ICT YT - 2020-01-28 - Forex Price Action Discussion - AudUsd.srt

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ICT: Hey, folks,

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it's been a while since I've put something up on my YouTube channel. So it's
nice for you to stop by and take a look at what I'm going to share with you

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today, I want to talk briefly, it's not gonna be a very long video, it's
probably going to be something new for most of you that are familiar with me.

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But the the concept of support and resistance, and the notion that old support
broken becomes resistance, and resistance broken becomes support all that stuff,

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I'm going to ask you to put that aside for a moment.

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I'm also going to ask you to suspend your belief in where price has reacted to
before as support, it will offer another level of buying put that aside as well,

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too. Okay. I kind of like want to introduce a concept that's prevalent
throughout my material. And it's the the notion of seeking liquidity, the market

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doesn't trade, whether you want to accept this at this stage in your development
or your career, or not. The truth is this. Price patterns, indicators, retail

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logic, all of those things are not catalysts that make price move. There's no
buying and selling pressure, there's no supply and demand. It's 100%.

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Engineered, okay. So, especially when it comes to the foreign exchange market,
which is more or less my specialty since 2006. If we are to understand what I

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mean by that, I'm going to take a sample set of price action. And if you pay
attention, I promise, you're going to learn some things here that you might not

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have expected to learn. When we look at price, and we studied price charts,
especially if you're a new person that's just sitting in on studying price and

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the markets and trading and such, it can be a rather daunting task. And true,
very intimidating. Because all of these candles here represent one particular

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trading day 124 hour interval where it started, where it stopped trading for
that particular 24 hour period. If I were to ask you, where the most significant

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price move has taken place, where would you look. Or some of you would say this
move here down. Some of you would say this move here, down. Others might say

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this move here up inside of this entire fractal. That's the actual move. So
what's happening is over here, and I'm believing I'm going to be very honest and

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tell you that this is an oversimplification, simply because I don't want the
video to be too long. And I don't want to bore you. And I'm probably boring some

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of the cynical people here already. But follow, I want you to look at the run
from this low all the way up to here. Now I'm not going to outline all the

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things that led to all this because it's not that important factor. But I want
you to look at how if we look at the idea of support and resistance, the idea

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that price has for whatever reason, and I'm not going to go into the catalysts
as to what made this low here form and run up to here. I'm going to cover why

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this area here, which acted as what everyone would see as a form of retail
support. Okay, or classic support and resistance theory, price for whatever

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reason came down, and it stopped and started going higher. Now there's going to
be a crowd that will readily come in and say, Oh, this is part of a harmonic

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pattern or it's a demand zone, or it's a order block. Or it's a Fibonacci
harmonic pattern. something of that nature. Others may look at that and say

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that's an Elliot wave pattern, it led to a rally. All of these ideas are
useless. without context, there has to be a narrative that's understood.

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Otherwise, how house price determining which retail logic or theory that causes
price to move if that's what you're subscribing to, because there's a myriad of

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different disciplines in the marketplace, as I mentioned a few of them just a
moment ago. Why is it and how is it determined by price

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Which one is going to follow at any given time? Because not all of them agree.
Once in a while, there'll be an agreement on one or two, maybe three different

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types of disciplines. But what is it that makes price elect to follow Elliott
Wave today, or supply and demand or order blocks. It's not the discipline or

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theory. It's the narrative that's missing from what educators are trying to
convey, because 99% of them don't have the narrative. They don't know, they can

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only give you examples on the far left side of the chart, and talk about what's
already happened. Now, right away, some of you're saying, well, you're about to

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do that right now, like you've always done, Michael. Well, that's because you're
outside the circle. I do these things before the fact. And I explained them, and

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I draw my students attention to specific things that they're trained to see and
observe. I prompted all of my followers on Twitter this week, to monitor the

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Australian dollar. And, obviously, that's what we're looking at here. And I want
you to consider this low. Okay, and just forget the idea of support resistance.

