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Version 1.1 by Drunk Monkey on 2020-12-09 06:17
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3 ICT: Okay, folks, long time no see, I'll share some things regarding the euro
4 dollar. Last week, we had the non farm payroll. And, you know, typically that
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8 that's a day that I like to refrain from engaging in. But I'm gonna give you
9 some things that added to the uncertainty about that particular day being last
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13 Friday, or February 1, to be specific, I want you to take a look at this section
14 of price action. And obviously, it's an intraday segment of price action. But
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18 nonetheless, it's going to communicate something I believe is helpful to those
19 that have ever entered a trade that failed to move in their in their favor, or
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23 fail to move out of a specific range. This is what is referred to as trapped
24 order flow. So we take a look at it in greater detail, but I want you to take a
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28 look at what's shown here. And try to determine what makes this segment of price
29 action difficult to move higher or lower, at least for the scope of last Friday,
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33 understanding what may lead to dynamic price action, one of the things you want
34 to be able to identify is when the market is less likely to move, you understand
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38 from my concepts that we teach how to determine where the market is being drawn
39 to. So that's to draw on liquidity. If you arrive at that, and you're correct,
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43 you'll find that you have very little resistance in terms of finding
44 profitability in your setup. But when we have things in price action that lead
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48 to adversities or what we refer to as high resistance liquidity runs a low
49 resistance liquidity run is something that would be seen as a very low resistant
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53 high energy price mood that runs an old high or runs an old low, very easy,
54 smooth price action. A high resistance liquidity run would be one that will be
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58 seen with a great deal of adversity. In other words, from a classical technical
59 analysis analogy, a lot of resistance in a bullish condition and a lot of
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63 support in a bearish condition. What frames this trapped order flow in here on
64 Friday is directly related to two price points. This one here. And this one
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68 here. Both of these two reference points here have smaller fractal patterns
69 within those larger patterns that also present additional features that would
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73 act as a trapping mechanism in the sense that it's very difficult it was
74 difficult rather for price to move out of that range on Friday. So I'm gonna add
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78 a little bit detail here and I'll give you some more insights as we as we go.
79 Okay, so we have this price when here is the larger bullish ICT breaker. Now
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83 without being all tied up with the lingo all we're gonna do is refer to this low
84 here we residing below that sell side liquidity could be in the form of sell
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88 stops to go short or sell stops on assumed long positions. price drops down
89 clears these stops out right here. Then price rallies away. Once this high is
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93 taken out. The price trades back down to that last close candle. This is a
94 buying opportunity. Generally if the market conditions is bullish, offered
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98 support and here when a little bit lower into this ICT bullish breaker. Again a
99 low high in between a lower low sell high liquidity ran out here. So inside this
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103 larger breaker there's a smaller breaker same pattern. Just on a smaller scale,
104 once price runs through that, it makes a high comes back, makes the short term
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108 low rallies through this old high, then trades back down below this low that
109 makes this a bearish ICT breaker. So now price trades up into there on Friday
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113 and has difficulty getting through it. We traded back down into this old high.
114 Just like we saw Reese response off of this one here, we saw this rally
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118 off of offer this high, this low to this high down to this low is a bullish
119 breaker as well, because we have liquidity below this low here, price trades
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123 down to it and then runs through the highest up close candle. That's your
124 breaker. Price hits it here. So we're seeing a back and forth tug of war for
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128 order flow back and forth in between those two price points. Now, if we add that
129 to the economic calendar, which obviously last Friday was non farm payroll, if
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133 we look at a five minute chart, here's the price action on non farm payroll
134 Friday price, meandering around until non farm payroll release, the release
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138 comes out it drops down aggressively, then rallies back through, drops back down
139 inside the original consolidation then sells off again, but hits a bullish
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143 breaker. So we have the market wanting to find a direction. But it can't find
144 its way out of a defined range. When you see this coupled with the economic
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148 calendar for things like FOMC related events, a high impact speakers, or non
149 farm payroll, this is what you could reasonably expect to see. If we have the
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153 price action, back to a 15 minute timeframe, you can see the difficulty with
154 price finding a direction in here. It can be very problematic for someone that
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158 wants to follow, for instance, the optimal trade entry long one could be a buyer
159 here. And yes, it made a higher high. But if you don't take partial profits,
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163 you're not going to see a profit market finds its way all the way back down into
164 the original point of the buy. If you're trying to be a seller up here, and
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168 looking to go short thinking that this is going to be the downside catalyst on
169 the initial run. Yes, it makes a lower low than this here. But if you don't take
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173 partials, you get stopped out. So it can be very frustrating back and forth when
174 you're inside of a Seek and Destroy type of event. And that's what this whole
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178 price pattern is here. Every high and low gets taken out subsequently. So you're
179 probably looking at the entry on this particular chart thinking, well, if that's
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183 the case, it was so hard. Why are you showing a short position? Obviously, I was
184 on the assumption that I would see something in here, that would help me frame
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188 an entry. Let's go back down into a five minute chart inside of this run up.
