Notes on ICT Monthly Mentorship Teaching Tutorial (September 2016)

Overview

• First of eight tutorials for September 2016.
• Focus on elements of a trade setup.
• Emphasis on developing consistency as a trader.

Key Concepts

Elements to a Trade Setup

1. Context/Framework:

   • Importance of having a favorable reason for a trade beyond just indicators or support/resistance levels.
   • Must understand the current market condition to make informed decisions.

2. Four Key Conditions:

   • Expansion: Market is trending away from equilibrium.
   • Retracement: Price moves back into a previous range.
   • Reversal: Price changes direction significantly.
   • Consolidation: Market is trading within a defined range, accumulating orders.

Characteristics that Define Trade Setup

1. Order Blocks:

   • Zones indicating potential reversals or continuations in price.

2. Fair Value Gaps:

   • Areas where price moved quickly, creating gaps in the market.

3. Liquidity Pools and Stop Runs:

   • Areas where stop orders are located, highlighting potential reversal points.

4. Equilibrium:

   • The midpoint of a consolidation range, serving as a reference for price action.

Interbank Price Delivery Algorithm (Algo)

• Description of how price is delivered electronically via algorithms.
• Understanding this helps to identify market manipulation and movements.

Trading Strategy

Trading Conditions

• Recognizing the current market condition (expansion, retracement, reversal, consolidation) helps determine your approach.
• Wait for price action that aligns with the characteristics of a trade setup.

Examples of Each Condition

1. Expansion:

   • Price moves rapidly from a consolidation zone, indicating a bullish order block.

2. Retracement:

   • Price returns to fill in liquidity voids created by rapid price movements.

3. Reversal:

   • Price reverses direction after running stops, indicating a potential new trend.

4. Consolidation:

   • Trading ranges defined by high and low price levels; look for the next impulse move.

Practical Application

• Focus on one or two characteristics initially to build consistency.
• Study historical price action to identify examples of the discussed elements.
• Incorporate the free tutorials offered on the website for additional understanding of concepts (Market Maker series, Precision Trading Concepts, Sniper Series).

Conclusion

• Emphasize the importance of understanding market conditions and using the right tools to identify trade setups.
• Trading requires patience and practice; focus on developing a solid understanding of one setup to achieve consistency.
• Good luck and good trading!