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2 |1 |00:00:03,090 ~-~-> 00:00:12,390 |ICT: Alright folks, welcome back. This is Episode Six in our ongoing ICT mentorship on YouTube, for 2022. And the market efficiency paradigm and
3 |2 |00:00:12,390 ~-~-> 00:00:26,610 |institutional order flow will be our topic for this evening. Alright, so how do we internalize price delivery? First, we do not trade patterns for patterns
4 |3 |00:00:26,610 ~-~-> 00:00:40,410 |sake. We do not trade indicator readings or momentum. We look to enter Long's where retail sells. We like to enter shorts, where retail buys. Usually, when
5 |4 |00:00:40,410 ~-~-> 00:00:48,180 |you hear me say something like that, or someone that's been trained by me speak like that. It sounds like well, you know, you're talking like you work for an
6 |5 |00:00:48,180 ~-~-> 00:00:59,910 |institution, you work at a bank, you know, you're you're trading retail to Yes, we are all operating through retail avenues to get to the marketplace. What I'm
7 |6 |00:00:59,910 ~-~-> 00:01:10,650 |teaching you is the internal dialogue of what we're doing when we're looking at price. We're not thinking like the collective that is commonly referred to as
8 |7 |00:01:10,650 ~-~-> 00:01:22,950 |the retail trader, because majority of retail traders lose, they have a failed logic, they don't have consistency, they don't have, well, longevity. So we want
9 |8 |00:01:22,950 ~-~-> 00:01:37,410 |to try to think and engage differently with price that is opposed to the majority of what retail analysis concepts, you whatever it is that you subscribe
10 |9 |00:01:37,410 ~-~-> 00:01:51,450 |to as a retail trader, all those things, unless they're rooted in basis of liquidity and overflow. It's made up, it's a religion. And I'm not here to argue
11 |10 |00:01:51,540 ~-~-> 00:02:05,160 |beyond that. That's what I have come to believe. And that's how I operate and my results, and the things that my students see, speak for themselves. We
12 |11 |00:02:05,160 ~-~-> 00:02:18,810 |anticipate price seeking opposing liquidity. Okay, so what does that mean? Well, if you're looking at this diagram, imagine if we could take price as a
13 |12 |00:02:19,950 ~-~-> 00:02:29,940 |conceptual idea. Doesn't matter what market it is. But let's just say there's two camps. There's the informed or smart money, and that's represented by this
14 |13 |00:02:29,940 ~-~-> 00:02:40,650 |small little circle over here. And then there's a larger collective, which is the speculative, uninformed money, there's a large influx all the time of new,
15 |14 |00:02:41,010 ~-~-> 00:02:49,500 |uninformed money coming in, because there's a large influx of uninformed money going out because they lose their account. They blow up whatever equity they
16 |15 |00:02:49,500 ~-~-> 00:03:01,650 |have in your trading account. It's going because of lack of discipline, and a flawed logic. Smart Money traders when they look at the marketplace, they're not
17 |16 |00:03:01,650 ~-~-> 00:03:16,320 |looking at secret trading indicators. Okay. There is no secret indicators. Just let me put that to bed right now. Now, there may be traders that have tools.
18 |17 |00:03:17,100 ~-~-> 00:03:31,560 |Okay, did they like to measure price action with? That's not like a stochastics? It's not like an RSI, it's not like a well, anything you find on a trading
19 |18 |00:03:31,560 ~-~-> 00:03:44,400 |platform list of indicators, okay? Those things are not reached for by informed money. What they're specifically looking at is time and price. The most
20 |19 |00:03:44,400 ~-~-> 00:03:57,450 |important thing is time. Because time, that is the most crucial element. So time of day is vital when we're engaging price. Retail doesn't really have any
21 |20 |00:03:57,450 ~-~-> 00:04:06,510 |understanding or affinity for time, except for the fact that they have time now to trade because they're in front of the computer, or they have time to look at
22 |21 |00:04:06,510 ~-~-> 00:04:16,350 |their phone while they're at work. And they're putting on trades. Okay? That's the extent of time when it comes to a retail average trader. Time for a
23 |22 |00:04:16,350 ~-~-> 00:04:28,380 |professional through the lens of smart money, time is crucial, because time of day, there are specific elements in a daily range that really build the
24 |23 |00:04:28,500 ~-~-> 00:04:39,690 |likelihood of volatility to come in, and also when short term reversals are likely to occur. Okay, so I mentioned in previous lessons that there's
25 |24 |00:04:39,690 ~-~-> 00:04:51,060 |algorithms that will start to gyrate and cause price to run at specific times of the day. If you were watching the E Mini markets that you saw it happen at four
26 |25 |00:04:51,060 ~-~-> 00:04:55,410 |o'clock. That was one of the times like even it was relentless today.