189 Okay, inside this up close candle, we like to look at the midpoint of that. If
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193 we breach it, like we do here, this candle runs a higher high, and then we start
194 to see it break down. We traded down below the midpoint of this up close candle
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198 when it started to drop down. I don't like to see that if we take a higher high.
199 So this to me sets up a scenario where we could be a seller. You can go short on
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203 that. If you look at the time of entry 1634 this candle right here 1635 that's
204 the candle I did it in this little movement back up above the midpoint of this
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208 up close candle I was trying to get in as close as I possibly can to this mean
209 threshold. My expectation is is that we ran stocks above this high and even if
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213 this stays in the Define range that it is here. If I can get below this low
214 here, I can take first profit and move my stop to a lower level. And I don't
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218 care at that point getting stopped out. But if I'm right about this being in it
219 Important high and we've done all the dirty work on the upside, and we grow
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223 lower. If I have a full 100 pips, in terms of a drop, it may not do this until
224 later in the week, if at all, it doesn't have to do it, I could be wrong. But
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228 I'm looking at the premise that we had difficulty on Friday, just like we saw on
229 the British pound, British Pound had that same scenario on Thursday. So you can
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233 destroy higher, low higher, low, higher, low, higher low.
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237 It's very frustrating when you're caught in this type of environment, because
238 you can be buying, it runs up a little bit and then comes back stops you out.
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242 And you think, Okay, well, I'm gonna sell short that now. And then you put a
243 short in, it runs up and takes a short term, how do you put your stop above,
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247 back and forth, it's very, very frustrating. The sooner you find that you're in
248 that situation, the better off you are, and you want to move to the sidelines.
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252 Or if you do see a run on the extended range. Like up here, I was entering, not
253 above the old high because I just didn't see it at a time. But ideally, you want
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257 to be a seller above old highs and fire below old lows, if you see the scenario,
258 or the out of the marketplace, because the closer you get to the middle with an
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262 entry, which is generally going to be with your like an optimal trade entry,
263 it's going to be painful, it's gonna be painful, you're going to be stopped out,
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267 it's not going to move in your direction. And it's going to be frayed for
268 frustrating. So to me, my thought process was that we cleared this high with
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272 this run. And I wanted to get in as close as I could to the midpoint of the up
273 close candle. Because even if I do get stopped out faster, it moves down a
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277 little bit, the likelihood of it come back to that midpoint is unlikely to occur
278 because we've cleared a high. So in other words, they've done some work up here,
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282 we cleared some stops. And now the market should seek, again, should is not a
283 definitive statement. It's not a an absolute definition of what to expect, okay,
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287 it's not going to be perfect. And you're not going to know that I don't always
288 know that I have very high probability and statistical edges that helped me get
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292 to these assumptions. But that's what's really, really all they are at the
293 beginning their assumptions. And until you see me go on Twitter and prove it
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297 after the fact. Then and only then was I right? But I'm not right yet. Even
298 though that the trade has paper profit. I'm not right about the trade, because
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302 it's still open. I didn't collapse anything that didn't take any portion of it
303 as a profit. So I want to see it trade below this low. Why because we've been in
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307 this trap overflow. And once we got to a higher high, I want to be at that high
308 or very close to it. And because it's the means threshold, that's the reason why
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312 I was entering at that price point. Now I'm not trying to be nailing the
313 absolute high, I want to be as close as I can to that high. It can happen after
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317 me. Nor it doesn't have to, doesn't have to be expected before I get in, because
318 the understanding is that we've already tried to run higher than this high with
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322 this high, we ran higher than this high with this high remained higher than this
323 high with this one. So I'm up here. So if I get stopped out, that gives me a lot
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327 of insight as to what I believe may happen with the euro dollar. Because if we
328 come back up and knock this position out, then I think ultimately euro dollar is
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332 going to go higher. Now, if it continuously goes lower, I know what I'm looking
333 to do, I would like to take a portion off below this low. If it runs through
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337 that, I would like to take a portion off below that. move my stop to a point of
338 reasonable open this paper profit and then hopefully see if I can get 100 PIP
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342 move out of it. And that's it. If I'm right in my assumptions about what has
343 transpired in here,
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347 I'm feeling this as they had high, anyone short, they were knocked down. Anyone
348 that sold short here, they were knocked out as well. And it broke down
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352 aggressively. And then anyone that was selling short up here was not, again not
353 allowed to be a participant in this move that's coming. So therefore, they not
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356 00:14:34,710 ~-~-> 00:14:45,540
357 visit individuals out. So I want to hold on to this position. It admittedly, if
358 I were to tell you how I feel internally at the time of the entry, and also
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362 currently right now talking to you. I don't feel comfortable about the trade.
