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ICT YT - 2021-05-14 - Market Structure Is Not It

Last modified by Drunk Monkey on 2021-06-07 05:13
1 00:00:30,630 --> 00:00:42,900 ICT: Hi, folks, welcome back a little bit of an impromptu off the cuff video from guru ICT. Alright, so what brought me on YouTube today? Well, yesterday, I
2 00:00:42,900 --> 00:00:53,040 had a whole lot of fun exposing another YouTube fraud. And I'm sure you all probably caught wind of that, and a little bit of my colorful language coming
3 00:00:53,040 --> 00:01:05,790 out. I'm human, I'm not perfect. But sometimes things need to be said, in no uncertain terms. So carrying on along with that theme and keeping the circus
4 00:01:05,790 --> 00:01:21,240 alive, I got sent by seven or eight of you, this fella. Now, you probably heard me say things in the past on his YouTube channel, where I'm comparing
5 00:01:21,240 --> 00:01:28,920 contrasting where I'll show you entries, I'll show you the management of the position, albeit in demo or paper trade on trading view. But I'm not using the
6 00:01:28,920 --> 00:01:40,500 replay function, this young man seems to be found that the replay button, or these types of things here in his charts are overlays. And that's not trading,
7 00:01:40,500 --> 00:01:48,660 that's not executing, it's not managing anything. That's not even pushing any button. It's just marking up. And that's it. And while that's okay, and I don't
8 00:01:48,660 --> 00:02:00,690 have a problem with that, per se, I do have a problem with that. This right here, okay, because everyone knows who that's directed to, namely me. So you can
9 00:02:00,690 --> 00:02:11,430 see a lot of the stuff here, there's an influence that I've had on this guy. And while I don't trade like he's doing, you can see the influence I had on him.
10 00:02:11,670 --> 00:02:21,120 market structure is not all there is. Okay, I'm going to give you a little bit of a lesson today. And this is something I would have really preferred to keep
11 00:02:21,120 --> 00:02:29,160 from a mentorship. But I really feel generous today. So I'm going to take you over to the chart. And this is the British pound. Okay, now, I'm going to start
12 00:02:29,160 --> 00:02:37,380 talking about things in hindsight here. But I'm also at the end of this, I'm going to take you right into yesterday's mentorship video. And you'll actually
13 00:02:37,380 --> 00:02:55,500 see and hear me say what I told my group almost 18 hours ago. Oh, I see. When was it posted in 17 hours ago. So in a time right now is noon, East Coast time,
14 00:02:55,800 --> 00:03:05,700 you can see it down here. So everything I'm saying. And what I'm going to show you at the end of the video, I was on the hard right edge of the chart. And
15 00:03:05,700 --> 00:03:15,480 before it even did what I'm going to explain to you here, already seen what it was gonna do. So I was able to forecast them and say it that way. Okay, so this
16 00:03:15,480 --> 00:03:27,780 idea of market structure being just structure that's not at all, what the markets rely on. There is an underlying narrative that needs to be understood.
17 00:03:27,810 --> 00:03:40,950 Otherwise, if you don't understand what the present narrative is, what is the market following what premise is it under? And market structure is not the be
18 00:03:40,950 --> 00:03:51,000 all end all. It's not the panacea? It's not the answer to everything. Now, it does provide framework. I'm not gonna deny that. Okay. And in fact, that's how I
19 00:03:51,000 --> 00:04:01,920 started teaching on baby pips back in 2010. I started with very basic, rudimentary ideas about market structure that I learned from Larry Williams. I
20 00:04:01,920 --> 00:04:12,120 later on learned years after my introduction to Larry Williams idea of market structure, which is nowadays prevalent, everybody's rip off course, the idea of
21 00:04:12,120 --> 00:04:20,610 market structure, okay. And when it's a market structure break, or when there's a shift in market structure, there's two distinctions there, okay. Not
22 00:04:20,610 --> 00:04:32,940 everything is equal, when it comes to market structure. There is classic market structure. And then there is institutional market structure. And I'm going to
23 00:04:32,940 --> 00:04:43,860 tell you and teach you exactly the difference between those two. Okay. The young man that runs this, I don't have a Instagram. Otherwise, I would have reached
24 00:04:43,860 --> 00:04:52,620 out and commented on here and I'm not going to create Instagram yet because I'm going to be creating one in March of 2022. Once I get my Instagram back in
25 00:04:52,620 --> 00:05:00,210 operation in March, I'm going to tag a couple people and then I'll let you know what that account is because I want them to be tagged. Otherwise, if they with
26 00:05:00,210 --> 00:05:08,790 Instagram I have, they'll just block me. And it'll be just, you know, falling on deaf ears. But at least everybody will see it. It'll be there. And then we can
27 00:05:08,790 --> 00:05:09,840 let the games begin.
