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99-ICT Mentorship Core Content - Month 10 - Index Futures - AM Trend

Last modified by Drunk Monkey on 2022-10-26 08:55
1 00:00:00,000 --> 00:00:09,480 ICT: Good folks. As a reminder, we are discussing commodities. And it's important that I remind you that this disclaimer is important. Everything we say
2 00:00:09,480 --> 00:00:27,960 here as it relates to this lesson should be viewed as a paper trade idea only. Okay, June 2017, ICT mentorship, ICT index trading, listen to the am trend
3 00:00:37,650 --> 00:00:46,980 Okay, the AEM trend. Now obviously when we refer to the and trend we're going to always have in the forefront of our minds, the traditional overnight session was
4 00:00:47,010 --> 00:01:02,550 seen as the london session. And the New York am session is defined by 9:30am to noon New York time. The true day high or low, will tend to form in between the
5 00:01:02,550 --> 00:01:17,700 hours of 9:30am and 10:30am, New York time. Between the open at 9:30am and noon New York time there's typically a trend or price swing daily. This is referred
6 00:01:17,700 --> 00:01:30,360 to as the am trend or morning swing. The am trend can be a continuation of overnight direction or an outright reversal of direction, right from the opening
7 00:01:30,360 --> 00:01:45,930 at 9:30am. You want to study many days of intraday price action to learn how consistent this morning price swing is. The am trend can end at 10:30am to 11am.
8 00:01:46,080 --> 00:01:59,370 But anticipated continuing up to noon, for the New York lunch hour. Can classically see the london session price action overnight, and this is the
9 00:01:59,430 --> 00:02:13,410 london session. And then at 9:30am the equities market open. That's when we started looking for our indices for index trades. And again, bar charts always
10 00:02:13,410 --> 00:02:24,450 gonna be showing it as Central time. So that's going to be one hour behind in the data. So it looks like 830 here to 11am is actually 9:30am to noon, New York
11 00:02:24,450 --> 00:02:41,250 time. So this is our New York am session. And the am trend begins at 9:30am or 830 Central as shown on the bar chart.com charts. And the am trend ends at noon
12 00:02:41,430 --> 00:02:54,510 or 11am. Central as it relates to bar chart dot coms data. As you can see here, during the New York session, price trades up into a bearish order block and it
13 00:02:54,510 --> 00:03:10,800 gives you the price swing for the am trend seen here. Okay, as another example, I want to just give you a few examples of the study so that we can go through as
14 00:03:10,800 --> 00:03:21,510 many sample size of data that you can consume as a study. But I want you to go back as far as you can using bar chart.com. And you can look at all the indices
15 00:03:21,510 --> 00:03:37,560 you can look at the NASDAQ, the Dow, the s&p, you can actually look at the DAX and footsie as well if you want to be looking at other indices looking at the
16 00:03:37,680 --> 00:03:53,490 London session here overnight again and then we have the New York am session. And right at the beginning of the am session we have price trading down into a
17 00:03:54,150 --> 00:04:11,400 previous down close candle or bullish order block and in price expands on the upside off of the run into the bullish order block. Notice the highs forming at
18 00:04:11,430 --> 00:04:13,650 10:30am New York time
19 00:04:20,130 --> 00:04:33,840 another example here the London overnight session. And we have the New York am session and price drops down into the range that was created during the London
20 00:04:33,840 --> 00:04:46,230 session. And it fills in a fair value gap. Only wicks were being shown here. We like to see bodies the bodies has to cross that's efficiently threaded. So we
21 00:04:46,230 --> 00:04:59,970 see two wicks there. That candle comes down and wicks into it during the New York am session. Rebels re prices higher and runs out off of a bullish
22 00:05:00,000 --> 00:05:22,440 waterblock later on in the New York am session, creating the am trend from 2394 50 up to 23 9950. Again, that's a bullish order boxing another example
23 00:05:22,440 --> 00:05:40,650 here, we have the london session. And we have the New York am session. Again, we have price trading down at the beginning of the New York am session at 9:30am,