363 Now in my past history. Every time I've had a trade that felt uncomfortable the
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367 whole if I didn't like the way it felt, while I was in it, they generally are
368 the ones that pan out because they're the ones that either exit too early. And I
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372 take too much off at my first and second third profit scaling. And I wish back
373 in hindsight that I wish I would have held on to it longer with a larger
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377 portion. Because of the feelings I have about that idea. We are still in a
378 range, it has yet to break below this low. So we're still inside of a dealing
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382 range. What's the range now to this high in this low, we're on the low end of
383 it. Now, we could have just very easily traded below this low here, and it
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387 starts to tear off and goes higher and stops me out. And that's trading. That's
388 the way it works. Sometimes you just you're just wrong. I have a rule based idea
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392 that I'd like to be able to take something off below this low here. Now I could
393 take off something right now. And essentially, I would have 20 pips or so. But I
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396 00:15:55,890 ~-~-> 00:16:07,800
397 only have two and a half standard watts on in terms of leverage, one over 100
398 and some $1,000 demo account. So I don't have a lot to be concerned about you if
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401 00:16:07,800 ~-~-> 00:16:18,930
402 it stopped me out. And I don't have a lot to make as an illustration for this
403 idea. But admittedly because of the technicals that are here. And because we
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407 just moved out of just the high end of the range that the final Friday's non
408 farm payroll price action, until we break out below this low, then I'd feel
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412 better about the likelihood that reaching below here. But right now it's still
413 hammering around, they could come all the way back up to the top, near the top
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417 of this range. And everything I have an open profit for this setup would be
418 eroded. So what was the point of this video, the point of the video is to see if
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422 he starts seeing opposing conditions that would present both sides. Okay, this
423 is obviously a nice ideal scenario to be a buyer at when classical support
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427 resistance would work. If you just use this Oh, hi, yet classical support
428 resistance would be favorable here. In this area here, when we have a high a low
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432 higher high once the lower point or low and between those two highs is broken on
433 the downside, draw that level as your resistance generally, it'll act as
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436 00:17:22,470 ~-~-> 00:17:35,940
437 resistance and your classical support as our levels will work. But if we have a
438 range that's defined with this massive repricing as what this is here, all of
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440 89
441 00:17:35,940 ~-~-> 00:17:46,680
442 this by side delivery, extremely overweighted. On the buy side, the market does
443 in fact rebounds right at this point here and it spends a lot of time
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445 90
446 00:17:46,680 ~-~-> 00:18:00,360
447 accumulating right off of this breaker. It runs up to its obvious level of order
448 flow that would create a barrier or wall. Now they tried several times to drive
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450 91
451 00:18:00,360 ~-~-> 00:18:09,060
452 it up in there one more time here higher high, and it just couldn't find
453 traction going up. But even though it didn't find traction going up, this
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456 00:18:09,390 ~-~-> 00:18:18,900
457 retracement really wasn't all that energetic either. So what I'm doing is I'm
458 using a very, very small position to get attached
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460 93
461 00:18:19,079 ~-~-> 00:18:29,249
462 to this particular pair. Because I have a position and it allows me to think
463 about what I would be feeling if I had skin in the race. In other words, if I
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466 00:18:29,249 ~-~-> 00:18:37,439
467 had money, and at that risk, which I don't own this because it's a demo trade,
