ICT Mentorship - Session 5: Equilibrium vs Premium

Overview

• Focus: Understanding equilibrium vs premium in the context of ICT mentorship.
• Comparison: Previous session focused on discount; this session deals with premium.

Key Concepts

Equilibrium vs Premium

• Equilibrium vs Discount: Previously covered; this session discusses the opposite.
• Premium: Markets that are in a premium state relative to their current range.
  • Commodities: Topic of premium will arise again.
  • Impulse Price Swing: Key initial indicator in identifying market range.

Price Action and Fibonacci

• Defining Ranges: Use Fibonacci from high to low to identify retracement levels.
  • Optimal Trade Entry: Typically between 62% and 79% retracement levels.
  • Equilibrium: 50% retracement level on Fibonacci.

Trade Strategies

• Selling at Premium: Aim to sell when market is at a premium, above equilibrium.
  • Significance of Levels: 62% and 79% retracement levels are vital.

Impulse Leg Analysis

• Price Swings: Multiple smaller price swings can form a larger impulse leg.
• Entry Points: Analyze retracement to identify optimal trade entry.

Detailed Analysis

Market Scenarios

• Price Swings: Analyze high to low movements and retracements.
• Equilibrium to Premium: When price exceeds equilibrium, it enters a premium.
• Turtle Soup Setup: A condition where stops are taken out, leading to a potential sell-off.

Trading within Ranges

• Consolidation: Ideal for understanding and employing premium vs discount strategies.
• Stop Runs: Identifying stops above the high can provide high probability trades.
• Profit Targets: Aim for lows already established to take profits.
• Use of Daily and Hourly Charts: Concepts apply across different time frames.

Practical Examples

Price Action Scenarios

• High to Low Analysis: Measure and analyze retracement levels.
• Overbought/Over-sold Indicators: Use price range to determine these states without additional indicators.

Strategic Trading

• Bias Independence: Ability to trade within a defined range without needing a daily bias.
• Conceptual Consistency: Concepts are applicable across different market conditions.

Conclusion

• Selling Strategy: Importance of selling at premium levels within the trading range.
• Professional Trading: Sell at premium prices, similar to selling goods at their peak value.
• Understanding Ranges: Key to both short-term and long-term trading strategies.