ICT Mentorship January 2017 Lesson 1.1: Quarterly Market Shifts and EPTA Data Ranges 📈

Introduction

• Presenter's belief: Markets are 100% engineered and controlled, particularly the Forex market.
• Topic of Lesson: Implementing macro analysis through quarterly shifts and EPTA (Electronic Primary Trade Authorization) data ranges.

Market Randomness vs. Engineered Market

• Hypothetical Question: If markets were entirely random, how could anyone have a trading edge?
• Presenter’s View: Markets are not random. They are precisely controlled, evident from the ability to forecast price levels to the pip.

Quarterly Market Shift

• Quarterly Market Shift: Markets exhibit a structure shift every 3-4 months.
• Applies universally across all asset classes, not just Forex.
• Purpose: Generate new market interest and urgency, which influences directional movements.

Macro-Level Analysis

• Always analyze price movements at monthly, weekly, and daily levels.
• Anticipate intermediate-term price swings for both uptrends and downtrends.
• Help long-term position traders manage positions better.

Smart Money and EPTA Data Ranges

• Smart Money: Observing and mimicking how institutional investors allocate funds and move in the market.
• Buy Programs: Periods where the market shows successive upward movements (hourly, daily, weekly, monthly charts).
• Sell Programs: Periods where the market shows successive downward movements.
• EPTA Data Ranges: Used to determine predefined price ranges that affect market movements.

Institutional Reference Points

• Look Back Method: Look back 60, 40, and 20 trading days from the first trading day of the most recent past month.
• Identify institutional reference points like order blocks, fair value gaps, and liquidity voids.

Practical Application

1. Monthly Chart Analysis: Dollar Index Example

   • Mark the beginning and end of each year.
   • Divide the yearly chart into quarterly segments (every 3-4 months).
   • Analyze price swings and identify shifts.

2. Weekly Chart Analysis

   • Further detail the quarterly shifts witnessed on the monthly chart.

3. Daily Chart Analysis

   • More granular view of market shifts within each quarter.
   • Use Cases: Dollar Index and Euro Dollar comparisons.

Smart Money Accumulation and Distribution

• Accumulate Buy Programs: Seen when the underlying asset shows stronger resistance to lower lows compared to the benchmark.
• Distribute Sell Programs: Seen when the underlying asset shows weaker resistance to higher highs compared to the benchmark.

Calibration and Forecasting

• Calibrate: Define key market structure shift points using past data (60, 40, 20-day data ranges).
• Cast Forward: Predict potential market shifts for the next 20 to 60 trading days.

Examples

1. Dollar Index and Euro Dollar: Historical examples showing how low and high points help frame future market movements.
2. Market Structure Shift: Validates the approach by using different periods for back-testing.

Key Takeaways

• Quarterly Shifts: Fundamental to understanding and predicting market movements.
• EPTA and Data Ranges: Essential for setting a framework and making informed trading decisions.
• Institutional Analysis: Helps in identifying key reference points and market structure shifts.

Conclusion

• Homework: Apply the look back and cast forward methodologies on different asset classes and time periods.
• Importance: Understanding quarterly shifts helps in grasping both short-term and long-term market movements.

Reminders

• Revisit the concepts regularly throughout January’s coursework.
• Focus on practicing methodology to internalize market behaviors.