27 |26 |00:04:57,150 ~-~-> 00:05:12,570 |Smart Money so that we can make this real short today. Point, Smart Money looks to cannibalize this group of trader. So because they're typically wrong in their
28 |27 |00:05:12,570 ~-~-> 00:05:20,850 |directional bias in their stock placement, should they choose to use one because a lot of traders don't use a stoploss as a retail trader, because they're
29 |28 |00:05:20,850 ~-~-> 00:05:31,050 |afraid, they may expect the market to go lower. And they understand that the highs above where they're at if they're in a very small window of profitability,
30 |29 |00:05:31,290 ~-~-> 00:05:40,500 |unrealized profit, it means they're still in the trade. But they don't have a stoploss in now, Logic dictates that they should have a buy stop in to protect
31 |30 |00:05:40,500 ~-~-> 00:05:49,710 |her position in case the market screams against them. At least it limits the amount of equity loss. But they may look at an old high and say, Okay, I
32 |31 |00:05:49,710 ~-~-> 00:05:58,560 |understand that my stop should be above that. But because of their infancy, they have no idea where to put it above that high, they don't want to put it too
33 |32 |00:05:58,560 ~-~-> 00:06:07,080 |shallow, because it might go there and hit it and stop out there trade prematurely. And or they don't want to put it up too high. And then it spikes
34 |33 |00:06:07,080 ~-~-> 00:06:14,880 |through that reaches for them. And then it reverses and goes in the direction they're holding. So they take a big loss and get stopped out. So those are the
35 |34 |00:06:14,880 ~-~-> 00:06:27,720 |two conundrums that a retail trader falls in to that pitfall that trap. And maybe you're nodding your head and smirking thinking, man, I was there a lot. I
36 |35 |00:06:27,720 ~-~-> 00:06:36,510 |know. And I can admit back in the 90s 99 to 1993. That was what I was doing all the time. You know, I just didn't know what I was doing. And I was falling
37 |36 |00:06:36,510 ~-~-> 00:06:49,560 |victim to myself and just infancy not knowing. But the smart money traders are not looking at price with give me a pattern to trade off of, you know, bull flag
38 |37 |00:06:50,220 ~-~-> 00:07:02,100 |wedge pattern, something to that effect. They're looking at liquidity. What is the underlying narrative right now in the marketplace? Is it bullish? Is it
39 |38 |00:07:02,100 ~-~-> 00:07:11,040 |bearish? Is today's daily range going to go higher? But how's it gonna go higher? Is it likely to go lower to being the day first to sucker traders and
40 |39 |00:07:11,040 ~-~-> 00:07:20,100 |going short, run out sell stops, they can acquire long positions at and then rally going into the close or really into the afternoon? And that would be the
41 |40 |00:07:20,100 ~-~-> 00:07:32,820 |extent of their plan of action? And how does that speculative, uninformed money and its liquidity that it provides? How can they utilize that? That's the market
42 |41 |00:07:32,820 ~-~-> 00:07:44,550 |efficiency paradigm. It's efficient, for Smart Money traders to view the marketplace in that perspective, versus technical analysis. The mumbo jumbo
43 |42 |00:07:44,550 ~-~-> 00:07:53,490 |things that traders put on their charts, okay. And you can lock me in there too. Because the times where I'm trying to use the logic that I trade with, and if it
44 |43 |00:07:53,490 ~-~-> 00:08:04,320 |fails, I've done something wrong. I've interpreted price wrong. I thought something was in price. And it wasn't bear in it. Robbery, were top of it. And
45 |44 |00:08:04,320 ~-~-> 00:08:17,160 |there it is. And that's a loss. Everybody's going to have a losing trade. Okay. But I'm not looking at price with patterns on the sake of just trading for the
46 |45 |00:08:17,160 ~-~-> 00:08:26,850 |pattern sake. No, it's just because I think I see a pattern there. Because there's a misnomer that goes around trade what you see, well, just like the
47 |46 |00:08:26,850 ~-~-> 00:08:35,700 |trend is your friend, that trend is not your friend when it's at the end and it's reversing, okay. So there's always a rule to the rule, there's always an
