98-ICT Mentorship Core Content - Month 10 - Index Futures - Basics and Opening Range Concept
Last modified by Drunk Monkey on 2022-10-26 08:55
| 1 | 00:00:00,359 --> 00:00:11,399 | ICT: Hey folks, welcome back in our continuing series of the major four asset classes, and we're gonna be talking about index trading, and that's futures |
| 2 | 00:00:11,399 --> 00:00:18,719 | index trading. So it's important to remind you again, please take the time to read through the disclaimers here. Everything that I'm discussing as it relates |
| 3 | 00:00:18,719 --> 00:00:22,949 | to index futures should be viewed in light of a paper trade only. |
| 4 | 00:00:28,590 --> 00:00:36,240 | Alright, June 2017, ICT mentorship, ICT index trading concepts Lesson One basics and opening range concept |
| 5 | 00:00:43,200 --> 00:00:55,890 | Okay, index trading basics. We're gonna be focusing primarily on the E Mini s&p for the introduction here, but we will brush briefly over the other two indices |
| 6 | 00:00:55,890 --> 00:01:06,780 | i like to follow. So the trade symbol for the E Mini s&p is E S, N, which stands for the E Mini s&p 500. The trading session we're gonna be focusing primarily on |
| 7 | 00:01:06,810 --> 00:01:21,930 | is the New York session, specifically keying in on the 9:30am to 4pm, New York time. And the contract delivery months for the E Mini s&p are March code H. June |
| 8 | 00:01:22,200 --> 00:01:39,090 | Code M, September code you December code Z. And the format for the code is as the month code in the year, or an example would be ESU. One seven, or September |
| 9 | 00:01:39,120 --> 00:01:53,310 | 2017 is contract of the E Mini s&p. And the amount per tick is $12.50. One quarter of one point equals one tick, obviously for ticks makes one point or $50 |
| 10 | 00:01:53,310 --> 00:02:05,700 | per one point. And you're leveraging is seen by $50 times the s&p 500 index at the time of this day's close of this recording. As you see here on the right |
| 11 | 00:02:05,700 --> 00:02:09,060 | hand side it's about $122,000 leveraged |
| 12 | 00:02:14,730 --> 00:02:29,940 | alright Spoos or it's the slang name, everyone referred to it back in the 80s or so. That's 1980s For you folks that are less than 30 years old. So it's booze is |
| 13 | 00:02:29,940 --> 00:02:43,320 | a slang for for s&p 500 trading. So Spoos opening range concept. Okay, the highest volume for s&p trading is going to be seen between 9:30am and 10am New |
| 14 | 00:02:43,320 --> 00:02:53,310 | York time, so there's only a 30 minute span of time where that surge of the highest volume generally kicks off right at the opening today for Spoos is going |
| 15 | 00:02:53,310 --> 00:03:03,780 | to be viewed as 9:30am New York time to 4pm New York time. Now the market does trade 24 hours. But we're gonna focus primarily on the New York session as it |
| 16 | 00:03:03,780 --> 00:03:18,450 | relates to day trading. Opening range is gonna be seen with 9:30am New York time and ends at 10:30am New York Times you have an opening range of one hour. Okay, |
| 17 | 00:03:18,450 --> 00:03:27,600 | we will be narrowing our focus to the opening range between 9:30am to 10:30am, which tends to create the Spoos market high or low of the day, it can be a run |
| 18 | 00:03:27,600 --> 00:03:42,540 | on stops or fair value setup. You can see here in the chart, this is shaded in this is the opening range one hour between 930 and 1030. Now every chart that |
| 19 | 00:03:42,540 --> 00:03:50,550 | we're showing here in bar chart.com, is shown in Central Time, which is going to be an hour earlier. So that's why you're seeing it highlighted as 830 to 930. |
| 20 | 00:03:50,550 --> 00:04:03,420 | But in reality on the East Coast time, New York time in the US it's actually referring to 930 to 1030. Today beginning and true day ending |
| 21 | 00:04:08,910 --> 00:04:23,100 | Okay another example here, s&p 500 Emini, s&p, September contract 2017 is a 15 Minute candle stick chart and we're delineate the opening range 930 to 10:30am, |
| 22 | 00:04:23,100 --> 00:04:36,990 | New York time you'd see the volume is the highest during that portion of the day. And we have our opening range here. And we can look at the opening range. |
| 23 | 00:04:39,210 --> 00:04:51,480 | See that return back inside of the previous up close candle or bearish order block and then later on, we can see price trading up to a reference point inside |
| 24 | 00:04:51,480 --> 00:04:58,740 | the opening range as well for a later transaction for a short |
| 25 | 00:05:04,170 --> 00:05:16,200 | One more example. Okay, we're looking at the E Mini s&p September contract. This is a five minute chart on a different day we're doing the same thing. The 830 to |
| 26 | 00:05:16,200 --> 00:05:29,610 | 930 on bar chart is the same thing is 930 to 1030 New York time. So there's our opening range, highest volume, the opening range high and low. Inside the |
| 27 | 00:05:29,610 --> 00:05:40,890 | opening range, there is a return back to a bullish order block the last down closed candle right before the 11 o'clock hour in New York time or will be seen |
| 28 | 00:05:40,890 --> 00:05:59,730 | as 10 o'clock on the bar chart.com chart right there below shorter block and rally another example here the September contract again for Emini s&p 2017 five |
| 29 | 00:05:59,730 --> 00:06:11,490 | minute chart delineating the 930 to 1030. Opening range, highest volume again, during that portion of the day, our high and low on the opening range. And |
| 30 | 00:06:11,490 --> 00:06:19,860 | notice it's an extended range, it's not a small range and is extended here. When we have that, generally we'll look for the higher the low to be violated later |
