29-ICT Mentorship Core Content - Month 4 - ICT Breaker Block

Last modified by Drunk Monkey on 2022-09-09 12:49
1 00:00:20,490 --> 00:00:32,190 ICT: We're gonna be looking at the breaker. Okay, and what we're gonna be looking at is how we can use this form of mitigation to highlight a trade setup.
2 00:00:35,070 --> 00:00:46,740 Or assume that we're watching price. And it trades lower and creates a short term low. event. So when that short term low is violated and trades down into a
3 00:00:46,740 --> 00:01:00,030 support level, we view that initial drop down below the previous low as a potential false break or turtle soup long. Below short term lows, there's going
4 00:01:00,030 --> 00:01:10,380 to be sell stops. And our expectation is is that we want to see if the market wants to get back above that short term low. Initially, it may come up and flirt
5 00:01:10,380 --> 00:01:21,690 with that same old low you and give an indication that may want to view that as a resistance price point, more more inclined to wait to see if it wants to show
6 00:01:21,720 --> 00:01:32,760 a real significant price move higher. Eventually, when we see that here, this is going to be informed by market structure shift. It takes out the high or the
7 00:01:32,760 --> 00:01:45,300 short term high. That high is what we focus on wait for price to come back down into that old high. Where it trades there, we view that as real support, because
8 00:01:45,300 --> 00:01:53,940 there's going to be orders inside that high that will be looking to be mitigated. In other words, those individuals that were short at that high,
9 00:01:54,360 --> 00:02:07,500 they're going to want to take those positions off and maybe get in sync with a new leg higher in price. As price moves away, that confirms that breaker and
10 00:02:07,500 --> 00:02:21,030 then we wait for higher objectives to be met in price action. Again, focusing on the high in between the two lower lows. One low has to be traded below. That's
11 00:02:21,030 --> 00:02:33,450 going to run out to sell stops. We focus our attention on the short term high that's in between the two lows we use that as a resistance level that's broken
12 00:02:33,450 --> 00:02:39,360 that will become support making it a bullish breaker
13 00:02:45,060 --> 00:02:55,380 Contrastingly, we can look at the market in this way. When the market trades higher and takes out an old high and then breaks below the low that makes that
14 00:02:55,380 --> 00:03:16,200 new high. Our focus is there and we view that as a bearish breaker Okay, so take a look a closer look. A bearish breaker. Okay bearish breaker is a bearish range
15 00:03:16,200 --> 00:03:26,490 or down close candle and the most recent swing low prior to an old high being violated. The buyers that buy this low and later see this same swing low
16 00:03:26,490 --> 00:03:39,240 violated will look to mitigate the loss when price returns back to the swing low. This is a bearish trade setup worth considering. We have an old high here
17 00:03:39,540 --> 00:03:54,900 that's traded through and rejected. It runs to stops above the old high. Those by stops are now neutralized. And we focus our attention on the swing low formed
18 00:03:54,930 --> 00:04:12,720 between the two highs. We see a market structure break retrains back to the swing low that is the bearish breaker. We look for another low to form with a
19 00:04:12,720 --> 00:04:14,820 new leg in price moving lower.
20 00:04:20,490 --> 00:04:30,240 The salient points are what we're looking for is an old high to be ran out, or a false break above an old high. This read on buy stops indicate buyers are
21 00:04:30,240 --> 00:04:42,420 trapped long. We know this is true when the market quickly does a repricing net seen here. repricing lower after buy stops are taken. That is a confirmation
22 00:04:42,420 --> 00:04:57,960 that we are potentially seeing a new breaker forming the low gets violated here. Once market structure is broken down and all future retracements will be viewed
23 00:04:57,990 --> 00:05:11,970 as new selling opportunities Especially once it trades back up to the low here. That gives us our bearish breaker. Okay for a bullish breaker, it's a bullish
24 00:05:11,970 --> 00:05:20,940 range or up close candle in the most recent swing high prior to an old low being violated. The sellers that sold this low and later see the same swing high
25 00:05:20,940 --> 00:05:32,220 violated, we'll look to mitigate the loss. When price returns back to the swing high. This is a bullish trade setup worth considering. Again, we have an old low
26 00:05:32,250 --> 00:05:42,660 that's violated. Taking out sell stops below that old low are swing highs where we're gonna be looking for bullish breaker, but we have to wait for price to
27 00:05:42,660 --> 00:05:53,310 break through that swing high to confirm that there has been a run on stops and that that old swing high will house or inside that swing high will reside a
28 00:05:53,340 --> 00:06:05,460 bullish breaker. As price trades back down to that swing high, we will be buying that with the expectation that there's going to be a mitigation taking place.
