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ICT 2024 Mentorship \ News Release Tape Reading \ October 17, 2024
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ICT 2024 Mentorship \ News Release Tape Reading \ October 17, 2024

Market Overview and News Drivers

Introduction

  • The speaker greets the audience and checks audio quality.
  • Acknowledges medium and high impact news drivers for the day, emphasizing the importance of discussing them live due to personal scheduling conflicts.

Key Economic Indicators

  • Highlights core retail sales, unemployment claims, and Philly Fed Manufacturing Index as significant reports releasing at 8:30 AM on October 17th.
  • Mentions crude oil inventory data set to be released at 11 AM, indicating its relevance for traders in that market.

Market Sentiment and Trading Strategy

  • Plans to conclude the stream by 9 AM but will analyze market reactions post-news release around 8:30 AM.
  • Notes potential volatility in Forex markets, particularly with GBP retail sales expected during London’s early trading session.

Technical Analysis of NASDAQ

Chart Observations

  • Begins analysis of NASDAQ using daily charts while dismissing irrelevant past data.
  • Identifies sell-side pressure beneath buy-side levels; marks Tuesday's high for reference.

Anticipated Price Movements

  • Suggests a possible upward movement towards specific price points (640, 659.84, and 680), indicating a bullish outlook despite current market conditions.

Market Dynamics During Election Year

  • Discusses challenges in shorting the market during an election year due to artificial price inflation tendencies.
  • Emphasizes focusing on buying opportunities rather than short positions given historical patterns observed during presidential years.

Impact of News Releases on Market Behavior

News as a Market Driver

  • Expresses interest in how high-impact news releases can influence liquidity runs or create bearish sentiment before reversing at opening bell.

Intraday Volatility Considerations

  • Advises caution when interpreting economic data releases; suggests they often serve as smoke screens rather than reliable indicators of future movements.

Final Thoughts Before Closing Remarks

Understanding Market Behavior and Trading Strategies

Trusting Price Action Over Data

  • The speaker emphasizes the importance of trusting price action rather than relying solely on data, noting that market behavior often contradicts data predictions.
  • They share their personal experience from the 90s, highlighting a shift in focus towards price as the primary indicator for trading decisions.

Daily Routine and Market Analysis

  • The speaker discusses their unconventional sleep schedule, which allows them to analyze markets during different sessions without typical fatigue.
  • They recount waking up during the London session and observing market movements, indicating a proactive approach to trading.

Identifying Market Patterns

  • The discussion includes recognizing false breakouts in the market, particularly during an election year, which can mislead traders into taking long positions.
  • The speaker describes waiting for opportunities to enter trades when prices drop into discount areas after liquidity runs.

Technical Analysis Insights

  • They explain concepts like fair value gaps and volume imbalances while analyzing short-term charts, emphasizing their significance in identifying potential trade setups.
  • Acknowledging challenges with visual clarity at older age, they express how this affects real-time chart annotations but remain focused on delivering insights.

Trade Execution and Strategy

  • The speaker details entering trades based on specific setups within propulsion blocks and fair value gaps while managing risk through strategic exits.

Market Analysis and Trading Strategies

Anticipating Market Movements Before Opening

  • The speaker expresses a bullish bias while preparing for market opening at 9:30 AM, noting the influence of multiple reports on market behavior.
  • Emphasizes the importance of patience during initial market reactions to news, suggesting that multiple reports can lead to staggered rallies or declines.
  • Discusses identifying key levels for buying and selling, highlighting the significance of price action around lows and indecisive candles.

Understanding Volume Imbalances

  • Introduces the concept of fair value gaps and volume imbalances, explaining how they can indicate potential trading opportunities.
  • Advises using the lowest open and close prices from candlesticks to frame imbalances accurately, enhancing trade precision.
  • Stresses the need to recognize inefficiencies in price movement due to volume imbalances and indecisive candles.

Short-Term Trading Expectations

  • Speculates on potential price movements leading up to 9:00 AM, considering scenarios where prices may fluctuate before making significant moves post-opening.
  • Outlines expectations for short-term lows being swept before a rally higher, emphasizing strategic entry points based on market behavior.

Navigating Market Manipulation

  • Highlights challenges in picking tops in bull markets, especially during election years when manipulation may occur.
  • Discusses observing relative equal highs as critical indicators while ignoring less relevant near-term highs for better liquidity analysis.

Analyzing High Impact News Effects

  • Notes that high-impact news drivers have not significantly influenced market range recently; caution is advised against impulsive buying decisions.

Market Analysis and Trading Strategy

Fair Value Gap and Market Entry

  • The speaker discusses the absence of a short entry despite identifying a fair value gap, indicating it will be used as a target later.
  • Emphasizes the importance of being positioned before high or medium impact news but notes no current opportunities for entry.

Observing Market Behavior

  • Mentions observing relative highs and the desire for price to stay below these levels to create bullish conditions.
  • Expresses preference for waiting rather than chasing trades, highlighting patience in trading strategy.

Price Action Analysis

  • Describes current market behavior as indecisive with spotty price action, characterized by wicks and volume imbalances without clear higher highs or lower lows.
  • Indicates that the market is in a holding pattern, suggesting that algorithms are not actively moving prices.

