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57-ICT Mentorship Core Content - Month 6 - Ideal Swings Conditions For Any Market

Last modified by Drunk Monkey on 2022-09-20 06:33
1 00:00:18,330 --> 00:00:26,280 ICT: Welcome back, folks, this is February 2017. Lesson one, swing trading, this teaching is going to be specifically dealing with the ideal swing trading
2 00:00:26,280 --> 00:00:38,460 conditions for any market okay, what is swing trading? It's gonna be the discipline of trading predictable price movements in the market with a high
3 00:00:38,460 --> 00:00:51,600 degree of consistency. We'll be buying when it's invalid conditions in the marketplace, selling short in bearish conditions in the marketplace. And swing
4 00:00:51,600 --> 00:00:56,490 trading is a form of intermediate term trading with trade durations of two weeks or longer in time.
5 00:01:03,750 --> 00:01:11,430 Okay, well it's the goal of swing trading, we're gonna be capitalizing on the effects of larger entities moving into a market and causing a significant
6 00:01:11,430 --> 00:01:24,330 displacement and price. And since trade durations can be two weeks or longer, potential rewards are considerable. And trade objectives of 200 to 500 pips and
7 00:01:24,330 --> 00:01:27,330 magnitude are possible rewards for such setups.
8 00:01:36,030 --> 00:01:46,470 Every market isn't ideal for setups for Swing Trading. Now you want to avoid for Swing Trading. Specifically, you want to be avoiding favorite markets in general
9 00:01:46,620 --> 00:02:00,180 for swing trading purposes. Well, larger moves every year rotate in and out of different marketplaces. There is no standard swing trading market or pair. Every
10 00:02:00,180 --> 00:02:11,640 three months there's a new opportunity formed for Swing Trading. What once was a big mover will not always be the next big mover this time, you have to
11 00:02:11,640 --> 00:02:15,810 investigate look deeper behind what has most recently happened.
12 00:02:21,450 --> 00:02:33,960 Now market profiles matter. markets move from one profile to the next in all timeframes. In monthly and weekly charts. Look for the current market profile
13 00:02:33,960 --> 00:02:45,570 for your markets of study. Avoid lackluster or lethargic markets to have little to no movement over the last three months. Now market profiles are
14 00:02:45,840 --> 00:02:56,250 consolidations where it's range bound, then there's trending market profiles. Then there's reversal market profiles. Now inside of the middle one here
15 00:02:56,370 --> 00:03:04,560 trending, this is going to be seen as expansion and retracement. And we're gonna talk more about that in the next slide.
16 00:03:10,289 --> 00:03:20,039 trending markets equal large flows. If the aim in swing trading is to position ourselves in moves that are likely to move at large distance, we should be
17 00:03:20,039 --> 00:03:29,399 looking for markets that are trending. If a market is confined to an obvious trading range, this does not indicate it has high odds for directional setup.