| 31 | 00:06:19,860 --> 00:06:30,090 | in the day. If it's going to be a bullish day, we'll look for that upper end of the opening range to be violated or traded to reversal of the sell off day where |
| 32 | 00:06:30,120 --> 00:06:41,010 | if we had a move, primarily moving up during the opening range, we would look for the opening range low to be retreated to if we're bearish. But the extension |
| 33 | 00:06:41,010 --> 00:06:52,680 | or long, wide ranges in opening range for Spoos. That will give us a range to reach back into and look for stocks on the opposite end. In this case, we have |
| 34 | 00:06:52,680 --> 00:07:01,920 | the run below it. So a turtle soup right here while the opening range later in the morning. So we have turtle soup, and then a rally and it reaches all the way |
| 35 | 00:07:01,920 --> 00:07:15,930 | back to the opening range high during the stop that we're seeing during the opening range. Now, I mentioned that there will be a discussion with the other |
| 36 | 00:07:15,930 --> 00:07:31,770 | two indices that I like to follow. And that is seen with the N q or NASDAQ in the opening range is the same for this. It's 930 to 1030 New York time. And the |
| 37 | 00:07:31,770 --> 00:07:40,980 | volume is seen as being high that morning. And we have the high end and the low end of the opening range. And inside that opening range, we can look for |
| 38 | 00:07:40,980 --> 00:07:51,030 | reference points. And we have a bearish order block that we can return back into it's prior to the opening range, but we have a rejection block will be just |
| 39 | 00:07:51,030 --> 00:08:00,390 | below it with the last up close candle inside the opening range. And that could be used as well for a facilitation of a short. And again that same reference |
| 40 | 00:08:00,390 --> 00:08:21,480 | point is used later on in the day for a dramatic sell off. Our short here and a short here today for the NASDAQ emini futures is the same, beginning at 930. And |
| 41 | 00:08:21,480 --> 00:08:37,020 | closing at 4pm New York time. The other indices i like to follow is the Dow mini future. And the opening range is the same for it 930 In the morning, New York |
| 42 | 00:08:37,020 --> 00:08:48,990 | time to 1030 in the morning, New York time. largest volume during that morning. And again, it's the first 30 minutes 930 to 10 o'clock, it has the largest |
| 43 | 00:08:48,990 --> 00:08:57,900 | volume of the day, typically for the morning session. And that creates usually the higher low of the day. In this case, we've traded down from overnight, |
| 44 | 00:08:58,380 --> 00:09:07,530 | making the low of the day. And then we have our opening range high and low inside that we can look for in this case, a rejection block the lowest close |
| 45 | 00:09:08,220 --> 00:09:20,430 | down close candle, and it trades back into it here later in the morning, creating the rejection. And notice that that wick that went down it failed to go |
| 46 | 00:09:20,460 --> 00:09:31,710 | lower than the low formed in the opening range. That volume bar that makes the low of the day inside the opening range is the high green volume bar. Then we |
| 47 | 00:09:31,710 --> 00:09:40,080 | have that second attempt to trade down below 21 to 65. But it does it with a lower volume or the read volume volume bar. |
| 48 | 00:09:40,110 --> 00:09:53,400 | It's not enough volume. It's weak. We mentioned in the commodity section where futures in bonds and regular commodities, volume precedes Price. So if we're |
| 49 | 00:09:53,400 --> 00:10:03,780 | going to be making a lower low or retesting an old low or old high, it should be seen with higher vol volume. If it's not, then it means volume is preceding |
| 50 | 00:10:03,780 --> 00:10:13,980 | price in the sense that it's not as strong as otherwise would look, trading back down there at the time, that wick was a bold bearish candle, and otherwise would |
| 51 | 00:10:13,980 --> 00:10:25,680 | have been very scary to see that. But when that candle closed, the volume for that particular candle didn't register the equivalent to what was seen in the |
| 52 | 00:10:25,680 --> 00:10:39,210 | low the day earlier in the day, making the very low the day during the opening range. So that rejection block seen here did not see a higher run in volume. And |
| 53 | 00:10:39,210 --> 00:10:51,090 | it was eventually rejected, and price traded higher on the day. So when we look at indices and trading the indices, we can look at them on an individual basis |
| 54 | 00:10:51,090 --> 00:11:01,050 | as shown here. And we're also going to start blending them together to get stronger signals, directional bias, and we're also going to look for specifics |
| 55 | 00:11:01,050 --> 00:11:13,320 | about time of day that are unique with trading indices. This introduction is to focus primarily on the opening range. It's split in the full spectrum is at 60 |
| 56 | 00:11:13,320 --> 00:11:20,820 | minute opening range from 930 in the morning to 1030 in the morning, New York time, but the first 30 minutes we're also going to build on that idea as well. |
| 57 | 00:11:21,240 --> 00:11:32,100 | When we start talking about trading the am trend when we have the opening range idea defined and we have bias and we have institutional order flow also referred |
| 58 | 00:11:32,100 --> 00:11:42,000 | to on higher timeframes, the opening range will give us otherwise support resistance levels that would be going over other traders heads they wouldn't |
| 59 | 00:11:42,000 --> 00:11:51,660 | even be aware of it. But there's a very specific relationship to the first hours range high and low. And the first 30 minutes high and low as you'll see in the |
| 60 | 00:11:51,660 --> 00:11:57,150 | next teaching, trading 2am trend. Until then, I wish you good luck and good trading |