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Forget that. If this price rally started here, the natural assumption would be
when it gets down to that level, again, it should bounce again, this should

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provide you a trade to go long, I have over 2000 plus books, many of them are
regurgitated retail nonsense that does not promote or carry one, two,

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consistency, accuracy, none of those things, in fact, they promote confusion.
And if you are out in the industry now trying to chase, the new author, the new

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writer, the new educator, chances are you're wasting your time and your money.
And I'm just going to be very blunt and say it. If anything that you're

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following along in terms of quote unquote market maker, you're actually getting
a derivative of my 19 $96 million trading plan. And that was coached and taught

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to a small group of people. And much like everything else I've done over the
years. They've taken that and watered it down and revamped it and try to create

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something new out of it. But when you know, what's yours, you can see it. And
prior to 1996 no one was ever talking about market maker this and market maker

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that it was me, I was when I go online. Everything about market maker concepts
being taught to any retail audience is mine. Now, they may have added

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indicators, and add all kinds of retail fluff to what they're saying. But the
original ideas that I shared relative to market making, were largely founded in

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1996, lecture notes, I started trading 1992, November 5, matter of fact, in
1992, that was my my journey began. So I've been doing this for a long, long

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time. And I've seen a lot of folks come into this industry and tried to pretend
to be knowledgeable, try to be helpful, but in fact, they're actually de railing

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the very people that they're pretending to help. And the folks that are paying
attention to these people don't know any different because they don't know what

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they need to know. And by not knowing what they need to know, that's harmful to
them. So, if we look at this low here, and we had the idea that if it comes back

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down to that level books, retail support resistance, all the you know, the
trading education's centers and hubs for for trading, whether it be assets for

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stock trading, or commodity trading, or Forex, or crypto even. The idea is, this
is going to be a possible trading opportunity, because it's a daily timeframe.

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So therefore, we should get a reaction there. Sometimes that happens. Not all
the time. What I like to do is attack those individuals that believe in that

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theory. I want to take a retail idea, because if we if we classified speculation
into two groups, they're smart money, those individuals that are informed, they

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don't do what the masses do. They diverged from what? Well, the average person
or what we'll call street money. It's commonly referred to as dumb money.

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I don't mean to be derogatory, but I'm just using the commonly bandied about
terms, smart money. Their idea that this low is there's individuals that bought

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that and large institutional funds That have enormous amount of volume to have a
long term trending model, they will have a large pool of liquidity in the form

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of sell stops resting below that low. They're not actively trying to trail their
stop loss up every five points, or pips, because it's made a new equity high for

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them. Because their positions are so large, and their positions are meant to be
a long term time horizon. They allow trends to move against them a lot. And it

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takes a great deal of change for those models to be taken out, and then maybe
they'll reverse maybe they'll wait for more information, but they're not trying

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to turn on a dime, like a short term day trader or an intraday scalper, they
can't do those types of things, they don't have that luxury because of the

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protocols in place for long term hedge and institutional trading. They have
protocols they have to follow. And they allow the market a lot of breathing

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room, okay, so they're not trying to choke or strangle their positions by
jamming their stop losses up real tight, which is a common retail pitfall. So I

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want you to think about the large pool of liquidity that rests below here, okay.
And there are people in this industry that try to teach and they say that they

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don't go after your stock, there is no day quote, unquote, day. Well, there used
to be a day, okay, there used to be a collective entity, they were people, and

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they would purposely run stops, okay. And if you ever talk to a floor trader,
from the Chicago Board of Trade or Chicago Mercantile Exchange, they'll tell

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you, that's exactly what took place, day by day, every day, day in and out. Over
time, as the industry has evolved, we moved more and more away from the human

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element, much like every other industry in the world, to an automated artificial
intelligence. And the majority of how markets are priced and delivered to you

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now is all from an algorithm. And these algorithms were written with a lot of
old school retail, attacking theory and loads where the liquidity would be, or

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where the sentiment would be poised, bullish or bearish. They would make a run
on that because 90% of large funds, okay, or hedge funds actually use what is

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commonly regurgitated as retail logic. Now, you're probably thinking, well, if
that's true, Michael, then you said, you know, dumb money is the people that

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don't follow these ideas. They do what everyone else is doing. The large hedge
fund managers and folks that work on these long term trend models, they are not

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thinking like a retail trader by trying to get in every single position, trying
to trade every single day trying to manage their position with ultra tight

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stops. Okay, so while the logic is very similar in a lot of ways, the separation
and distinction between the two that have large hedge fund managers and retail

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street money is that retail street money can afford in their mind to take a
loss. So they do everything they can to try to avoid taking a monetary loss in

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trading. And by doing those very things by jamming their stop loss too tight, or
not using a stop loss right away and then letting the position go against them.

