ICT Monthly Mentorship - September 2016
Introduction
- First teaching tutorial for September 2016 as part of ICT monthly mentorship.
- Total of 8 tutorials this month.
- Focus on consistency and understanding market trade setups.
Elements to a Trade Setup
Primary Concerns
- Context or Framework
- Favorability of trade ideas, not just based on indicators or levels.
- Includes 4 specific principles: Expansion, Retracements, Reversal, and Consolidation.
- Specific Reference Points
- Institutional order flow: Order blocks, Fair value gaps, Liquidity voids, Liquidity pools, Stop runs, and Equilibrium.
Market Conditions
- Expansion: Trending market.
- Retracements or Pullback: Market pulls back.
- Reversal: Market changes direction.
- Consolidation: Market is stagnant or accumulating orders.
Understanding Market Efficiency
- Combining context and reference points helps understand market efficiency.
- Interbank Price Delivery Algorithm (Algo) influences market.
- 90% of currency pricing done electronically.
- Understanding AI in market-making is crucial.
Key Concepts
Expansion
- Price moves quickly from equilibrium.
- Look for order blocks.
- Example: Identify a consolidation, then look for impulse moves away from equilibrium.
Retracement
- Price returns within recent range.
- Use liquidity gaps and voids.
- Example: Rapid price movement creates a void; traders wait for price to fill the void.
Reversal
- Price moves opposite to current direction.
- Focus on liquidity pools above/below old highs/lows.
- Example: Market hits stop levels and reverses.
Consolidation
- Price in a clear range, no significant moves.
- Equilibrium is the midpoint of the range.
- Example: Wait for impulse move from equilibrium.
Trading Framework
- Identify market condition and corresponding ICT tool.
- Wait for market to provide clues on the framework to apply.
- Practice identifying elements in charts.
Conclusion
- Study price action to understand consistent trade setups.
- Practice and repetition are key.
- Focus on one characteristic to start consistent trading.
- Aim for gradual growth into universal understanding of market conditions.
Note: Utilize provided free tutorials such as Market Maker Series, Precision Trading Concepts, and the Sniper Series for additional learning.