18 00:03:31,919 --> 00:03:40,529 Building your watch list of markets that are trending or it having market profiles that are trending on the monthly and or weekly puts high probability
19 00:03:40,529 --> 00:03:50,039 behind your setups. When we're looking at monthly charts, and weekly charts, you're gonna be looking for price action to indicate that it's not confined in a
20 00:03:50,039 --> 00:03:57,869 small little range. In other words, it's moved away from a consolidation area already. Once it's left the consolidation area, chances are we're going to be in
21 00:03:57,869 --> 00:04:09,929 a trending environment and it will most likely move to a larger level or PDA on the higher timeframe monthly and our weekly having an understanding that large
22 00:04:09,929 --> 00:04:20,219 flows or big participation by smart money. That is what pushes these marketplaces on these higher timeframes in one direction or the other. That is
23 00:04:20,219 --> 00:04:32,399 equally in terms of large flows. trading markets on higher timeframe charts are indicative of major players buying or selling that particular asset. You want to
24 00:04:32,399 --> 00:04:39,989 be looking at markets that are trending because that is the telltale sign that there are participants in the marketplace on an institutional basis that are
25 00:04:40,439 --> 00:04:51,179 pushing price in that higher timeframe. Chart trending markets. Again, that's the profile that you're looking to participate in, since the monthly and weekly
26 00:04:51,179 --> 00:04:59,879 charts are so long term and we're actually taking trades on a four hour basis. We're going to look for the setups are monthly and weekly and daily. But we'll
27 00:04:59,879 --> 00:05:08,789 get Searching for our charts. So if we're looking for moves on a four hour basis for entry monthly and or weekly chart, we have a great deal of probability
28 00:05:08,789 --> 00:05:16,409 behind us that the markets going to move in a trending fashion for our trade. Now, when we're looking at currencies, we can go through the Marketplace on a
29 00:05:16,409 --> 00:05:24,659 monthly and weekly basis and quickly ascertain whether or not what markets are trending higher, which markets are trending lower, and which markets are
30 00:05:24,659 --> 00:05:35,189 trending in a consolidation or holding pattern. markets that are in large trading ranges, you want to avoid that, because it's there for a reason. If the
31 00:05:35,189 --> 00:05:45,119 markets confined to a small consolidation or range bound environment, it's showing an indication of a lack of institutional interest. So if the market
32 00:05:45,119 --> 00:05:53,369 can't move out of that consolidation higher than there's an evidence of what a lack of buying, if it can't break out, that consolidation to the lower end, it's
33 00:05:53,369 --> 00:06:02,399 a lack of selling, so it's going to stay in a state of neutrality. It can't go higher, it can't go lower, so therefore, it's going to stay in a range. That's
34 00:06:02,399 --> 00:06:09,149 not what you're looking for for swing trades for the highest probable setups, when you have markets that are trending higher or lower on a monthly and weekly
35 00:06:09,149 --> 00:06:18,329 charts, or they have already left a area of consolidation. That is indicative of big players having muscled the marketplace out of that holding pattern or that
36 00:06:18,329 --> 00:06:28,259 trading range, or consolidation market profile. By having that on our monthly and or weekly chart, when we move down to a daily and or four hour chart, it
37 00:06:28,259 --> 00:06:39,239 will help you find setups to have a great deal of energy behind it. So you're getting involved in a marketplace that's about to take off and move a great deal
38 00:06:39,239 --> 00:06:41,879 of distance on his heart timeframe monthly and or weekly charts.
39 00:06:51,060 --> 00:07:04,410 Be willing to err on the direction. Avoid the temptation to pick market tops and bottoms and price action. It's far more likely to see the existing long term
40 00:07:04,410 --> 00:07:14,670 trending market profile to influence price action over a long term reversal. Focus on the long term trend in the market tide will carry your trade to the
41 00:07:14,670 --> 00:07:24,510 winner's circle more often than not. When we look at charts on these higher timeframe, monthly and weekly basis, we're focusing on what's the largest, most
42 00:07:24,810 --> 00:07:35,490 strongest directional play there is. Because if they're seeing it clearly on a monthly chart, then it's probably going to move another month at least. Okay.
