ICT Mentorship: Internal Range Liquidity and Market Structure Shift

Introduction

• Date: Tuesday, January 25th, 2022
• Platform: YouTube Channel
• Topics: Internal Range Liquidity, Market Structure Shift, Homework Review
• Chart Analysis: E-mini Nasdaq 100 futures contract (March Delivery 2022)

Homework Review

• 15-Min Time Frame Chart: E-mini Nasdaq 100
• Focus Areas: Old Low & Relative Equal Highs
  • Old low = Sell stops below
  • Relative equal highs = Buy stops above
• Market Structure Shift: Look for buy and sell side liquidity
• Reminder: Do the homework for better understanding

Key Concepts

Liquidity Pools

• Sell Side Liquidity: Market trades down to hit sell stops, then rallies
• Buy Side Liquidity: Market moves up to clear buy stops

Market Structure Shift vs. Break

• Intraday Market Structure Shift: Short-term moves within a day
• Market Structure Break: Prolonged multi-day movement
• Key Points for Shift: Evidence from price action and liquidity levels

Example on Chart

• Price Levels: Approx. 14,600 and 14,820
• Detailed Analysis on 2-Min Chart: Same day
  • Swing High/Low identification
  • Focus on short-term high before low forms
• Algorithmic Trading Insight: High-frequency trading algorithms rely on sub-minute charts
• Misconceptions Debunked: Traders should not mix concepts like order blocks, supply-demand, and other theories inconsistently
• Logic behind Liquidity Levels: Buyers and sellers exist at all prices; focus on where money is moving

Execution Strategy

• Identifying Market Structure Shift: Key Steps
  • Look for short-term highs taken out post trading below old lows (Sell Stops)
  • Look above old highs implying buy stops
  • Watch for signs above old highs/focused liquidity zones
• Practical Trading Tips
  • Use price action as confirmation of market structure shifts
  • Expect future moves to buy/sell stops within active zones

Order Blocks and Fair Value Gaps

• Order Blocks: Specific upward/downward candles carrying significance based on price action
  • Example: Downward candles in sell stop areas form 'order blocks'
• Fair Value Gaps: Areas between highs of one candle and lows of another without full overlap
  • Entry signals when the market trades down into gaps and moves up

Example

• Live Trading Example: Understanding trade entries and exits based on studying internal liquidity and gaps
  • Buy order execution, market response, rationale for buying/selling points
  • Managing risk and identifying favorable entry/exit conditions

Insight into Higher Time Frame

• 1-Min Chart Analysis: Recognizing same structures with high-frequency execution points
  • Liquidity Signature: Actions post liquidity trading emphasizes buying/selling algorithmic influence rather than market pressure
  • Order Block Execution: Using short-term structure to predict price moves

Homework & Further Study

• Tasks: Review e-mini futures charts for stop hunts and structure shifts
  • Annotate charts rigorously to learn patterns
• Points of Focus: Look for liquidity pools/structure shifts from 8:30 AM to noon (New York Time)
  • Journal observations for study and review repeatedly

Practical Advice & Closing

• Study Journal: Maintain a detailed journal of learnings and trades
• Time of Day Focus: London, New York, Asia sessions – understanding highs and lows in these time frames
• Work Ethics: Emphasize rigorous practice, detailed notes, iterative learning for improved skill
• Afternoon Trading: Not part of core lessons, best pursued after mastering current scope

Conclusion

• Motivation: See beyond doubts, continue studying, and perfect understanding
• Future Sessions: Further elaboration on practical insights in upcoming lessons