28 00:05:11,130 --> 00:05:19,650 Now with all that out of the way, let's get down to the nitty gritty here. We're looking at the British pound, the daily chart. And I want you to think about how
29 00:05:19,740 --> 00:05:32,430 the ideas of support and resistance are, again, prevalent in retail. And the young man that operates that Instagram is pretty much a support and resistance
30 00:05:32,430 --> 00:05:46,170 kind of guy. And while that's fine, and support, resistance can work. Now listen, it can work if you are in alignment with the present narrative. Now,
31 00:05:46,170 --> 00:05:55,200 what is narrative? And what's the difference between narrative and market structure? Well, if you look at price action like this, okay, market structure
32 00:05:55,290 --> 00:06:03,690 in its classic sense, well, if you look at this high here, this high being broken there, and if it comes back down, and that's a classic resistance broken,
33 00:06:04,080 --> 00:06:13,170 turn support. I don't subscribe to that. I don't subscribe to that at all. Now, I did in the beginning, when I first started in 1992, I felt that that was the
34 00:06:13,170 --> 00:06:24,270 answer. It's not. Now there are times when the market will react to levels like that, especially if it's a higher timeframe, like a weekly or daily level,
35 00:06:24,780 --> 00:06:33,150 there's going to be some sensitivity there. But there isn't always going to be that higher time frame level to key off of so you don't have to use smaller
36 00:06:33,150 --> 00:06:40,080 timeframes. Otherwise, you have to sit on your hands a lot throughout the year and have very little trading. And I guess that's not a problem if you're
37 00:06:40,080 --> 00:06:48,480 predisposed to having a long term perspective and analysis. But most traders today want to be in there, either short term trading, or scalping day trading,
38 00:06:48,480 --> 00:06:58,110 that type of thing, because it's the Fast Money game everybody wants to be a part of, and maybe I'm guilty of, you know, helping that movement. But that only
39 00:06:58,110 --> 00:07:07,950 matches my personal personality. Really, if it doesn't match yours, then obviously, it's not a good thing for you to do. But what is being shown here in
40 00:07:07,950 --> 00:07:22,020 this chart, we have old high here. Notice the candles close here, and an open here. So we have this wick, and we have this wick right there. Same thing here,
41 00:07:22,020 --> 00:07:35,610 small little wicks above it. When I'm looking at price, I'm looking at how the market reaches back into areas of liquidity. And most people will say, Well,
42 00:07:35,610 --> 00:07:50,250 yeah, there's buy stops above this high. There's sell stops below that low.  Their sales thoughts below that low. biceps above this high. And sometimes
43 00:07:50,250 --> 00:07:57,990 that's true. And other times it's not. I want you to think about price like this, okay. And then you go into your settings on trading view, go to settings,
44 00:07:58,500 --> 00:08:12,030 and go up to wicks in, toggle that box, take it off. And now you have this. When I'm looking at price, I'm looking at it initially with this perspective on
45 00:08:12,030 --> 00:08:23,280 ignoring the wicks. I'm focusing on the bodies because that's the primary volume in each one of these individual candles. I'm not arguing that this candle didn't
46 00:08:23,280 --> 00:08:32,580 trade higher. Okay, during this interval on that day, yes, the British Pound versus US dollar did in fact trade higher. I'm not referring to it after it's
47 00:08:32,580 --> 00:08:39,570 closed and moved away from it in the same sense. Now, there are times and there are things I'm looking for when I'm considering the wick, but right now I'm
