ICT Mentorship Lecture 5/8 - December 2016

Key Topics

• Liquidity Voids
• Anticipating Range Fills
• Price Consolidation and Imbalance

Liquidity Voids

• Definition: A range in price delivery where liquidity is one-sided (either buy or sell) resulting in a "void" or gap.
• Characteristics: Wide, long one-sided price ranges or candles.
• Price Tendency: Prices will often revisit these voids to fill the "missing" liquidity.

Price Consolidation and Imbalance

• Price in Balance: When prices are in a point of equilibrium or small trading range.
• Movement Out of Consolidation: Indicates the involvement of smart money, which can cause significant price moves.
• Price Displacement: When price moves away from a consolidation, creating a void.

Timing of Void Closure

• No specific timeframe for when a void will close.
• Depends on current market conditions and price action around the void.
• Voids can remain open for months or close intraday.

Example Explanation

• One-Minute Chart: Shows rapid price movements away from consolidation.
  • Identifies areas with significant smart money activity.
  • Illustrates how liquidity voids form with long candles denoting one-sided price movement.

Price Action Around Voids

• Voids indicate a lack of buy-side liquidity.
• Expectation: Prices rise to fill the void, retracing over the voided price levels.
• Example Level: Expect filling between 104.76 and 104.50.

Five-Minute Chart Analysis

• Liquidity Void: Shown as a single large bearish candle.
• Sell Stops: Build below short-term support levels.
• Filling the Void: Anticipation of bullish movement covering the large bearish candle.

Trading Opportunities

• Identifying buy/sell stops and using them to strategize entry/exit.
• Example Trades: Buying opportunities below previous lows, selling at void closure levels.

Institutional Level Pricing

• Price movements occur gradually, not in a single pass.
• Smart money scales into positions, affecting price levels over time.

Gaps and Trading

• Price Gaps: Occur when there's separation between candle bodies.
• Common Gap: Used to place limit orders, providing trading opportunities.
• Example: Sell at 104.70 upon gap closure.

Additional Content

• Reverse logic applies when markets are bullish.
• Supplementary teachings and examples provided in PDF format.

Conclusion

• Understanding liquidity voids and gaps provides strategic trading insights.
• Upcoming PDF will include further examples and teachings.