468 everything I teach with is a demo. Now you can have an issue with that and say,
469
470 95
471 00:18:37,439 ~-~-> 00:18:44,789
472 well, you have any business teaching, because you're not trading with real
473 money. I'm not here to defend that I could care less. Okay, I'm teaching
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476 00:18:44,789 ~-~-> 00:18:54,839
477 conceptually. And if you're a new trader, that's my target audience, because you
478 need to have some kind of foundation and you don't build a foundation with live
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480 97
481 00:18:54,839 ~-~-> 00:19:03,689
482 funds, because the only thing it's going to do is teach you bad habits, and poor
483 thinking and worry about the money. And I'm teaching the concept of reading
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485 98
486 00:19:03,689 ~-~-> 00:19:13,649
487 price action, if you can respect that. Going forward and just understand it the
488 conceptual ideas that I teach, repeat over and over and over again. That does
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490 99
491 00:19:13,649 ~-~-> 00:19:25,589
492 not translate into money. Now, it could, if you do it with a Live account, and
493 it pans out in your favor. But it also can and it absolutely will turn around on
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495 100
496 00:19:25,589 ~-~-> 00:19:35,129
497 you. And you'll do it wrong and you'll suffer a loss. If you try to trade with
498 live money. Nothing that I do in my teachings provides a 100% strike rate, it
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500 101
501 00:19:35,129 ~-~-> 00:19:51,269
502 doesn't happen. I take losses I lose sometimes I get it wrong sometimes. I just
503 read it wrong. And I'm not stating that this is going to make you money. I'm
504
505 102
506 00:19:51,269 ~-~-> 00:20:02,609
507 stating that this is going to help you avoid times when the market is far less
508 likely to pan out in your favor. And then Again, it's whenever we see opposing
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510 103
511 00:20:03,179 ~-~-> 00:20:12,149
512 ideas, and you're inside of a trapped range ready to hit the market can't find
513 its way out. If you go back and look at periods where there's extended
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515 104
516 00:20:12,149 ~-~-> 00:20:24,839
517 consolidation in a market or specific asset class, chances are you're going to
518 find this scenario. Cake this, there's a there's a good side and a bad side to
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520 105
521 00:20:24,839 ~-~-> 00:20:35,459
522 this. Okay, the bad side is it's very difficult to find moves with a great deal
523 of magnitude that go higher or lower, we have to find our way out of that that
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525 106
526 00:20:35,459 ~-~-> 00:20:48,509
527 range first. The good news about this is that there's going to be a large
528 displacement that will occur once we exit this range, once there has been a
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530 107
531 00:20:48,509 ~-~-> 00:20:57,629
532 buildup of positions, and we don't know for certain if it's the institutional
533 buying or the institutional selling that has the heavier weight. I don't know
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535 108
536 00:20:57,629 ~-~-> 00:21:08,639
537 that. But I know that once we leave this range, we'll have a pretty high odds
538 that we're going to have a sustained price move of several 100 pips both know it
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540 109
541 00:21:08,639 ~-~-> 00:21:19,409
542 could be, you know, move up several 100 pips or several 100 PIP move lower, I
543 don't know at this point. But I'm placing weight on the fact that I want to be
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545 110
546 00:21:19,409 ~-~-> 00:21:26,819
547 on the high end of the range here, with the likelihood of it clearing up these
548 relatively equal lows. And that's what this liquidity pool is, if we run through
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550 111
551 00:21:26,819 ~-~-> 00:21:37,739
552 this and serve some kind of energy, I would like to see it below, here. But if
553 I'm wrong, and it trades all the way up, stops this out and trades above this
554
555 112
556 00:21:37,739 ~-~-> 00:21:46,439
557 liquidity pool, relative equal highs, then I think that this high is going to be
558 taken out, and we'll probably trade, you know, a little bit longer move on the
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560 113
561 00:21:46,439 ~-~-> 00:21:58,229
562 upside. If you look at also, euro dollar, you know, we've been in a really
563 sloppy consolidation. For months since the fall of last year, the Euro dollar