43 00:07:35,490 --> 00:07:41,340 And since we're looking for at least two weeks duration on our trade, the probabilities are in our favor that we're probably going to get another
44 00:07:41,340 --> 00:07:49,380 continuation of that same previous month's direction higher or lower. And again, it's on markets that have already shown a willingness to move outside of a
45 00:07:49,380 --> 00:08:00,600 consolidation. By having our focus on these long term trends, it removes the necessity of figuring out what side of the marketplace you want to be on. If the
46 00:08:00,600 --> 00:08:09,390 marketplace for monthly and weekly suggest that you should be a buyer, then obviously we should be focusing on being a swing trader on long side. Now, what
47 00:08:09,390 --> 00:08:19,620 that does for you is sometimes it's going to create arguments internally, you're going to see the marketplace and assume for whatever reason that there's some
48 00:08:19,620 --> 00:08:27,240 evidence that you should not be a buyer. And you're going to resist taking the buying opportunities, you want to avoid doing that. Because if you see the
49 00:08:27,240 --> 00:08:35,430 movement on the monthly and weekly charts, indicating that it wants to go higher, and you get a buy signal on a daily and or a four hour chart, you want
50 00:08:35,430 --> 00:08:45,360 to take that signal. If it happens to fail, that's okay. Because you've already adopted the mindset that you're willing to be wrong. But you're on you're going
51 00:08:45,360 --> 00:08:54,300 to be wrong with a great deal of evidence behind you that you may still be in the right direction if you take another buy. But what happens if you take a buy
52 00:08:54,300 --> 00:09:01,680 signal, when the monthly and weekly are suggesting is going higher. So you take a buy signal on a daily or four hour setup, and it stops you out and it's a
53 00:09:01,680 --> 00:09:11,580 loss, then you take the next signal and it's a buying opportunity and it fails. What it's telling you is is it's probably near a longer term or intermediate
54 00:09:11,580 --> 00:09:21,660 term shift in the marketplace and NET PRESENT bullishness may be waning or that trend may be tired. So it will give you insight immediately it'll give you
55 00:09:21,660 --> 00:09:29,460 feedback but it also is a reminder that you should not be fearing taking losses because you're going to have them anyway. But it makes much more sense to be
56 00:09:29,460 --> 00:09:37,560 trading on the higher timeframe monthly and weekly basis in that directional bias. So if we have our trades focused there, many times you're gonna see if you
57 00:09:37,560 --> 00:09:46,830 study the moves that take place with a great deal of magnitude are going to be in the same direction that monthly and weekly charts indicating anyway. So it
58 00:09:46,830 --> 00:09:57,300 makes better sense for us as traders to be willing to be wrong. Buying in long term trends that are higher or being short and long term bearish moves on
59 00:09:57,300 --> 00:10:05,730 monthly and weekly and being stopped out on our short position. And it's far more likely that you're going to be profitable and had the move work out in your
60 00:10:05,730 --> 00:10:14,910 favor than it is against you. And I know it's a difficult thing for some of you to do. But you have to stick to a mindset. And it starts with the higher
61 00:10:14,910 --> 00:10:23,250 timeframe monthly and weekly chart because if we can do this, we will remove all the ambiguity about what it is that you should be looking for. And this is how
62 00:10:23,250 --> 00:10:31,170 it starts, you start with a monthly and weekly basis, and you work now on top down. Now, just simply because the markets most likely to move higher or lower,
63 00:10:31,170 --> 00:10:42,000 and the chart doesn't indicate that there's a setup, there's other things you have to look for. We're looking at the Euro dollar monthly chart. And I want you
64 00:10:42,000 --> 00:10:50,010 to take a look at this chart. And you can see there's several different market profiles here. But we're gonna focus on the last section of price action from
65 00:10:50,010 --> 00:11:05,340 around the end of February 2015. We'll just use the march 1 2015 census delineation and time on the bottom of the chart, and to present time now. And
66 00:11:05,340 --> 00:11:13,440 let's just highlight that now. This little section in here, if I was to ask you, what would you call that market profile? In this condition right here, this
67 00:11:13,440 --> 00:11:20,910 would clearly be a consolidation market profile, the markets showing an unwillingness to go higher and an unwillingness to go lower. It's stuck in a
68 00:11:20,910 --> 00:11:30,930 range. So if it's indicating this on the monthly chart, is this a high probability market to trade for buys and sells? Not that it would be indicated
69 00:11:30,930 --> 00:11:35,160 on a monthly chart now. So let's take a look at what's going on in the weekly.
