading for that week from Monday to Friday.

Bearish Market Environments

In bearish market environments, expect the high of the week to form by Tuesday's London open.

If you have a bearish expectation in the market place, expect the high that we deform by Tuesday's long and open or Wednesday's London open at the very latest.

Markets trading softer and moving lower based on higher time frames determine key support resistance and bias.

Conclusion

A range of 291 pips exists between two higher timeframe levels.

By studying higher timeframe charts, traders can better understand directional bias.

# Trading off a Swing Low

In this section, the speaker discusses trading off a swing low and how to identify key levels for selling opportunities.

Identifying Key Levels for Selling Opportunities

Price trades up to a sensitive level, which is a nice swing low going into a key level.

The speaker assumes that someone out there in the retail world assumed that level was probably a good area to buy.

As price trades down and starts to have these bounces, it does not mean that it will trade higher and become an opportunity for buying.

Price rallies up consolidates and finds old support. Dealers hold price here and allow orders to stack up.

Trading Off Swing Lows

When traders buy at the swing low, their stop-loss would be right below that point.

Price is driven lower where liquidity is going to be found.

Short-term swing lows are used as selling opportunities by smart money who put in more orders.

# Using 15-Minute Chart Timeframe

In this section, the speaker explains why he uses the 15-minute chart timeframe when trading.

Importance of 15-Minute Chart Timeframe

Trade setups really form on this timeframe.

The speaker uses the 15-minute chart timeframe because it keeps continuity going.

# Protecting Positions with Old High Levels

In this section, the speaker discusses how traders protect their positions using old high levels.

Protecting Positions with Old High Levels

Traders use old high levels to protect their positions even if they are selling at lower levels.

The speaker explains that traders who sell at the old high level will use it as a stop-loss.

Understanding Institutional Trading

In this section, the speaker explains how institutional traders manipulate the market and how to identify their trading patterns.

Institutional Trading Strategies

Institutional traders use buy stops to drive up prices and sell to retail traders.

They liquidate their short positions at specific price levels, causing price drops.

Session openings and closings are key turning points for institutional traders.

The speaker calls these turning points "kill zones" and uses them as a means of adopting a sniper mindset in trading.

Fractals in Price Action

In this section, the speaker discusses fractals in price action and how they can be used to identify trends.

Identifying Trends with Fractals

Fractals are patterns that repeat themselves on different time frames.

By identifying fractal patterns, traders can determine whether a trend is likely to continue or reverse.

The speaker provides an example of using fractals to identify a bullish trend on a 15-minute chart.

Understanding Price Structure

In this section, the speaker explains that there is a specific overall price structure that can be observed in charts. This concept will not be fully explained in one video, but with time spent observing charts, traders can start seeing these patterns repeat over and over again.

Key Points:

The price trades off of a level of support.

Traders should trade with their eyes and gut feeling.

It takes time to get accustomed to seeing the patterns repeat themselves.

Observing the charts repeatedly helps traders understand the overall price structure.

Stair-stepping Environment

In this section, the speaker discusses how price moves higher after finding support at a short-term support level. He also talks about how traders cannot expect to see what's going to transpire next without having any idea what the higher time frames are doing.

Key Points:

Price rallies off a significant level of support at 132 figures.

Price comes back down and trades into 130 to 130 levels before bouncing and running through creating a short-term support level.

As price moves higher, it creates a stair-stepping environment.

Traders cannot expect to see what's going to happen next without knowing what the higher time frames are doing.

Trading Opportunities

In this section, the speaker talks about capturing trading opportunities when prices find support. He introduces his own optimal trade entry method which involves using Fibonacci retracement levels.

Key Points:

Traders can capture trading opportunities when prices find support.

The optimal trade entry method involves using Fibonacci retracement levels such as 262 percent or 707 trace event level or his own level seventy point five which is between the sixty-two and seventy percent rates.

These levels have a consistent level of reaction in price when they are hunted.

The speaker gives examples of how traders can use this price structure to identify signals.

Large Range Bar

In this section, the speaker talks about large range bars and how they do not usually work both sides of the opening candle. He also discusses how traders can be buyers on one weakness with an understanding or a level of confidence that if it is a bullish week and it trades slower, they could find support.