48 00:08:39,570 --> 00:08:48,300 teaching market structure. Okay. And this is institutional market structure.  That means your perception of price being support and resistance is not the same
49 00:08:48,300 --> 00:08:55,860 thing as the interbank those traders are not looking at the market through the lens of support and resistance. They're looking at it from two unique
50 00:08:55,890 --> 00:09:07,050 perspectives. liquidity and in balance. That's it. Now, above these candles bodies, there's going to be buy side liquidity, that means buy stops. Anyone
51 00:09:07,050 --> 00:09:15,480 that's been short has a buy stop right there. Now you might be thinking who would have a stop when it's trading over here? Large funds. For folks that hold
52 00:09:15,480 --> 00:09:29,700 a position long term. There's a lot of businesses that hold currency, because they're waiting to do future transactions. So liquidity about here may not
53 00:09:29,700 --> 00:09:40,200 necessarily line up with the commerce and of the Forex. But there's going to be a large fund, some entity will have a stop here or buying interest above the
54 00:09:40,200 --> 00:09:51,930 high. Long term trend models will look to buy above that. So when the market trades up there, notice what it's doing. The bodies go just above that old area
55 00:09:51,930 --> 00:10:02,010 where the bodies are here. It does not go above where those wicks were. It doesn't need to the institutional person As I'm showing you here is the markets
56 00:10:02,010 --> 00:10:07,410 reaching for that liquidity, just in the same way it did in a reverse
57 00:10:08,849 --> 00:10:19,589 these bodies here, the market dropped down below that to Keeling all the sell side liquidity there. And then it rallies above the take the bicep liquidity
58 00:10:19,589 --> 00:10:37,349 here, and then ultimately, there. Now, that's reaching for liquidity, that's institutional market structure 101. institution market structure to one. Okay,
59 00:10:37,379 --> 00:10:53,369 the next level is imbalance. Now, I want to go back to using the wicks for this.  Alright, so now, we had this price run right there, and it goes above this
60 00:10:53,399 --> 00:11:04,499 candles close, or the body of it. So we have a first run into that area, and it attacks that liquidity. When it creates this price run, what is it created in
61 00:11:04,499 --> 00:11:19,409 this particular candle, it's created an imbalance, what's imbalanced, it's moved one sided, it covered a lot of ground. And it is one single large candle on the
62 00:11:19,409 --> 00:11:31,319 daily chart. So when this next candle here closes, we know that there's an area between this candles low in this candles opening, that is primarily all one
63 00:11:31,319 --> 00:11:37,589 sidedness. It's all buying. Now, if we look at this,
64 00:11:43,800 --> 00:11:54,990 and frame it in such a way where this begins the imbalance. And this ends it well, if we start to trade down into that, like we did on Wednesday, the
65 00:11:54,990 --> 00:12:04,350 likelihood is that we're probably going to trade down into this candles high to rebalance. And I don't need it to trade back to this particular candle. Now I'm
66 00:12:04,350 --> 00:12:12,450 going to put it in for contrast. There you go. So it does trade to it. And that's fine. But I'm not looking at it that way. I'm looking at it from an
67 00:12:12,450 --> 00:12:22,200 institutional market structure. This needs to be rebalanced. If it's going lower, it's going to rebounds there. It just happens to have this old high back
68 00:12:22,200 --> 00:12:30,600 here, which would be classic market structure, where it retrace back to resistance broken turn support, that's fine and great. I don't subscribe to
69 00:12:30,600 --> 00:12:42,600 that. What I'm looking at is the importance of this candles high. Now back on maybe pips in 2010, I taught everyone to look at the daily highs and lows. And