48 |47 |00:08:35,700 ~-~-> 00:08:44,100 |exception to every role. Okay, and that's experience. But what had hopefully done in this model so far, and I promise, this is the end of the boring stuff,
49 |48 |00:08:44,100 ~-~-> 00:08:56,010 |we'll get into the nuts and bolts, and stripping everything down and placing components at their logical place in order so that way you can go into price
50 |49 |00:08:56,190 ~-~-> 00:09:06,780 |immediately. You don't need 18 months, you don't even need four months, immediate, I've received a ton of feedback and I appreciate all that, that you
51 |50 |00:09:06,780 ~-~-> 00:09:15,120 |all can go into the charts and see these things right away. And some of you actually started trading I'm not asking you to do that I'm not trying to inspire
52 |51 |00:09:15,120 ~-~-> 00:09:27,630 |you to do that. You need to study it more but that's how quick in different all this is. Okay, this is not your typical ICT, you know, the stale, boring stuff,
53 |52 |00:09:27,660 ~-~-> 00:09:37,020 |this is the things that really work in the marketplace. So with that minus continue. So I want to go a little bit more specifics about the fear about you
54 |53 |00:09:37,020 ~-~-> 00:09:37,560 |got that we
55 |54 |00:09:37,560 ~-~-> 00:09:47,850 |have a rules, what it looks like so that we understand exactly what it is and where it forms, because this is going to repeat every single time it's going to
56 |55 |00:09:47,850 ~-~-> 00:09:56,880 |be the same logic that I'm going to show you here. Okay. Do not try to fancy dances Okay, and try to turn them into some kind of a mentorship course, and
57 |56 |00:09:56,880 ~-~-> 00:10:07,020 |rename everything with your name and Don't do that. Okay, just take it for what it is. I already know people are going to try to take this and copy and make
58 |57 |00:10:07,020 ~-~-> 00:10:18,360 |courses on it. Okay. I've already given it to you for free. If it helps you, then God bless you. Okay, all I'm asking for is this appreciate the fact that
59 |58 |00:10:18,360 ~-~-> 00:10:28,920 |I've taken the time to put it out here for you. So the bearish ICT fair value gap. This is institutional order flow, and it's a pattern that you can see the
60 |59 |00:10:28,920 ~-~-> 00:10:43,110 |order flow actually coming into the marketplace. When you look at like, depth of market, okay. Or if you study volume profile, that's a religion. Okay. What
61 |60 |00:10:43,110 ~-~-> 00:10:58,890 |you're looking at is data. Yes. But your interpretation is a private interpretation. It's what you believe in, there may be a lot of other traders
62 |61 |00:10:58,890 ~-~-> 00:11:11,460 |that have a similar mindset about that very thing, but simply because you think that doesn't make it true. It doesn't. Okay. So what I'm trying to do is take my
63 |62 |00:11:11,460 ~-~-> 00:11:21,600 |students into the marketplace with a chart, a time based chart to get there, some out there will say, time based charts are useless. That's because they
64 |63 |00:11:21,600 ~-~-> 00:11:32,190 |don't know how to use a time based chart. Because algorithms the first element they operate under is time. Hello, quants. So we're looking at what does a
65 |64 |00:11:32,190 ~-~-> 00:11:43,260 |bearish ICT fair value gap look like? Well, if you take a look at this diagram, it's rather crude I know. But you have a run, preferably above some kind of old
66 |65 |00:11:43,260 ~-~-> 00:11:59,340 |high. So the first candle is the high. In the next candle is the extended low that goes below it. In the third candle is another continuation candle. But the
67 |66 |00:11:59,340 ~-~-> 00:12:14,010 |main important factors are this, it's a three candle formation. The first candles low has to be traded below on the immediate following candle. The next
68 |67 |00:12:14,010 ~-~-> 00:12:25,110 |candle has to trade with an extended low as well, that went below candle number two, but does not trade with a high that trades back to candle number one is
69 |68 |00:12:25,110 ~-~-> 00:12:36,870 |low. what that creates is this small little gap where one candle only traded from the range of the candle number one's low to candle number three is high. So
