ICT Mentorships: Lecture 8 - December 2016

Key Topics

• Double Tops and Bottoms
• Measured Moves
• Liquidity Pools
• Institutional vs. Retail Trading

Introduction

• Lecture focused on understanding double tops and bottoms in trading.
• Exploration of measured moves and clean highs/lows in price action.

Measured Moves

• Concept: Price projections based on previous swings.
• Application: Identifying runs on stops above highs and below lows.
• Observation: Measured moves are consistent across price actions.

Institutional and Retail Perspectives

• Retail: Views double tops as resistance; trades short with buy stops above.
• Institutional: Seeks liquidity above and below; anticipates moves beyond visible highs/lows.

Liquidity Pools and Ranges

• Liquidity Pools: Areas above/below current price where stop orders accumulate.
• Ranging Analysis:
  • Example of an up candle and sell-side delivery.
  • Identification of fair value gaps and order blocks.

Example Scenarios

Scenario 1: Double Tops

• Setup: Price trades into a bullish order block.
• Retail Expectation: Resistance at double tops.
• Institutional Expectation: Price reaches for liquidity beyond visible highs.

Scenario 2: Double Bottoms

• Setup: Price seen as support; potential buy opportunity.
• Liquidity Focus: Reaches for sell stops below support.
• Projection: Measure from high to low and extend downwards.

Trading Strategy Insights

• Double Tops/Bottoms: Serve as references for extreme range points.
• Market Maker Behavior: Regularly seeks liquidity beyond double tops/bottoms.
• Chart Analysis: Importance of marking double top/bottom areas.

Time Frame Considerations

• Higher Time Frames: More reliable for identifying larger stop runs.
• Specific Pip Ranges: 10-20 pips for intraday; larger for hourly charts.

Conclusion

• Clean levels provide future insights for trading setups.
• Phenomenon is observable across all time frames.
• Encouragement to explore charts for practical application of these concepts.

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Good luck and good trading!