70 00:11:39,390 --> 00:11:47,220 Okay, here's a weekly chart. And again, here's that same consolidation. Now one would quickly be saying, Oh, well, you know, I can see this several 100 pips is
71 00:11:47,220 --> 00:11:57,570 still probable market direction in here. And that will be true. The problem is, is it's not having a great ease of moving outside of that range, it's staying in
72 00:11:57,570 --> 00:12:06,450 a tight, consolidated range. Now, you can trade this type of pattern back and forth inside the range, you can do that, absolutely. But when we're swing
73 00:12:06,450 --> 00:12:15,090 trading, the best scenarios are the focus on markets that do not have this telltale Hallmark, you want to be looking for a trending environment, a market
74 00:12:15,090 --> 00:12:27,780 that has able to move on a monthly and weekly basis, because that is indicative of huge large flows moving into that particular asset. Let's take a look at the
75 00:12:28,470 --> 00:12:43,470 Kiwi versus the dollar. Okay, look at this market action in here. Anything significantly different about that versus what we saw in the euro? Obviously, we
76 00:12:43,470 --> 00:12:54,600 have a market it's trying to go higher, it has higher lows, it has higher highs, it's moving back up, it's closed in a liquidity void up to the 7490 level. So
77 00:12:54,600 --> 00:13:07,950 it's showing a willingness to go higher on a monthly basis. So is this a consolidation or is this a trending or a reversal? It's a trending environment
78 00:13:07,950 --> 00:13:19,770 for the monthly chart, it keeps making higher highs and higher lows. Now let's take a look at that same pair on a weekly basis. Here's that same section of
79 00:13:19,770 --> 00:13:28,470 price action and you can see it's successive higher, high and higher low. In this environment the market is indicating on a higher timeframe monthly and
80 00:13:28,470 --> 00:13:39,450 weekly basis, there are buyers willing to buy this particular pair. Let's take a look at another pair. It's just $1 versus the Japanese yen, this is the monthly
81 00:13:39,450 --> 00:13:47,340 chart. Okay, and you see here's a small little section of price action. Price was staying inside of a consolidation and then it left the consolidation
82 00:13:47,820 --> 00:14:01,380 abruptly. Here's that same consolidation here on a weekly timeframe and you can see it moves several 100 pips higher. Now again, it's shown a willingness to
83 00:14:01,380 --> 00:14:15,180 leave the consolidation that is very strong for looking for swing trades. In this case, you'd be looking for swing trades on the long side. Okay, let's go
84 00:14:15,180 --> 00:14:24,960 back to the Kiwi dollar weekly chart. And we're gonna focus in on this little area right here. Okay, so we've already outlined the fact that the Euro Dollar
85 00:14:24,960 --> 00:14:32,550 was in a long term consolidation, that's not indicative of a swing trading market. But we do have one here with the New Zealand versus the dollar index.
86 00:14:32,880 --> 00:14:42,540 Now the weekly was indicating that the price for New Zealand versus dollar was bullish, it kept making higher highs have making higher lows. So it's having a
87 00:14:42,540 --> 00:14:49,740 willingness to go higher on a monthly chart, so it just kept pressing Higher, higher and higher higher. So this is a good pair that we can go into further
88 00:14:49,740 --> 00:14:59,520 study. So we're going to go into this chart and break it down in the form of vertical lines delineating each line represents a new month. Now if you look at
89 00:14:59,520 --> 00:15:07,380 the bottom of chart, you'll see the little orange segments. That's the next month out. And then it goes another little white square, and it's an orange
90 00:15:07,380 --> 00:15:15,720 square, white square, orange square. What this is showing is or basically all I'm delineating is the first white square represents the first month, then the
91 00:15:15,720 --> 00:15:24,180 orange square represents the second month, the next white square represents the third month. So I'm showing you a pattern, if you will, what prices has done
92 00:15:24,180 --> 00:15:35,430 over the course of three month intervals. So what we're looking for is a buying opportunity. Okay, and you can see how price offered that just about every three
93 00:15:35,430 --> 00:15:44,370 to four months. So every orange area, we saw some measure of retracement. And then there was a buying opportunity to very next month or inside of the next
94 00:15:44,370 --> 00:15:55,410 month. So every alternating three months or so there was a new buying opportunity. And price kept pressing higher and higher. And here's a daily
95 00:15:55,410 --> 00:16:02,700 chart, we're going to zoom in a little bit here and take a closer look. And I'm also going to give you a little bit of homework assignment. We're going to
96 00:16:02,700 --> 00:16:12,090 actually, we're actually going to go into this teaching on Tuesdays live session of the coming week for the mentorship. So I'm actually going to give you this
97 00:16:12,090 --> 00:16:16,590 homework and we're going to actually review it as a live session on Tuesday morning.
