ICT Mentorship Series - Equilibrium vs. Premium

Introduction

• This session is part of the ICT Mentorship series, focusing on understanding equilibrium versus premium.
• Previous session covered equilibrium vs. discount; this session focuses on premium.

Key Concepts

Equilibrium vs. Premium

• Equilibrium: A market's price is at the 50% Fibonacci level between a defined high and low.
• Premium: A market's price is above the 50% level, indicating the price is high relative to its range.

Impulse Price Swings

• An impulse price swing consists of several smaller swings forming a larger movement.
• Important to identify these swings to set ranges for analysis.

Using Fibonacci

• Draw Fibonacci from a high to a low to determine potential retracement levels.
• Key Levels: 62% and 79% retracement levels are optimal for trade entries.
• A market is in premium if it moves above the 50% Fibonacci level.

Trading Strategy

Identifying Premium Markets

• Look for price action above the 50% level to identify a premium market.
• Aim to sell in premium conditions.

Price Action and Swing Analysis

• Sell when prices are above equilibrium (above 50% Fibonacci level).
• Missed opportunities occur when prices reach equilibrium but do not move to premium.

Turtle Soup Strategy

• When a market runs stops above a previous high in a premium, it's a "turtle soup" sell.
• Profits are taken below old lows.

Practical Example

• Using daily charts to apply these strategies can yield significant trades without the need for intraday actions.
• Look for clear, discernible swings to define range and trade setups.

Important Considerations

• Always trade within ranges; you don't need to break out of ranges to profit.
• Selling at a premium aligns with the idea of selling something at a high price.
• Using higher time frames (like daily charts) helps those who can't trade intraday.

Conclusion

• This lecture emphasized the importance of understanding market states and using Fibonacci retracement levels effectively.
• The strategies discussed are applicable across different time frames and market conditions.