January 2017 ICT Mentorship: Lesson 1.1 Implementing Macro Analysis

Jul 12, 2024

January 2017 ICT Mentorship: Lesson 1.1 Implementing Macro Analysis 📈

Introduction

  • Focus: Macro analysis, quarterly shifts, and IPTA (Interbank Price Delivery Algorithm) data ranges.
  • Objective: Teach methods for understanding and forecasting market movements using non-random aspects of price delivery.
  • Application: Primarily for Forex, but principles apply universally.

Market Efficiency

  • Markets are believed to be non-random and controlled by algorithms at the Central Bank level.
  • Precise Forecasts: If markets were random, precise forecasts wouldn't be possible.
  • Controlled Markets: Ability to call specific price levels argues against market randomness.

Quarterly Market Shifts

  • Key Concept: Markets have structural shifts every three to four months.
  • Indicator: Shift generates new interest and changes in market direction.
  • Application: Assessing price on monthly, weekly, and daily time frames helps anticipate intermediate swings.

Anchoring Market Structure

  • Focus: Monthly, weekly, and daily charts to capture market structure and changes.
  • Example: Market may change direction leading to consolidations or retracements.

Smart Money Concepts

  • Accumulation for Buy Programs: Expect series of up days forming higher highs (liquidity focus).
  • Distribution for Sell Programs: Expect series of down days forming lower lows (liquidity focus).
  • Benchmark vs. Underlying: Analysis of price action between a reference benchmark (e.g., Dollar Index) and the asset being traded.

IPTA Data Ranges

  • 60, 40, and 20 Trading Days: Look back these intervals to identify institutional order flow and price levels.
  • Indicator: Highlight significant highs/lows for trend analysis.
  • Application: Provides a framework to project future price movements and shifts.

Example Analysis

  • December 1, 2015 to March 1, 2016: Analyzing Dollar Index showed liquidity shifts and bearish market structure breaks.
  • Euro Dollar Correlation: Showing inverse relationship relative to dollar movements.

Cast Forward

  • Projection: Anticipate market shifts within the next 20, 40, or 60 trading days.
  • Example: Dollar Index vs. Euro Dollar shifts analyzed to predict trends.

Summary

  • Quarterly Analysis: Helps frame and understand market movements within three-month intervals.
  • Calibration: Use prior month's monthly data as a reference point for analysis.
  • Practical Application: Combine this analysis with other tools and conditions taught throughout the mentorship.

Homework

  • Chart Analysis: Implement and practice the quarterly shift analysis on personal charts.
  • Identify Trends: Recognize and calibrate market shifts based on IPTA data ranges.

This lesson provides a foundation for understanding and leveraging quarterly market shifts and IPTA data ranges for better trading decisions. More detailed tools and methodologies will be covered in future sessions.