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And then all of a sudden, they either get stopped out because of a margin call
or they just for lack of a better words throw their guts up because they can't

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take it anymore. And they blow their account out. Those characteristics that
lead tend to get into a trade may be very similar to maybe exactly what these

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long term hedge fund managers are using for their trend models. But retail
traders many times will take characteristics of a specific approach or trading

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style like day trading or long term position trading. And they try to force the
characteristics of day trading inside of a long term trending model. or worst

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case, they're using a short term trading strategy. And they went into the idea
that this is a good short term intraday scalp. And because it moves really quick

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for them, they fall in love with it. And they say, Well, now this is going to be
a six month trade. And they let that one or turn into a loser. And if you've

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been trading for any length of time, you know exactly what that feels like.
Because all of us have fallen victim to that. And back in the 90s. I did a lot

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of that in my development.

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So I want you to think about the individuals that bought here, okay, yes,
there's an opportunity for two stops to be held to this low and this low. But

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right in here, I want you to think about that because this is the origin of this
entire price run. This is where all the largest pool of liquidity is going to

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be. Now, when folks say they don't get your stock, they don't reach for your
stuff. That's a lie this. These are people that don't know they're talking

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about, okay, they don't have any idea what they're talking about. They're just
trying to Pretend the elephant in the room, but the elephant is standing right

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there, whether they want to acknowledge it or not. And the elephant is, the
markets move on the basis of liquidity. They're either engineering liquidity, or

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they're going after open float, open float is the existence of buy side
liquidity. For instance, above an old high here, that's buy side liquidity,

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anything above that old high would be in the form of buy side liquidity or buy
stops, those buy stops are in two different categories. One, protecting a short

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position, or entering a new long patient on a breakout below an old low is sell
side liquidity. And that's gonna be in the form of two camps, sell stops for

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long position protection, or sell stops to break out with a new short position
on weakness. Smart Money will look at this low and target the liquidity below

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this low. Why because of the magnitude of the move that took place. So they know
there's a large footprint of fund level liquidity. When I say and when I talk

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about, they're gonna make a run on stops. I'm not talking about the traders over
and Atlanta, okay, or FCM. Okay, I'm not talking about those individuals, I'm

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talking about large institutional flows, where their stops are going to be. This
is an area that I drew everyone's attention to on Twitter. I asked everyone,

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where's all the dollar reaching for. And I prompted I wanted to look at the
daily chart. And this was the old low that anyone that's been studying with me

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will know right away, this is a pool of liquidity would be resting. And even
though the market already started coming down, right about here, I saw I was

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talking about everyone, following him looking at Aussie dollar. Now there are
times when traders should not be chasing the market. And this is going to seem

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like someone that's probably just started last month, okay. Or last summer, they
started trading, and he read 10 books, and now they're going to be in here

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looking to correct me, you're chasing price or you're not chasing anything,
okay, I'm telling everyone exactly what the markets going to do before it does

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it. And I'm giving you the logic. But I have to get your attention to a specific
framework in the marketplace, and focus your attention on that framework alone.

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It was this low. Now when I sit down and I start talking about the markets,
invariably, if someone was a daily chart up, they don't know, really what I'm

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looking at, unless they spent any time with me. All these candles back here, all
these highs and lows, they're gonna look at that. And they're gonna think that

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these things are factors for right now. And they're not what I was framing is
this. So the entire fractal that was of importance. And that was salient to the

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discussion for my Twitter tweets, was this low here, forget anything prior to
it. Okay, we're only looking at this. So as the market was starting to go lower,

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my attention was on this low and how we would attack it. So what's resting below
that? Sell side liquidity in the form of sell stops, it matters not how many are

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trying to go in the market to go short. And it does not matter how many are
going out of the market or the long position being stopped out. It's not an it's

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not important, not impactful, it just means that we understand. And we don't
overthink the fact that there's going to be sell side liquidity resting below

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that. Now there are ways to determine the majority of what that is, but it's
based on context and narrative prior to this low, which is beyond the scope of

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this discussion. So I want you to know that this level here they have on the
chart when I drop down into a lower timeframe, that's this particular low. Okay,

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so if we look at the actual low on that candle, it comes in at 6754. So 6754 and
that's it, we are going to make sure we have on our chart to the PIP. Alright,

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so now everything is calibrated route relative to this low. So I'm going to drop
down into a 15 minute timeframe, we'll continue our discussion. Alright, so here

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is the 15 minute time frame of Australian dollar. And you can see that we have
Monday's trading here. I don't have the entire high of Monday, it's not

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important. Drew everyone's attention. If you look at my Twitter feed

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at I underscore m underscore ICT that is where we started our observation. And
this is the old daily well as outlined on the daily chart. We have relative