70 00:12:42,870 --> 00:12:52,590 if you were to study those, you would start seeing these things. As I teach it, most students really drew no parallel to what I do, and teaching and mentorship
71 00:12:52,590 --> 00:13:00,270 and even on this YouTube channel. To those early days, when I used to prompt everyone look at the last last three days high and low. And look at the open and
72 00:13:00,270 --> 00:13:11,520 the closing price. Because if you would have been studying that you would have found the early observations that I had in 1992. So if you look at what's going
73 00:13:11,520 --> 00:13:20,790 on here, we're going to take this whole framework and drop down into an hourly chart. Alright, so here's the hourly chart on the British pound. Now, if you're
74 00:13:20,790 --> 00:13:31,410 looking at this timeframe, once we traded lower on this candle, when I see stuff like this, and it comes right back up, I immediately disregard that wick. I
75 00:13:31,410 --> 00:13:39,420 don't care about it, because it's running liquidity. What's it running all the stops below these relatively equal lows. When that does that and starts to trade
76 00:13:39,420 --> 00:13:49,950 down again, once we cross below it, that to me is a level that is not significant at all, it's insignificant. So it's irrelevant to me, and I block it
77 00:13:49,950 --> 00:13:56,190 out in my mind. So it'd be the same as what I toggled off the wicks. I'm not going to do that here, because I'm going to show you the importance of having
78 00:13:56,490 --> 00:14:07,650 those wicks now with what I'm teaching, but I disregard it. I pay no attention to it. Okay. The reason why is because this was a stop run, and we went through
79 00:14:07,650 --> 00:14:19,440 it anyway. So I don't look at this low as a return back to that low because it's support, broken turn resistance, because you'll see here, it never trades back
80 00:14:19,440 --> 00:14:31,230 to it. And this is the fallacy that classic support resistance or classic market structure denies you access to what I'm going to show you here. Now I talked
81 00:14:31,230 --> 00:14:42,870 about how the market reaches for liquidity. And I talked about how the market reaches for rebalancing imbalances. That's the institutional mindset. The key is
82 00:14:42,930 --> 00:14:54,420 understanding what the present narrative is. So is the market going down two rebounds or is it going down to tag sell stops? It's doing one of the other.
83 00:14:54,660 --> 00:15:03,390 That's it. That's why the markets dropping? It's not because there's more sellers than buyers. It's not an absence of buyers, it's not selling pressure.
84 00:15:04,260 --> 00:15:15,690 It's the markets going down to rebalance. And or going down for sell side liquidity or sell stops, the market doesn't care if you're in the position or
85 00:15:15,690 --> 00:15:27,480 not, it doesn't care if ICT is in the position or not. It's going to where the orders are going to be residing period is not going down to get sell stops, it's
86 00:15:27,480 --> 00:15:38,730 going to drop to go to a level to rebalance it. What is that? Well, once we broke this low here, what market structure from a classic perspective Do you
87 00:15:38,730 --> 00:15:51,690 have to lean on except for this little area here? You have this stuff back up here? So what if it doesn't go up there? Do you miss this trade? Apparently, so.
88 00:15:52,950 --> 00:16:01,500 But I don't miss those types of trades. I don't miss those opportunities, because I understand the institutional mindset behind market structure. So let's
89 00:16:01,500 --> 00:16:08,040 go into a great detail. This swing low here, what do you think was resting rate below that?
