ICT Mentorship Lesson 8: January 2017

Overview

• Focus on possession trade management in bullish market conditions.
• Examine seasonal tendencies, intermarket analysis, and technical confirmations.
• Use higher time frame charts for decision-making.

Bullish Market Conditions

Seasonal Tendencies

• Seasonal tendencies are guidelines, not guarantees.
• Focus on bullish tendencies likely to occur in the next 3-4 months.
• Seasonals need technical alignment to drive prices.

Intermarket Analysis

• Consider interest rate markets and asset classes (stocks, interest rates, commodities, currencies).
• Look for convergence across three or more indicators.

Higher Time Frame Analysis (PDA)

• Use monthly and weekly charts for Premium Discount Array (PDA).
• Look for institutional reference points: order blocks, liquidity voids, rejection blocks, etc.

Trade Setup

• Focus on daily chart for quarterly/intermediate price swings.
• Frame bullish setups using daily PDAs.
• Decide between buy on stop or buy on limit.
• Risk management: no more than 1% per trade.

Trailing Stop Loss

• Use the lowest low of the last 40 trading days as a trailing stop.
• Adjust strategy as price moves 50% or 75% of the anticipated range.

Bearish Market Conditions

Seasonal Tendencies

• Anticipate potential bearish tendencies and confirm with intermarket analysis.
• Ensure alignment with interest rate yields and asset classes.

Higher Time Frame Analysis (PDA)

• Identify bearish order blocks, liquidity voids, and rejection blocks on monthly/weekly charts.

Trade Setup

• Use daily PDAs to frame bearish setups.
• Decide between sell on stop or sell on limit.

Trailing Stop Loss

• Use the highest high of the last 40 trading days as a trailing stop.
• Adjust to 20 trading days when 75% of the move is achieved.

Trade Management Example

Japanese Yen Weekly Chart

• Example provided using Fibonacci and PDAs.
• Trailing stops managed by reviewing high/low of past 40 or 20 trading days.

Key Points

• Don't try to pick absolute highs/lows; focus on quarterly shifts.
• Manage trade leverage and risk effectively.
• Allow room for market movement; avoid tight stops in long-term trades.
• Adjust stop-loss strategy as the trade reaches maturity.

Conclusion

• Balance between technical, seasonal tendencies, and intermarket analysis is crucial.
• Aim for high-probability setups with risk management strategies.