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equal highs in here and price runs back up into a bearish order block, which is
this candle here. We're not going to teach order blocks here. It's in my lessons

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you can actually find a lot of that introductory and foundational information on
order blocks which is just basic approaches to it with my YouTube videos. I

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teach, obviously much more in depth in advanced use of waterblock theory in my
mentorship, the equal highs in here relatively equal highs, they run those,

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there's above that what's going to be the same thing we outlined on a daily
chart about above old highs is buyside liquidity. So they run those buy stops on

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anyone that's short. And the opportunity is that those buy stops flood the
market with buying interest immediately floods the market with willing buyers at

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a higher price. And smart money will pair their orders with that and sell short
right above those highs. And then every time the market has a retracement, okay

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presents an opportunity to create a new short position until we get down to that
old daily low. Now when we do this, okay, when we trade down to that old daily

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low to support resistance camp, those individuals that like to see these types
of things, they're going to be out here buying. And if you look at indicators,

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and such, you'll see that there's momentum indicators diverging bullish Lee at
these levels. And that's exactly what they want. They want traders to think that

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this is a low and the market starts to go up a little bit, but then it goes and
consolidation, new trading day begins. They run below these relative equal lows,

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what's below here, sell side liquidity. So what we're seeing is buy stocks being
taken. So if the buy stocks are being rated what's actually happening, so one

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has to take those out of that by side. So everybody has to have a seller, this
seller is profitable if they wrote it down to that old daily, low, or under it.

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Because below that old low is what willing sellers, they have sell stuff below
that. So they want to sell at a low price. Remember, it was over here. So the

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orders that were below that old daily low in the form of sell side liquidity.
They're screaming like with a banner in their hands, I am willing to sell way

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down here if you want. If it gets down here, I'll sell to you. Well, those smart
money that sells to the buy stops that are trying to protect their short

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positions. They sold short here, they write it down to the old daily low. And
they offset their position by distributing their shorts to willing participants

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that want to sell to a lower price. And the smart money will buy it back
covering their shorts. To get out of a short, you have to buy it back. Well,

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who's gonna buy it from Smart Money pairs it up with the liquidity resting below
the old daily low. And this is a concept that I teach is called offset

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distribution. Offset distribution is exactly how interbank works. You're not
going to see that in books, you're going to hear it from me if you train under

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me. But the concept is then really been watered down from folks that have
trained under me for a little while, or had been exposed to my content. And

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they're trying to rename things and draw attention to themselves. Like they
understand how markets work or how market making is done. And they're completely

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clueless. They're absolutely clueless, YouTube has been invaded by you guys that
have no idea what they're talking about, they're only going to talk about what's

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already happened. In the left side, you don't see them actually trading it, you
don't actually see them outlining it before it happens. And they're out there

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trying to promote multi level marketing. I market live I market analysis I
market Academy I am trying to copy off ICT is basically what that is, these are

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all people pretending Okay, and you'll never see them trading an account. And
many of you watch me do this last year where I took a small account and ran it

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up over seven digits. And I did it in short order. It brought a lot of
controversy. But I was doing a lot of what I just explained here. And those

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individuals that run services or try to run signal services, they were blown out
of the water because they can't answer for something like that. So they

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instigated a mt empty for server okay rented empty for server scam, which I was
just as well as anyone else surprised out easy it was to pretend and fake

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what your results look like when you go on social media. You can see these guys
on Instagram, they show their mp4 profits, what's your balances are and how many

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positions they have open and whatever. You can put in all that stuff after the
fact. If you watched what I was doing, I was my orders were resting in the

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market before the market would go up and you can actually see see, see these
things on my YouTube channel still. I have limit orders in the marketplace. It

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goes up it hits the limit order and then it goes where I want it to go. And then
I reverse and go the other direction. So there's no empty for server New

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tomfoolery there. Okay, they have been completely exposed as frauds and trying
to discredit me. And on top of that, I have 1000s of people that watch me do

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this every single week and I'm co signing what I believe the markets going to do
before it happens on Wednesdays on the weekends. So before these markets trade

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to these levels, I've already said this is what's going to happen. And those
that are familiar with me they'll know it were 98% accurate analysis every

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single week. That means 98% of the time, what I expect to see unfold in price.
That's what happens. And I'm predominantly only focusing on euro dollar and

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cable, my analysis of what the dollar index, and we've been bullish on dollar,
which lends well to these ideas with the weakness in Australian dollar. If you