24 00:05:40,650 --> 00:05:54,870 New York time, price trades down into a previous down closed candle. Bullish order block seen here and price trades from the 2352 handle all the way up into
25 00:05:55,200 --> 00:06:00,750 almost the 23 Six year but trades the 2367 big figure
26 00:06:06,360 --> 00:06:22,050 another example here, we have the london session. Now we're gonna be looking at the dow E Mini futures. So as a contrast, we see the london session the New York
27 00:06:22,710 --> 00:06:35,820 am session. And notice that we have here, price trading from London, we trade all the way down and clear to level of stops right here. And that's our bullish
28 00:06:35,820 --> 00:06:44,190 breaker. So at the beginning of the New York am session, we can anticipate that expansion based on institutional order flow. And the fact that during London we
29 00:06:44,190 --> 00:06:54,660 had a breaker, those last two up close candles during the London session. That's the catalyst for them selling. So they're going to be looking to reduce or
30 00:06:54,660 --> 00:07:07,530 remove that exposure by going along there. And it happens at the beginning of the New York am session or 9:30am equities open to the expansion move. That is
31 00:07:07,530 --> 00:07:24,090 actually a precursor by looking at the London session run out on the lows now we're going to contrast the NASDAQ E Mini. Again we're looking at the London
32 00:07:24,090 --> 00:07:45,600 session. And then we have the New York am session. Okay, and we see the New York equities open at 930 or shown as 830 here in central time on bar chart.com. We
33 00:07:45,600 --> 00:08:03,150 have price running out a previous low as a turtle soup. And now we're gonna look at the index SMT. Between 5am and 9:30am, New York time, relative highs and lows
34 00:08:03,180 --> 00:08:17,160 should be compared when institutional order flow is bullish. What that means we have to be comparing relative lows across the three indices. One index will fail
35 00:08:17,160 --> 00:08:27,210 to confirm a lower low it's usually typically seen or what we expected to seen in all three. So as all three are trading lower, while it's bullish one index is
36 00:08:27,210 --> 00:08:39,480 going to fail to make a lower low when that occurs, that you're bullish confirmation for trading the A and trend that scene here where at the top chart
37 00:08:39,540 --> 00:08:52,230 is the NASDAQ emini futures 15 minute timeframe. And from 5am into 930 equities open or in central time it's 4am to 8:30am it makes a lower low right the
38 00:08:52,230 --> 00:09:08,550 beginning of the New York am session. But the Dow which is the middle chart, from 4am, central time to 830 Central Time or 5am New York time to 9:30am
39 00:09:09,120 --> 00:09:22,410 equities open, it creates a higher low than at 4am Central Time to 8:30am Central Time, or will be 5am to 930 equities Open in New York time. The s&p E
40 00:09:22,500 --> 00:09:34,710 Mini futures makes a higher low. So by looking at those three indices, you can see there's a massive accumulation onto the Dow futures and on the s&p 500 while
41 00:09:34,710 --> 00:09:46,680 the tech sector rallied off of that divergence, by far March all of the indices moved up as the accumulation pattern takes place in price action. So the index
42 00:09:46,680 --> 00:09:57,330 SMT gives us this confirmation that there is something bullish going on behind the scenes. And we used some of the precursors in insufficient order flow and
43 00:09:57,330 --> 00:10:09,360 reference points in the previous slides. to frame what those catalysts were, in respective terms to the NASDAQ, the Dow and the s&p E Mini futures now and
44 00:10:09,360 --> 00:10:21,540 institutional order flow is bearish, we would be comparing comparable Highs between 5am New York time to 9:30am equities open, one indicee is going to fail
45 00:10:22,620 --> 00:10:32,880 to confirm a higher high, that would be normally expected. While they all move up in general tandem. Why more failed to do that when it's bearish institutional
46 00:10:32,880 --> 00:10:43,830 order flow. And by comparing highs that seen between 5am in New York's 9:30am equities open, you're looking at four and a half hours of time. Now, it isn't
47 00:10:43,830 --> 00:10:54,060 going to be always like you're seeing here, where at exactly the 5am hour, it creates a specific blow and then it creates a lower low or a failure to make a
