ICT Mentorship - Lecture 5: Equilibrium vs Premium

Introduction

• Focus on Equilibrium vs Premium in this session
• Previous session covered Equilibrium vs Discount
• Discussing market behavior in premium conditions

Key Concepts

Impulse Price Swing

• Definition and identification of impulse price swings
• Forming ranges based on impulse swings

Use of Fibonacci

• Drawing Fibonacci from high to low to identify trade entry points
• Optimal Trade Entry (OTE) between 62% and 79% retracement levels

Equilibrium and Premium

• Equilibrium is 50% on the Fibonacci scale
• Premium: market above equilibrium point, indicating a high price
• Selling at premium levels when the market is overbought

Trading Strategy

Price Swings

• Use of smaller and larger price swings
• Measure swings and watch for retracements
• Look for opportunities to sell when price reaches premium zones

Turtle Soup Strategy

• Concept of market taking out previous highs/lows
• Turtle Soup Sell: market reaches above impulse swing high and then drops

Identifying Opportunities

• Importance of selling at premium levels
• Using overbought conditions for short positions
• Taking profits below established lows

Practical Application

Example Analysis

• Identifying ranges using discernible price swings
• Anchoring Fibonacci to clear highs and lows
• Monitoring for equilibrium and premium levels for trading

Trading in Consolidation

• Trading in a consolidation market using Turtle Soup strategy
• Recognizing premium and discount within a range

Daily Chart Trading

• Application of concepts on a daily timeframe
• Even small moves in daily charts can be profitable

Conclusion

• Universal application of strategies in different timeframes
• Importance of understanding and applying Equilibrium vs Premium
• Using Fibonacci retracement levels to identify optimal trade entries and exits

These notes provide a high-level overview of the session on Equilibrium vs Premium, focusing on using price ranges and Fibonacci to identify trading opportunities.