29 00:06:05,880 --> 00:06:14,160 Those sell orders that they use to drive prices down below the old low. They would be underwater here or not making a profit so they're gonna want to take
30 00:06:14,160 --> 00:06:23,250 those off and add more Long's that's our bullish breaker. And then we would expect to see and anticipate a range expansion to the upside.
31 00:06:28,680 --> 00:06:43,050 To telltale signs that you have a breaker information or confirmation. The rate on sell stops indicates sellers are trapped below the old low. The range
32 00:06:43,050 --> 00:06:52,020 expansion that takes out the short term high in between the two lows. This repricing higher after sell stops are taken as a confirmation that the market is
33 00:06:52,050 --> 00:07:06,660 in fact run on stops below an old low and old high that's violated. That supports a market structure shift for bullishness, this run here supports the
34 00:07:06,660 --> 00:07:15,210 market structure being broken higher in any retracements from this point on will be viewed as a new buying opportunity when it trades back into the old swing
35 00:07:15,210 --> 00:07:24,900 high here. Let me see that that's a bullish breaker. So let's take a look at it in real price action. Okay, we have an old low here, the market trades down
36 00:07:24,900 --> 00:07:35,310 below that low and punches through it again, and then rallies up. So what we're seeing here is that market structure shift after stops have been taken on the
37 00:07:35,310 --> 00:07:47,070 sell side. So it's been a massive repricing to the markets going to want to look to reprice lower and retrace back down into what where's our focus point, we
38 00:07:47,070 --> 00:07:58,410 find the short term high in the last candle in between the two lows that mostly recently formed and taking out their cell stops that scene here. So right now,
39 00:07:58,440 --> 00:08:08,310 this would be viewed as a bullish breaker, we would anticipate seeing the market trade higher, where those orders would be collapsed, once retreated back down to
40 00:08:08,310 --> 00:08:18,360 with price, any selling orders would be mitigated and new buying orders would be replacing them in their subsequent price action you would anticipate seeing in
41 00:08:18,360 --> 00:08:27,840 your charts, study your charts and looking at examples where you see this formation where you have the market creating a low and then the market trades
42 00:08:27,840 --> 00:08:40,200 down lower one more time and runs through the short term high in between. This is where classic support ideas are effective. You've probably done what I've
43 00:08:40,200 --> 00:08:49,140 done as a new trader where we look for Support Resistance ideas by drawing a horizontal line. And you think that you know, it's that easy? Well, you have to
44 00:08:49,140 --> 00:08:58,230 have a storyline behind why prices don't like doing. If you understand what the breakers doing, it's indicating that it's running a stop pool of liquidity out.
45 00:08:59,160 --> 00:09:08,130 When you find the short term load has been violated, find the short term high that just recently formed. When it trades back down to that that will be in fact
46 00:09:08,160 --> 00:09:18,900 a support level that is highly probable for bullish prices. You see that here? It's trading inside the range that's created with this last up candle. Why am I
47 00:09:18,900 --> 00:09:28,860 using this one and this one here? Because this one was the highest one prior to the drop down and we're using the entire range. Price trades down into it
48 00:09:29,370 --> 00:09:38,910 recapitalize is all the selling they sold here that drove prices down to take these sell stops out there underwater are losing money here. They have deeper
49 00:09:38,910 --> 00:09:46,890 pockets in the US they wait for price to get back to an area where they can mitigate those shorts and add new Long's and that's why you see that explosive
50 00:09:46,890 --> 00:09:56,370 price action seen here. So hopefully this has been more insight to breakers. And we'll talk more about these as we go through the mentorship and futures months.
51 00:09:57,000 --> 00:09:58,980 Until next time, I wish you good luck and good trading