98 00:16:18,659 --> 00:16:30,299 But we have that same area of price segmented in monthly intervals. So every vertical line delineates a new month and you see a rally up, then there's a
99 00:16:30,299 --> 00:16:37,049 consolidation or retracement and comes back and gives you another buying opportunity. Okay, I'm just gonna pull it the first one that's obvious you can
100 00:16:37,049 --> 00:16:46,169 see here, price comes back retraces gives a buying opportunity. I want you to study each one of these and want to review this in Tuesday's live session coming
101 00:16:46,169 --> 00:17:05,369 up this coming week, there's a buying opportunity in here where price rallied away. Price rallied here. It rallied here. And right at this point. And it gave
102 00:17:05,369 --> 00:17:18,149 them a buying opportunity there given a buying opportunity at that low. And at that low as well. Now what I want to ask you is looking at this, in terms of how
103 00:17:18,149 --> 00:17:29,069 much price has moved, these are swing trades. That means the duration you're holding is for about two weeks or longer. By having this view point on price,
104 00:17:29,069 --> 00:17:36,389 how long you're holding the trade and direction you're focusing on. It gives you an idea of where you're looking for the trades. And then what you're looking for
105 00:17:37,049 --> 00:17:51,269 a buying opportunity to price has to come back to a level of what discount. Okay, so if we get a level of discount, and price goes back to a PDA if we look
106 00:17:51,299 --> 00:18:04,109 at price in terms of the range, if we look at where sell stops are all those things, I want you to use those ideas, okay, and his PD arrays at each one of
107 00:18:04,109 --> 00:18:13,199 these reference points here. Okay, and we're actually going to go through every single one of these on Tuesdays live session coming up this week. But for now, I
108 00:18:13,199 --> 00:18:25,439 want you to think in terms of how many opportunities were presented in this pair on a swing traders perspective. And how many opportunities that were made
109 00:18:25,439 --> 00:18:37,859 available in terms of several 100 Pip moves. So we didn't see little tiny little moves, we saw several 100 pips of movement from these lows. Some of them
110 00:18:38,549 --> 00:18:49,469 actually are a little bit longer term in the formation. So they would have been wonderful ideal scenarios to get in sync with a long term or position Traders
111 00:18:49,469 --> 00:19:00,509 Mindset. We just closed January's content for long term position trading. There are opportunities in here where long term position trading can be employed. I
112 00:19:00,509 --> 00:19:09,659 want you to think about that as well try to classify why certain loads would have been good for those ideas as well. When we look at swing trading, we're
113 00:19:09,659 --> 00:19:18,779 looking at high probability directional trades. That's what we're looking for. We're not looking for range bound trading, we're not looking for turtle soups.
114 00:19:19,589 --> 00:19:30,539 To stay inside of a consolidation, we're looking for strong directional plays. Swing Trading model that I employ is highly linked to directional mindset. So if
115 00:19:30,539 --> 00:19:37,739 I'm looking at a monthly weekly chart, and it's indicating that it wants to go higher on those, those two timeframes, I'm going to be looking to be a buyer.
116 00:19:38,339 --> 00:19:47,189 And I'm going to be using all my tools to get in sync with that buyers mentality. If I'm bearish on monthly and weekly charts, I'm gonna be looking for
117 00:19:47,189 --> 00:19:53,729 all my tools online I think give me some sell scenario. Now the next lesson we go into we're actually going to get a little more framework about what it is
118 00:19:53,729 --> 00:20:01,319 that we look for to build these ideas, not just look at one thing, weekly charts but bring a little bit more definition to what it is that we do for Swing
119 00:20:01,319 --> 00:20:01,649 Trading