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study the times of the day that the markets creating these highs, it's in an
area where I have dubbed over the years as an ICT kills them. Now what is a kill

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zone, a kill zone is a specific segment in time, at specific times of the day,
where there is a high probability for a key turning point to form. Now, those

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key turning points intraday could actually be the very daily high or the very
dearly low. It's not always the daily high or the daily low, and sometimes it's

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just a intraday in a market turn, like it would be seen on a one minute or 15
minute timeframe. I want to take your attention back to this level here. And

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remember that if it was hitting that old daily, low traders that view support
resistance, we're going to see that as a potential buying opportunity,

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especially if the add to it indicators. Okay, so if they started putting their
momentum indicators, their stochastic, RSI, CCI, MACD, whatever they're using,

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all of that is going to be painted with a bullish divergence. That's what the
algorithm does, it spends time in a range, which causes the indicators to go to

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an overbought or oversold relative to where it has been recently. So from this
high to this low, okay, take it out like this, I'm going to teach you real quick

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how to throw away all your indicators because you don't need an indicator to
tell you if you're overbought or oversold. A market technician, a mechanic with

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price does not need an overbought oversold indicator. They don't need to look
for divergence either. Because you can see it in price. Without the necessity of

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having an overlaid indicator on your chart. There's nothing on my chart except
for that horizontal line. And I've outlined the logic of what makes this market

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move. Now. I've already framed all this stuff on Twitter, I drew everyone's
attention to this before it happened. We go back to this old daily low, which is

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that horizontal line, retail is going to expect a bounce. And they give it a
look a little bit of a rally there but then they hold it. Then as a new day

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starts. Okay, when we have a new day beginning in Wellington, there's going to
be a new day started in the foreign exchange market. And the Australian dollar

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and New Zealand dollar typically will have really respectful runs in this time
of day before Asia starts. And during Asia, usually I'll show you the New

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Zealand can be traded with a scalping idea. The market runs below these relative
equal lows right below here, hit that and then it creates another relative equal

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low. So we have rated effectively, the old daily low here on a shallow sense.
And then we went a little bit deeper here, then the market rallies back up. And

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what is it doing here it's taking out the buy side liquidity that's resting
above would be seen as resistance by retail traders. It's gone up, it's gone up,

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it's failed to go here. So this is what in their eyes, that's going to be a safe
area to sell short or if they sold short down here. They can put their buy stop

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that will protect that short position right above these real safe equal highs.

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Which now all of a sudden, everybody on YouTube, everybody on social media,
Instagram, and all these multi level marketing companies, okay are pretending

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they understand that too. It's not always in equal height equal load, it's
rated. It doesn't always present that sometimes. These are continuations where

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we can run it come back and then recapitalize and go long again, for a longer
term move. So don't think simply because it's equal high equal low that you

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figured it out either because of the whole lot more context that's necessary.
This is a run on the bicycle equity running buddies relative equal highs. And

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it's happening in Midnight in New York time. rallies hits it, I mean an hour and
then make sense aggressive run to the sell side liquidity resting below these

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equal lows here. So we make a deeper path into the liquidity that rests below
that old daily low. So this low here, dug in deeper than the initial run in

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Asia. And below what was seen in the New York session on Monday of this
particular week, the 27th of January. Once we dug in deeper, then it rallies

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back and start spending time at and around that Oh, daily. Well, why does it do
that? Because there's all kinds of liquidity, the resting below that old daily

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low. And that's why we're seeing all these ebbs and flows around that level,
because it's allowing the algorithm is allowing orders to come into the

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marketplace and build up around that old daily low. Because like I said, there's
traders that look at the old daily low as support they want to buy it. Other

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traders are looking at when it breaks in it comes back up, they want to sell
short at it because they think it's support broken term resistance, and they get

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sliced and dice to the market breaks down and they chase it. When they do they
wait for these overs to vary. When they do they go short, because they're

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chasing price. And then what happens, the market runs back up above that old
daily low that they looked at as support broken out term resistance. And that's

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what's going on here. They're sweeping the liquidity above that old low for
those types of traders. So when we understand what we're looking for, it gives

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you a context to act. When the standstill when to anticipate a specific
direction in mind, where's the draw on liquidity? That's the draw on price.

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Okay, I teach in my concepts and in my mentorship and even in a lot of my free
lessons. The draw on liquidity. If you go on my Twitter feed, there is a free

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price action model that I shared last year. And it's a PDF file that you can
download and look at it. Till next time. I wish good luck and good trading.