Mentorship Notes on Market Maker Strategies

Oct 12, 2024

ICT Mentorship: Sell Side of the Market Maker Models

Lecture on Price Action Model No. 7 Universal Trade Plan

Trade Plan Stages

  1. Preparation

    • Note all medium and high impact events for markets.
    • Study upcoming week's events and market structure.
    • Determine IPTA data ranges for past 20, 40, or 60 trading days.
    • Define current dealing range by noting highest and lowest prices within these ranges.

  2. Opportunity Discovery

    • Identify discount PD array below current market price.
    • Target the terminus at the discount PD array.
    • Focus on selling short in both market maker sell and buy models.

  3. Trade Planning

    • Look for convergence of manipulation and price opposite to trade bias during economic events.
    • Short premium fair value gaps during stage 1 or stage 2 redistributions.
    • Frame short entries in 15 or 5-minute premium fair value gaps.

  4. Trade Executions

    • Anticipate institutional order flow entry drills on 5-minute charts during key market sessions.
    • Use sell limit orders for entries.

  5. Trade Management

    • Set sell limit orders and define objectives for pips gain.
    • Manage trades using multiple orders to minimize risk.
    • Adjust stop loss based on percentage of expected objectives achieved.

Money Management

  • Use position size calculation:
    • Formula: Position Size = Account Equity x Risk Percent / Stop Loss in Pips
    • Adjust risk percent based on trade outcomes.
  • Reduce risk percent after multiple losses or wins.
  • Aim for a smooth equity curve, not a jagged one.

Market Analysis

  • Expect fast declines in sell-side market situations.
  • Recognize the potential of an exaggerated sell-off in second stage distribution.
  • Consider macroeconomic and geopolitical factors.
  • Differentiate between controlled demolitions and potential parabolic crashes.

Case Study: Energy Markets

  • Expect significant volatility in energy markets due to historical supply and demand scenarios.
  • Understand implications of market conditions like the 2020 crude oil negative pricing.
  • Prepare for possible parabolic price movements.

Trading Strategies

  • Identify market conditions for potential major moves.
  • Consider the overall economic climate.
  • Distinguish between different stages of market movements for effective risk management.

Conclusion

  • Review and practice with multiple sample sets.
  • Be aware of economic, political, and market climates.
  • Apply learned strategies to anticipate and manage market movements effectively.

Backtest and study further to gain proficiency in identifying and acting on these models effectively.