Manual Intervention Insights

  • Warns against entering trades during uncertain market conditions where manual intervention may distort price movements.
  • Advises traders to remain still and observe rather than act impulsively when faced with unclear market signals.

Learning from Market Dynamics

  • Highlights the importance of studying price action perception before engaging in live trading, emphasizing mentorship insights on algorithmic behavior.
  • Stresses that understanding manual interventions can provide an edge over conventional trading knowledge found in books.

Analyzing Relative Highs and Volume Imbalances

  • Discusses specific technical levels to watch, particularly relative equal highs, urging caution regarding minor fluctuations like wicks.

Understanding Volume Balance in Price Delivery

The Nature of Volume Balance

  • The volume balance is described as the most flexible price delivery (PD) array, indicating that it can fluctuate back and forth.
  • Context is crucial; just because a volume imbalance exists does not guarantee price will stop at that level. Observing how prices trade through these imbalances is essential.
  • A bullish body laid over a volume imbalance indicates potential upward movement, while a down-close candle suggests selling pressure.

Analyzing Candlestick Patterns

  • The relationship between candlestick bodies helps identify whether there’s buy-side or sell-side delivery within the volume imbalance.
  • Small amounts of price data may not be significant enough to base trading decisions solely on them; flexibility in interpretation is necessary.

Trading Strategies with Volume Imbalance

  • When observing price movements, traders should look for specific signatures that indicate how prices interact with volume imbalances.
  • A balanced price range emerges when both buy-side and sell-side deliveries are present, enhancing the significance of the volume imbalance.

Paint Roller Analogy

  • The paint roller analogy illustrates how initial price delivery can be efficient but may leave gaps if not managed properly.
  • As prices move up and down within a volume imbalance, they must efficiently cover all areas to avoid leaving "pockets" of unaddressed pricing.

Implications for Trading Decisions

  • Traders should monitor whether prices remain above or below key levels established by previous imbalances to inform their strategies.
  • Unlike fair value gaps, which require precision, volume imbalances allow for more flexibility in trading approaches due to their nature.

Positioning and Management Techniques

  • Using volume imbalances can help traders position themselves effectively based on market conditions and timing aspects.
  • Proper management techniques are vital when utilizing volume balances for entries or stop-loss placements to ensure effective risk management.

Liquidity Considerations

  • Current liquidity dynamics differ from earlier discussions about buy-side and sell-side deliveries; understanding this distinction is critical for effective trading strategies.
  • Efficient delivery between candlestick bodies creates significant support levels that can act as discount arrays for future trades.

Conclusion on Volume Balance Utility

  • Recognizing when a balanced price range has been established allows traders to treat it as support or resistance based on prior performance.

Understanding Volume Imbalances in Trading

The Nature of Volume Imbalances

  • The speaker emphasizes the importance of observing multiple instances of volume imbalances to fully grasp their significance, suggesting that a single example is insufficient for understanding.
  • A distinction is made between different types of volume balances; one type lacks any "bodies" (closed prices) above it, indicating a breakaway gap without residual selling or buying pressure.
  • The behavior of price traversing both sides within a single candlestick is contrasted with more traditional delivery methods, highlighting the nuances in market dynamics.

Misunderstandings and Education in Trading

  • The speaker expresses frustration over individuals monetizing educational content without fully comprehending the material, comparing it to someone believing they can perform surgery after watching a TV show.
  • This highlights the need for deeper understanding rather than surface-level knowledge when interpreting volume imbalances and their implications on price delivery.

Market Dynamics and Price Gaps

  • Discussion shifts to current market conditions, noting a significant gap relative to previous settlement prices and speculating on potential movements based on this context.
  • The speaker plays devil's advocate by considering scenarios where trading occurs above certain levels without immediate downward movement, which could influence trader sentiment.

Anticipating Market Movements

  • An analysis is presented regarding how market behavior might unfold if certain thresholds are crossed, particularly focusing on retail traders' reluctance to go long during specific opening bell scenarios.
  • There’s an expectation for minor upward swings before potentially dropping into discount territory as part of normal trading patterns.

Strategies Based on Opening Prices

  • Emphasis is placed on determining the opening range gap based on prior settlement prices and anticipating where price action may gravitate within the first 30 minutes post-opening.
  • If prices rise significantly before opening, there’s skepticism about whether they will drop back down to fill gaps; instead, upward momentum may continue from that point onward.

Conclusion: Interpreting Market Signals

  • Multiple scenarios are outlined regarding how traders should react based on real-time data at 9:30 AM.

Market Analysis and Opening Bell Strategies

Anticipating Market Movements

  • The speaker discusses the potential market range around 8:30, suggesting that if the price moves above 600 before 9:30, it could lead to a "Judas swing" between 600 and 660, followed by a sell-off towards gap closure.
  • Emphasizes the importance of preparing multiple scenarios for market behavior at 9:30, acknowledging uncertainty in actual price movements while encouraging listeners to review the recording for insights.

Building a Narrative Around Price Action

  • The speaker outlines their thought process leading up to the opening bell, considering possible interventions by market makers and how these actions might affect various participants in the market.
  • Acknowledges that while they have expectations for market direction ("going here here and here"), they do not believe it will be a straightforward path; there is an element of unpredictability involved.

Closing Remarks

Channel: The Inner Circle Trader
Video description

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