90 00:16:09,540 --> 00:16:19,650 Sell stops, the market has rallied trailing stop losses could be positioned right there. We also have that same thing I described on the daily chart, that
91 00:16:19,650 --> 00:16:30,480 big candle, a big bullish candle that's occurring right here, the same thing, but this is now a one hour candle. So there's an imbalance from this high to
92 00:16:30,480 --> 00:16:41,160 this low. It's all buying. So in this area, we have two things that the market from up here, once it breaks down, where is it likely to reach for? Well,
93 00:16:41,190 --> 00:16:50,520 there's an imbalance down here, they may want to rebalance and cover over top of this upclose candle, the market will likely deliver a down candle into that
94 00:16:50,520 --> 00:17:01,530 range. Okay. It's also conveniently enough a sell side liquidity pool where there is sell stops resting rate below that they're pulling there, they're
95 00:17:01,530 --> 00:17:11,400 converging. They're overlapping. Everybody has their same sell stop just below that low. if they haven't already trailed it up here and and stopped out. It's
96 00:17:11,400 --> 00:17:21,150 resting right below there. A lot of trending models on a fund level maybe using this level for a stop. I'm not trying to make the case that I know who it is.
97 00:17:21,150 --> 00:17:30,690 That's has a stop there. It's irrelevant. But my eye has been trained to look for these swing lows, look for areas of unbalance, and under the pretense that
98 00:17:30,690 --> 00:17:42,750 there is a narrative underway that this market is likely to go down. Because we've left this consolidation, we've done so in deciding Lee sharp price
99 00:17:42,750 --> 00:17:51,750 decline. And now we have the opposite of this candle here in the opposite of the daily candle I showed you what was an imbalance. We have that here with this
100 00:17:51,750 --> 00:18:02,880 down closed candle. So when you see things like this order blocks market maker liquidity zones, I don't know what liquidity zone is, but liquidity, London
101 00:18:02,880 --> 00:18:13,350 breakout, I don't do those. But kill zones voids. Yep, that's speaking from ignorance. And this imbalance, the market trades right back up into that
102 00:18:13,350 --> 00:18:21,030 imbalance then trades down, it does not go back to your classic support resistance idea. It doesn't go back to any other market structure idea there.
103 00:18:21,420 --> 00:18:30,090 There's no turning point that it comes back up to. So why did it just stop right there and go down and go right into that level right there and below that low.
104 00:18:31,110 --> 00:18:37,740 Now some of you are sitting there thinking, yeah, this is easy for him to talk about this. In hindsight, it's easy for him to say all this stuff now because
105 00:18:37,740 --> 00:18:47,160 it's already in the chart. Everybody's a genius, in hindsight that I met. Early on, when you're learning anything you have to learn from a hindsight
106 00:18:47,160 --> 00:18:57,540 perspective. But I want to take you into what I showed last night after I drop into the 15 minute time frame. But remember this little area for inbound to
107 00:18:57,540 --> 00:19:07,470 branch off into a 15 minute, right, here's the 15 minute time frame, and the price drives up into, again, one single candle, it's an imbalance. It's all
108 00:19:07,470 --> 00:19:19,080 selling. So the markets are wanting to go back up to that level to rebalance this, what is rebalancing actually referring to when the market delivers price
109 00:19:19,140 --> 00:19:32,280 and it's dropping to be efficiently delivered and offered equally as it passed through that range of price, it will likely want to go back up in there because
110 00:19:32,280 --> 00:19:44,610 it gives the opportunity for anyone that wants to buy in this area. Okay in that range. Buyers may not want to buy at a higher price or at a lower price because
111 00:19:44,610 --> 00:19:53,250 they have a fixed interest in a specific price range because they may be buying a currency or only willing to buy a currency at a specific price to do a
112 00:19:53,250 --> 00:20:01,350 transaction with another corporate entity. This is the part of the business that none of you really understand because you Think it's just support resistance,
113 00:20:01,470 --> 00:20:10,950 where you think it's, you know, order blocks, or market structure. It's, it's not just that stuff, you have to have an underlying narrative understood and
