ICT Monthly Mentorship - September 2016

Introduction

• Objective: Focus on elements of a trade setup.
• Structure: First of eight tutorials for the month.
• Goal: Develop consistency as a trader through exercises and content.

Key Concepts in Trade Setup

• Two Primary Concerns:
  • Context or framework surrounding the trade idea.
  • Specific principles, tools, and conditions.

Market Conditions

1. Expansion
   • Market trend or movement.
2. Retracement
   • Market pullback.
3. Reversal
   • Market changes direction.
4. Consolidation
   • Market is stable or accumulating orders.

Context and Framework

• Institutional Order Flow Reference Points:
  1. Order Blocks
  2. Fair Value Gaps & Liquidity Voids
  3. Liquidity Pulls & Stop Runs
  4. Equilibrium

Understanding Market Efficiency Paradigm

• How smart money interprets price and influences the market.
• Recognizing expectations and applying tools based on market conditions.

Interbank Price Delivery Algorithm

• ALGO: Electronic system for pricing currencies - 90% computer-based.
• Significance: It's AI-driven with reduced human market-making involvement, especially in foreign exchange.

Market Dynamics and Anticipatory Skills

• Consolidation to Expansion:
  • Moves from consolidation to expansion or impulse swing.
  • Cycle: Expansion, retracement, reversal, or consolidation.

Characteristics of a Trade Setup

• Four Market Conditions:
  1. Expansion
     • Coupled with order blocks.
     • Indicates willingness to repricing model.
  2. Retracement
     • Coupled with liquidity gaps and voids.
     • Indicates return to fair value.
  3. Reversal
     • Coupled with liquidity pulls.
     • Indicates a significant new direction.
  4. Consolidation
     • Coupled with equilibrium.
     • Indicates building orders on both market sides.

Practical Application

• Use Fibonacci tools to determine equilibrium during consolidation.
• Define order blocks and liquidity voids for expansion and retracement.
• Identify liquidity pulls for reversal opportunities.
• Use daily tutorials and repetitions to frame trade setups.

Conclusion

• Objective: Find a specific characteristic or condition for consistent trading.

• Strategy Development:

  • Start with one condition to achieve consistent profitability.
  • Gradually advance to diversify trading strategies.

• Next Steps:

  • Analyze charts based on identified characteristics.
  • Engage with available tutorials and mentorship sessions.

Final Remarks

• Consistency is key; leverage tools and market conditions.
• Good luck and good trading.