564
565 114
566 00:21:58,229 ~-~-> 00:22:12,059
567 has basically been sleeping inside of a range of a couple 100 pips. And this
568 movement here, it's highly suspect to just remaining in the range. So to help me
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570 115
571 00:22:12,059 ~-~-> 00:22:23,639
572 get a better feel of what prices in initially showing right now, for this week,
573 I wanted to carry something from over on non farm payroll, I wanted to see how
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575 116
576 00:22:23,639 ~-~-> 00:22:33,029
577 we opened up we didn't really open up to much different from where we closed on
578 Friday. So again, I'm watching to see if we reject this low, and then we try to
579
580 117
581 00:22:33,029 ~-~-> 00:22:45,569
582 run higher up, it would look really weird in terms of price action, but it can
583 do it. And it would only be beneficial to me. If we run these highs, because I
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585 118
586 00:22:45,569 ~-~-> 00:22:53,669
587 think then this high would be taken out. And we were just going to continuously
588 press higher on the higher time frame dealing range being broken. But for now,
589
590 119
591 00:22:53,699 ~-~-> 00:23:02,819
592 as long as we remain below these highs, that obviously would indicate to me that
593 we're probably gonna make a run declare up these equal lows. Now it could come
594
595 120
596 00:23:02,819 ~-~-> 00:23:12,359
597 down clearly sequel lows, rebounds this void. And that would be something that
598 we monitor monitoring and seeing if they make or attempt to run back up. We
599
600 121
601 00:23:12,359 ~-~-> 00:23:15,839
602 would like to see it obviously find resistance in here and not try to trade back
603 above
604
605 122
606 00:23:15,839 ~-~-> 00:23:24,809
607 here and move lower. But you know, we're not in control price, we'll just have
608 to see what happens. But I just want to give you guys an opportunity to see what
609
610 123
611 00:23:25,019 ~-~-> 00:23:35,249
612 it looks like when I have problems. Technically, when it's challenging for me,
613 because I put a tweet out on Twitter last week and on Friday and mentioned that
614
615 124
616 00:23:35,789 ~-~-> 00:23:46,889
617 euro dollar is between two opposing ideas from my content. This is a bearish
618 breaker. Okay, this is a bearish breaker as well. And that's why I have it
619
620 125
621 00:23:46,979 ~-~-> 00:23:55,889
622 directly between both of them. Originally, it was this one. But this one is a
623 breaker as well. And I got a question asked, you know, what is? Why is this a
624
625 126
626 00:23:55,889 ~-~-> 00:24:06,569
627 breaker because what stops would have ran out first. It's this short term high
628 right here. So the high, low higher high liquidity was ran out here. And then we
629
630 127
631 00:24:06,569 ~-~-> 00:24:18,179
632 broke down through it. So that makes this a breaker. So you can see there's all
633 kinds of layered, opposing ideas. So if I'm trading, I want to find a very low
634
635 128
636 00:24:18,179 ~-~-> 00:24:29,819
637 resistance liquidity run. That means everything is so heavily weighted in my
638 direction, or my idea in that trade setup, that it's going to take a real move
639
640 129
641 00:24:29,819 ~-~-> 00:24:40,619
642 of significance for me to be wrong, and see it fail. The more adversities and
643 things you have standing in your way with your trade idea. We shouldn't be
644
645 130
646 00:24:40,619 ~-~-> 00:24:48,599
647 surprised when we have a trade that stops us out or it fails to move out. And
648 this wears us down emotionally and psychologically. We just can't stand anymore.
649
650 131
651 00:24:48,599 ~-~-> 00:24:59,669
652 We just closed the trade. If you look at the overall market environment, it will
653 look many times similar or similar in many ways. Like I'm describing here, the
654
655 132
656 00:24:59,669 ~-~-> 00:25:07,559
657 market In consolidation, so if you look at when markets are trading and trading
658 ranges, now you understand we can go back and look at price, you'll see that
659
660 133
661 00:25:07,559 ~-~-> 00:25:18,359
662 it's being held between two breakers. And one of those breakers gonna have to
663 give way and then the market will have a much easier way to trade from high
664
665 134
666 00:25:18,359 ~-~-> 00:25:28,199
667 resistance liquidity runs, which is where we're at right now. It makes it very
668 hard for markets to find sustainable moves, then transitioning from that to low
669
670 135
671 00:25:28,199 ~-~-> 00:25:34,979
672 resistance liquidity runs, or very efficient, symmetrical price movement. So
673 hopefully you found this insightful and I'll talk to you next time wish good
674
675 136
676 00:25:34,979 ~-~-> 00:25:35,999
677 luck and good trading.