Key Points:

Large candles on any timeframe do not usually work both sides of the opening candle very much.

If traders are bullish, they can reasonably expect to see any decline be very modest.

Traders can be buyers on one weakness with an understanding or a level of confidence that if it is a bullish week and it trades slower, they could find support.

# Understanding Timeframes and Support/Resistance Levels

The speaker discusses the importance of understanding timeframes and support/resistance levels in trading.

Key Points:

Trend, directional bias, and key support/resistance levels are inherent to specific time frames (daily, 4-hour, 1-hour). These levels are static and very powerful.

Never take a trade without having a key support or resistance level from the daily, 4-hour, or 1-hour chart. This will force patience which is a learned characteristic of good trading.

Applying hard time frames for resistance levels will force traders to wait for opportunities. This is a good thing as it helps develop patience.

Patience is not something that can be learned by simply reading about it. It must be developed through experience.

# Using Fibonacci Retracements

The speaker introduces Fibonacci retracements as a tool for identifying buying opportunities.

Key Points:

A short-term high and swing lows indicate that the 132 big figure level is being worked.

Pulling a fib from this level shows that the 62% level is acting as support.

There's confluence of support at the mid-figure level .

Once an old high becomes broken through its role becomes inverted and acts as support.

# Understanding Support and Resistance Levels

In this section, the speaker explains how to identify support and resistance levels using Fibonacci retracements.

Identifying Key Levels

The 70.5 level is a key support and resistance level.

Look for the lowest low of a candle to identify support levels.

Identify session highs and lows to determine price ranges.

Use higher time frames to avoid gambling with trades.

Using Fibonacci Retracements

Overlapping Fibonacci retracements can indicate strong support or resistance levels.

When market structure breaks down, use Fibonacci retracements to find selling opportunities.

Consolidation around a specific level can indicate potential trading opportunities.

# Identifying Key Levels

In this section, the speaker identifies key levels in the market and explains how to use them to make trading decisions.

Highlighting Key Level 134

The speaker highlights the key level of 134 on a chart.

This level was previously tested and held as resistance.

The speaker suggests that price may pause or reverse at this level.

Using Higher Timeframes to Confirm Key Levels

The speaker looks at a higher timeframe chart to confirm the importance of the key level.

He notes that there are multiple highs and lows around this level, indicating its significance.

Identifying Support Level 132.10

The speaker identifies a support level at 132.10 on a chart.

He explains that this is an important level that has been relevant for weeks.

Price spends time consolidating around this level before bouncing off it, confirming its importance as support.

# Market Maker Business Model

In this section, the speaker discusses the market maker business model and how it affects price movements.

Price Structure in Market Maker Business Model

The speaker describes the typical price structure in the market maker business model: consolidation, rally, retracement, leg up, pause, leg up, reversal with failure swing.

He notes that there are two legs up and two legs down with a reactionary high formed in between them.

Accumulation and Distribution by Market Makers

The speaker explains that market makers accumulate long positions during consolidation and rally prices up.

They then distribute their positions as price rallies, selling to buyers who are expecting the trend to continue.

Trendlines in Market Maker Business Model

The speaker notes that trendlines can be used by traders to identify potential buying or selling opportunities.

However, he cautions against relying too heavily on them as they can be easily broken by market maker activity.

# Understanding Market Structure

In this section, the speaker discusses market structure and how to use it to identify potential trading opportunities.

Identifying Market Structure

The market tends to follow a repeating pattern of consolidation, rally, consolidation, rally, and reversal.

To understand what price is trying to do, traders need to key off support and resistance levels as well as time of day and day of the week.

An advanced approach involves applying time analysis in addition to support and resistance levels.

Trading Based on Market Structure

Traders should not blindly assume that a bullish week will result in a low forming on Monday or Tuesday. Instead, they should look for confluences of support and resistance with a bias in mind.

If price continues to move higher after forming a swing low, it could potentially become a nice turning point. However, traders should look for confluences of supporting resistance before making any trades.

Consistently applying the mindset of identifying market structure can help traders find consistency in their trading.