ICT Mentorship - January 2017 Lesson 1.1
Introduction
- Focus: Implementing macro analysis using quarterly shifts and EPTA data ranges.
- Objective: Understand if markets are truly random or controlled through algorithms.
- Belief: Markets are engineered with price delivery algorithms, particularly in Forex.
Market Randomness vs. Control
- If markets were random, predicting them reliably would be impossible.
- ICT belief: Markets are 100% engineered, controlled to the pip.
- Ability to predict specific price levels suggests non-randomness.
Understanding Quarterly Market Shifts
- Occur in all asset classes, not just Forex.
- Every 3-4 months, market structure shifts to generate new trader interest.
- Important to analyze markets on a macro level (monthly, weekly, daily).
EPTA Data Ranges
- Algorithmic price delivery is controlled within data ranges.
- Central banks set prices and allow movements within predefined daily ranges.
Quarterly Shifts and Market Structure
- Market shifts approximately every three months, influencing directional bias.
- Use macro-level analysis to anticipate intermediate price swings.
- Understand these shifts to better manage long-term trades.
Identifying Market Structure Shifts
- Look back 60, 40, and 20 trading days to identify institutional order flow.
- Identify significant highs and lows as liquidity reference points.
- Use these to predict future market movements and structure shifts.
Smart Money Concepts
- Buy Programs: Successive days of buying, seen across multiple time frames.
- Sell Programs: Successive days of selling, using opposite criteria.
- Manipulation seen in the relationship between underlying asset and benchmark.
Practical Application: Forex
- Analyze underlying currency vs. benchmark for signs of manipulation.
- Use examples like Dollar Index vs. Euro/USD for practical insights.
- Apply this understanding across commodities, stocks, and interest rates.
Practical Steps
- Look Back: Analyze past data ranges (60, 40, 20 days) for market direction.
- Identify Liquidity: Find institutional reference points (highs/lows).
- Cast Forward: Predict next market shift within 20-60 trading days.
Example Analysis
- Dollar Index and Euro/USD analysis for 2015-2016.
- Use of vertical lines to delineate market shifts and project trading ranges.
- Expectation of market behavior based on historical data and smart money accumulation.
Conclusion
- Markets have predictable patterns through engineered price algorithms.
- Quarterly shifts offer a framework for anticipating market changes.
- Combine macro analysis with smart money strategies for effective trading.
Note: Further examples and insights will be provided throughout January's content.