48 00:10:54,060 --> 00:10:56,610 lower low at 9:30am. There may be
49 00:10:57,660 --> 00:11:11,520 a low scene at for instance, seven o'clock in the morning, New York time. And then 930 In the morning, New York time, those lows, they may diverge. Okay, so
50 00:11:11,520 --> 00:11:23,100 when I say that you're looking at relative highs and relative lows across the spectrum of time, okay of 5am in New York time, to equities 9:30am. That's your
51 00:11:23,100 --> 00:11:33,480 span or basically like a kill zone, think of it like that. So between that 5am and 9:30am time, it's four and a half hours of time, where you're constantly
52 00:11:33,660 --> 00:11:44,100 scalping when the price action is bullish on the higher timeframe daily. If we're expecting this trade higher, based on institutional order flow, and we
53 00:11:44,100 --> 00:11:53,430 dropped down to say a four and one hour basis, we're looking for PD erase, just like we've done in all the other asset classes thus far. When we look for these
54 00:11:53,490 --> 00:12:06,840 evidences to support the bullishness or bearishness in price, the filter is when institutional order flow is bullish, comparably, the lows? Okay. When price is
55 00:12:06,840 --> 00:12:16,320 bullish, overall, we're gonna be looking for priced failed to make a lower low once retracing, we'll see that footprint of smart money by way of the index SMT
56 00:12:16,470 --> 00:12:27,060 because of greed, and the sheer size of their orders and buying will always create this pattern, it'll be there, significant trading opportunities will
57 00:12:27,060 --> 00:12:36,870 always have this Hallmark to it. And when institutional order flow is bearish, we're gonna be looking for comparable Highs between 5am and 9:30am. And it may
58 00:12:36,870 --> 00:12:51,390 be a matter of simply the opening at 9:30am equities, then 8:30am It may be comparable higher, comparable low. So don't think that it's exactly at 5am and
59 00:12:51,390 --> 00:13:01,620 9:30am. Okay, don't think like their goalposts, and that defines it as bookends, and they don't specifically create those highs and lows, it can as being shown
60 00:13:01,620 --> 00:13:12,600 here. But between the 5am, New York time and 930 equities, Open New York time, you're going to be looking for relative lows and relative highs and just compare
61 00:13:12,600 --> 00:13:22,020 them. That's why it's important that you look at a large sample size, because you're going to see how it will show you that crack in correlation where
62 00:13:22,320 --> 00:13:30,960 otherwise the indices should be moving in tandem. As a drop lower, all three should be moving in in concert with one another. But when it's bullish one will
63 00:13:30,960 --> 00:13:40,080 fail to do that. And we're simply just applying doubt theories all it is, but timing in the relative terms to whether institutional workflow is bullish or
64 00:13:40,080 --> 00:13:55,140 bearish, and then bracketing out a specific time window, which is again 5am to 9:30am. Now 5am Why are we looking at the beginning 5am Because London traders
65 00:13:55,470 --> 00:14:03,420 are going to be taking their lunch then. And they're going to come back at some time, what time who knows, it could be 530 Could be six o'clock in the morning,
66 00:14:03,420 --> 00:14:16,650 New York time. So we start waiting for that build up of orders that come come by way of the UK, European traders that want to trade the indices in the Euro,
67 00:14:16,680 --> 00:14:26,310 North American continent, NASDAQ Dow and even any futures. So they're going to be still trading, they still have time of the day left for their trading day.
68 00:14:26,460 --> 00:14:36,150 And they're gonna be looking for opportunities to pour money into it. So large flows will pull in, and that crack and correlation when the markets really not
69 00:14:36,150 --> 00:14:48,720 going to go lower. You can anticipate for instance, if you were trading trading, the NASDAQ is your cup of tea indicee. You could look at this particular day
70 00:14:48,720 --> 00:15:00,360 here and see the massive build up at the lows on the Dow and the s&p 500. So you know with a great deal of confidence that run under the 5am low on NASDAQ That's
71 00:15:00,360 --> 00:15:08,880 a stop run in quickly that we reprice the Nasdaq futures higher, after that low has been violated from the 5am.