114 00:20:10,950 --> 00:20:19,320 what the markets likely to do, then you have a greater understanding. And then you can balance and compliment classic market structure. And now what I'm
115 00:20:19,320 --> 00:20:26,250 teaching you here institutional market structure. So what's occurring here the markets going right back up two rebounds, all the selling in here, trades up
116 00:20:26,250 --> 00:20:37,110 into it doesn't get into that old low notice that but then turns there drops down breaks these lows, comes right back up in last upclose. candle. What is
117 00:20:37,110 --> 00:20:44,790 that? That's what I teach here on this YouTube channel. That's your bearish order block. Why is it a bearish order block? because number one, it's acting in
118 00:20:44,820 --> 00:20:54,810 sides of the narrative where it created the high, it broke lower. We ran out liquidity King right back up into this level here. If I put a short term
119 00:20:54,810 --> 00:21:04,260 overbought oversold indicator, this area is going to be overbought, I don't need to see that. I know it's overbought, because from this high in this low,
120 00:21:05,370 --> 00:21:06,330 watching, I'll show you
121 00:21:11,940 --> 00:21:27,450 from this high, down to this low. Right there. If that's a range, or dealing range that we're in present study of, if you're watching it live from this high
122 00:21:27,480 --> 00:21:40,470 down to that low when we was trading right there, how much has it covered from the high to the low? A large percentage of it right, about 80% of it. Now, I'm
123 00:21:40,650 --> 00:21:51,810 eyeballing that, I'm not going to put the fifth one, I felt inclined to do so but I'll leave it to you to do it. That's about 80. if not more of a percentage,
124 00:21:52,080 --> 00:22:01,320 from this low to high. It's retraced all that and it went right above this short term high. What is it doing? It's going after the buy stops. So the markets only
125 00:22:01,350 --> 00:22:11,400 going up from this low up to that high to take out the bizstats then it drops hard. Is it drop just to some random level? No, that's that level that I showed
126 00:22:11,400 --> 00:22:29,040 you? perfectly. So when you see stuff like this joker that's coming from a dance of ignorance, there is no umbrella statement that market structure, answers
127 00:22:29,040 --> 00:22:38,520 everything. structure is not structured. There's two different forms of market structure, the classic retail perspective that Larry Williams has really made
128 00:22:38,520 --> 00:22:50,520 popular, and what I have taught early on, and then what I understood later on after that, which is how the markets really book, it runs for liquidity, or it
129 00:22:50,520 --> 00:23:00,090 runs to rebalance. That's it. It doesn't matter what your pattern or my pattern says, it doesn't matter what theology says about that particular market, okay,
130 00:23:00,090 --> 00:23:10,350 doesn't matter what the fundamentals are, okay, it doesn't matter. the opinion of CNBC anchors, it doesn't matter. What's what anybody says, it matters what
131 00:23:10,350 --> 00:23:21,090 the narrative is, right now, is it going lower to go down for stops or to rebalance? If that's not true, then it's going to consolidate or go higher. If
132 00:23:21,090 --> 00:23:30,750 you can't discern whether or not it's going to consolidate or go higher, then it's likely to keep going lower. So what is it going to reach for liquidity,
133 00:23:30,810 --> 00:23:41,640 which is sell side liquidity or sell stops, or it's going down to an area to overlap area where one single candle stands by itself. And that imbalance will
134 00:23:41,640 --> 00:23:51,090 be the draw on liquidity. Okay, so let's go over to video and I'll close this one. And you can hear me actually talk about this whole business here. And going
135 00:23:51,090 --> 00:24:07,590 down the 10 levels. 18 hours ago, almost now, alley chart, British Pound again, disregard this Wick here. So we have two areas of liquidity here, in here. And
136 00:24:07,590 --> 00:24:19,860 finally, on the cable, 15 minute timeframe, a lot of distortion when you have these wicks in here. So just kind of like imagine that this is not there. And we
137 00:24:19,860 --> 00:24:26,370 have a little imbalance there. We can see a trade up into that but it could really just reach in here too. I'd like that better than just touching that
138 00:24:26,370 --> 00:24:35,370 because that would be hitting this level but leaving the the gap entirely open.  Like that. I like the idea coming up to just getting above this candle high and
139 00:24:35,400 --> 00:24:36,900 rolling over and getting that