32-ICT Mentorship Core Content - Month 4 - ICT Propulsion Block

Last modified by Drunk Monkey on 2022-09-09 12:49
1 00:00:20,880 --> 00:00:29,250 ICT: Okay, folks, welcome back. And we're going to continue our discussion on reinforcing order block theory. This teaching want to talk about propulsion
2 00:00:29,250 --> 00:00:40,440 blocks. And a precaution block is a candle or bar that is previously traded down into a down candle or bullish order block, and takes over the role of price
3 00:00:40,440 --> 00:00:51,000 support for higher price movement. In this example here, okay, in this crude diagram, we have a down candle, which shows price willingness to move higher,
4 00:00:51,750 --> 00:01:04,920 and then we have a new down close candle trades right back into it, same here. That candle becomes a propulsion candle. What makes it propulsion is that it's
5 00:01:04,920 --> 00:01:17,610 already dropped back down into the owner block that's already predisposed to go higher. Then we created another higher order block that touches the initial one,
6 00:01:18,420 --> 00:01:28,740 that new higher level bullish order block or down closed candle will be highly sensitive. It should never see the mean threshold, break half of the body's
7 00:01:28,770 --> 00:01:38,790 height or the middle of the range of their candles body. That That means thresholds should not give way this sensitivity is going to be very much more
8 00:01:38,790 --> 00:01:47,430 amplified when it trades back down into the high but we are willing to allow this still trade down in the middle of the range or mean threshold. But very,
9 00:01:47,610 --> 00:01:58,650 most people most likely will never do that it just trades down into the high of the candle and immediately explodes may go pepper to below the high of that
10 00:01:58,860 --> 00:02:09,540 particular down candle which we're naming as a proportion block the market will show a sudden and violent movement away from that down candle. That's a
11 00:02:09,540 --> 00:02:23,940 propulsion candle. Let's take a look at it in price action to get a better feel for what it looks like. Because let's take a look at a bullish propulsion candle
12 00:02:26,160 --> 00:02:40,770 KBC prices mood from a low here and we're on the buy side of the curve and the market has several down candles in here. So we would take this as one full
13 00:02:42,240 --> 00:03:01,260 bearish candle because consecutively three down candles to the bullish order block is framed like this, to have equilibrium down here. Price trades all the
14 00:03:01,260 --> 00:03:14,520 way down to this level here but fall short equilibrium. So we have a level at which price could reasonably trade down into but it doesn't do it here should
15 00:03:14,520 --> 00:03:25,710 price trades lower here and rally through its own three consecutive down candles. So this is an order block as well together all three candles. And then
16 00:03:25,710 --> 00:03:36,690 we have this candle right here. Okay, see this down candle. It's trading into these down candles together. So this is all one bullet or block because all down
17 00:03:36,690 --> 00:03:47,400 price movement, reaching for a level to buy. And then price moves through this candle here trades through the highest of the down candles. So that confirms
18 00:03:47,400 --> 00:03:56,190 this is a bullish order block, the very next candle trades higher, and the next candle opens and trades down into this candle here. When this candle creates the
19 00:03:56,190 --> 00:04:06,570 down close and closes, this becomes a propulsion candle. What makes it a propulsion candle is that we are trading another down candle into a previous
20 00:04:06,570 --> 00:04:17,820 down candle when the underlying context is bullish to powerful nature to a propulsion candle is you don't ever really see a mean threshold violation on it.
21 00:04:18,270 --> 00:04:30,900 So you get an opportunity to see it trade back down to as it does here. This candle opens, trades down into it right there. The open comes in at 133 45. The
22 00:04:30,900 --> 00:04:42,660 low on this candle comes in at 133 45 goes right to that candle. So that's a bullish entry here with a propulsion candle. And again, all it is is a down
23 00:04:42,660 --> 00:04:50,190 closed candle that trades down into a previous down closed candle or in this case, this is a 15 minute timeframe. I don't have a way of showing you a 45
24 00:04:50,190 --> 00:04:59,490 minute chart here but it's the same price action that we've seen here the down candle trades into this waterblock that would be bullish and then we see price
25 00:04:59,880 --> 00:05:09,300 do Trade higher, and then come right back down into this candle here. This is the propulsion candle. That means we should see immediate responsiveness on
26 00:05:09,300 --> 00:05:15,360 bullish price movement higher off this down candle should it trade back down into it again, here's the clue.
27 00:05:15,840 --> 00:05:23,340 If we break the mean threshold, that type of candle where it's already traded down into a previous order block, it's bullish. If this loses its mean
28 00:05:23,340 --> 00:05:32,400 threshold, chances are, it's probably not a good trade. So it means you can have a really ultra tight stop loss on your long entry. Or you can have immediate
29 00:05:32,400 --> 00:05:40,320 feedback that you're on the wrong side of the marketplace, and you probably are better off either go into the sidelines, or many times looking for a reversal to
30 00:05:40,320 --> 00:05:52,590 go short. Okay, we're gonna look at an example of a bearish propulsion candle. Okay, we're gonna frame it around a higher bearish order block. It's this candle
31 00:05:52,590 --> 00:06:07,710 right here. Price trades up into it here breaks down. So now we're gonna add another level of order book theory. We had this last candle, that's the bearish
32 00:06:07,710 --> 00:06:15,120 order block here, referencing this one as well. So now watch what happens we have price movement lower than we trade right back to this order block right
33 00:06:15,120 --> 00:06:27,510 here, this candle becomes the propulsion candle right there, this one so that we can cut that candle in half. Right here, boom hits it right there mean threshold
34 00:06:27,990 --> 00:06:40,440 trades immediately lower. This is a sell entry on the propulsion candle that's bearish. Gonna be a seller there. And we can also use a entry at a later time
35 00:06:40,440 --> 00:06:50,280 where it trades right back into this candles low, where it trades right here hits it responsiveness immediately moves lower. So look at the responsiveness
36 00:06:50,310 --> 00:07:02,190 after it trades into this candle. You have to see it break below this candles low, which it does here. Okay, it's already showing a willingness to not want to
37 00:07:02,190 --> 00:07:12,180 go above that mean threshold here. But it breaks down, then trade rate back up into this candles low it doesn't need to go up to the body. It's the low the
38 00:07:12,180 --> 00:07:22,140 candle on the propulsion candle, it's gonna be very, very sensitive. hits it immediate, quick responsiveness as you would expect that's why they gave me the
39 00:07:22,140 --> 00:07:30,960 name. It's a propulsion candle because it propels price quickly and suddenly. And it gives you immediate feedback, very little drawdown immediate price
40 00:07:30,960 --> 00:07:38,310 responsiveness. That's exactly what we're looking for short term traders. So hopefully this has been insightful to you guys. We're gonna get more information
41 00:07:38,310 --> 00:07:47,280 as we go along in the months and when we start mapping out outlines and setups. We'll see exactly when to anticipate propulsion candles. Until next time, I wish
42 00:07:47,280 --> 00:07:48,870 you good luck and good trading