72 00:15:10,170 --> 00:15:22,260 The other trading indices, we have to factor in institutional order flow and reference points and expansion type ideas. So when it's bullish, as indicated in
73 00:15:22,260 --> 00:15:34,440 this example here, if price is expected to go higher, we see the divergence or failure to go lower on the Dow and s&p 500. Those ideas, you start looking for
74 00:15:34,740 --> 00:15:44,340 expansion moves. So what I do is I look for opportunities to trade on buying on a stop. So you can be a buyer on a stop or wait for price to trade up through an
75 00:15:44,340 --> 00:15:54,090 old high. And if that happens, we can also if that happens, we can also anticipate the breakout above down close candles, which would otherwise at a
76 00:15:54,090 --> 00:16:07,590 later time become bullish or blocks. So we can be ahead of the curve by buying on a stop on a down close candle, whatever the high is, our buy stock can be
77 00:16:07,590 --> 00:16:18,930 placed above that, and that would be our entry tool, or entry technique. Otherwise, the indicee that trades below an old low in bucks that overall trend,
78 00:16:19,200 --> 00:16:27,300 two of them are diverging or going higher, while one goes down, your eye should go right to that one, it's making a lower low and identify that as turtle soup,
79 00:16:27,300 --> 00:16:38,160 that's a run on stops by below the old low. So you're using two types of framework here to be a trader for trading indices, you can be buying on a stop
80 00:16:38,400 --> 00:16:49,530 buying strength, or buying weakness under an old low and scooping up that sell side liquidity, pairing up your entry there, either one is fine, there's nothing
81 00:16:49,530 --> 00:16:59,280 There's one, there's not one over the other. In terms of advantage. You're there all three gonna move in tandem once the setup takes place, as being explained
82 00:16:59,280 --> 00:17:10,620 here. Now typically there will be an index s&p Divergence to qualify the am trend setups a few times a week, there's been some instances over my
83 00:17:10,770 --> 00:17:18,960 observations when I was really active. In following the indices, where there's been every single trading day, there's been some measure of an index s&p
84 00:17:18,960 --> 00:17:28,290 divergence, it does not equate to a large opportunity with low risk. But if you if you look hard enough and scouted hard enough, you'll find a crack in the
85 00:17:28,290 --> 00:17:38,490 correlation and in there some kind of a little mood it takes place. It's important to look for them, but don't strain your eye looking for them. What do
86 00:17:38,490 --> 00:17:48,570 I mean by that when it's not obvious, assume it's not there. If it isn't clear, as you're seeing here, this is so clear. And so telling that it's classic, this
87 00:17:48,570 --> 00:17:58,920 is what you're looking for. And when it happens in price action live when we watch price action, are you looking at the equities open at 930 as traders and
88 00:17:58,920 --> 00:18:08,130 developing traders, when we're looking for these concepts of build our confidence to eventually use them at your own choosing, okay to help you build
89 00:18:09,300 --> 00:18:21,150 confidence behind your analysis. When we see this happen over and over and over again, it builds an understanding it builds anticipatory price skills. And also,
90 00:18:21,480 --> 00:18:32,340 it removes that fear of the question that comes up all the time, how do I know to be buying a turtle suit under an old boat? That's scary? Well, when you see
91 00:18:32,340 --> 00:18:41,010 these patterns like this, when you have two indices saying anything wanting to go lower, and one does the one that does go lower, that's a turtle suit, you can
92 00:18:41,010 --> 00:18:52,530 buy it right below that, oh Lo feel confident that you're doing so and watch it rip. And generally, as you see here, the speed will be seen at the one that
93 00:18:52,560 --> 00:19:00,030 makes the lower low, because they want to quickly get out of their athletic socks are taken, the one that has the expansion move, that can be a little bit
94 00:19:00,030 --> 00:19:08,850 more of a logic, but they're both, you know, the ones that diverge still will go up, but the one that hits the stops, speed will generally be seen there. It
95 00:19:08,850 --> 00:19:21,480 doesn't always equate to magnitude up to this habit mine. So we're going to build on this concept of the am trend when we do the setups teaching as number
96 00:19:21,480 --> 00:19:31,020 five in the index trading concepts. The next lesson I'm going to be teaching you is the PN trend and we'll talk about time and price as it relates to indices.
97 00:19:31,050 --> 00:19:38,490 And we'll also talk about the effects of the New York lunch hour. And until next lesson, wish you good luck and good trading