70 |69 |00:12:36,870 ~-~-> 00:12:48,270 |that little space that's occupied right there, what is actually occurring there is price is only being offered on the sell side there. So imagine if you're
71 |70 |00:12:48,270 ~-~-> 00:12:58,080 |painting your wall, your home, okay, and you take your role, or you put it in the paint and you put the paint up against the wall, and you roll down. Okay, at
72 |71 |00:12:58,080 ~-~-> 00:13:07,170 |first the first footer, so there's going to be an ample amount of paint delivered to the wall from your paint roller. But then as you keep rolling down
73 |72 |00:13:07,170 ~-~-> 00:13:17,580 |towards the floor, what will happen, you'll start seeing these little pockets that look really porous. Okay? What do you have to do to fix that, you just
74 |73 |00:13:17,580 ~-~-> 00:13:28,950 |change directions and start rolling the pink roller back up the same place you roll down. That's exactly what price does. There's an algorithm that delivers
75 |74 |00:13:28,980 ~-~-> 00:13:39,690 |efficient market delivery. You can argue with me all you want, you're not going to convince me I know it. If you go into price action with that market
76 |75 |00:13:39,690 ~-~-> 00:13:50,910 |efficiency, paradigm perception looking for this characteristic and price, I promise you you will never look at charts the same way again, it'll unlock a lot
77 |76 |00:13:50,910 ~-~-> 00:14:02,340 |of things we're going to move from the matrix and Neo finally sees the matrix as it really is in binary code ones and zeros. He he has clearly well that same
78 |77 |00:14:02,400 ~-~-> 00:14:09,330 |event is silly as it may sound ends up happening when you look at price action when you start looking at it from this perspective. So let's go back into that
79 |78 |00:14:09,330 ~-~-> 00:14:18,090 |analogy with this between these candles wellness candles high we only have cell site offers that's like taking the paint and applying it to the wall and drawing
80 |79 |00:14:18,090 ~-~-> 00:14:28,710 |down with the roller but now as you pull down there's little pockets right in here between this candles low and this candles high where price has not been
81 |80 |00:14:28,710 ~-~-> 00:14:32,280 |efficiently offered for buyers.
82 |81 |00:14:34,200 ~-~-> 00:14:44,010 |Why How is that working? Well we have sell side being offered here because the markets delivering lower prices it's offering continuously lower prices between
83 |82 |00:14:44,010 ~-~-> 00:14:53,910 |this candles low in this candles high to efficiently balance out that little inefficient area. at some future time the markets gonna want to trade back into
84 |83 |00:14:53,910 ~-~-> 00:15:07,170 |that area when it does You're bearish, that's a short signal. Okay, you can go short and sell there with the expectation that's going to start to move lower.
85 |84 |00:15:10,080 ~-~-> 00:15:19,500 |Optimal formations of the bearish ICT fair value get well we found after a run into by side liquidity. So it's not a matter of going into charts and looking
86 |85 |00:15:19,500 ~-~-> 00:15:30,120 |for this little gap all the time. This model I'm teaching you on this YouTube channel is meant for you to look for periods where price runs above an old high,
87 |86 |00:15:30,390 ~-~-> 00:15:38,760 |then it breaks down. And then you look for this pattern, this is what it looks like, you're not looking at anything prior to this candle has absolutely nothing
88 |87 |00:15:38,760 ~-~-> 00:15:49,350 |to do with anything except for the fact that we traded above and on high. That's a very simple logic isn't and the run above a single high, or multiple highs
89 |88 |00:15:49,350 ~-~-> 00:15:59,910 |like a double top. Okay, either one of those fits this criteria. So what you're looking for is a pool of liquidity of buy stops resting above these highs,
90 |89 |00:15:59,940 ~-~-> 00:16:11,130 |that's by side liquidity. Smart Money will want to trade up into that and go short. They may not be engaging above the high, they may miss it just like any
91 |90 |00:16:11,130 ~-~-> 00:16:20,400 |one of us that haven't been ready to take an order in place that in the marketplace, they may miss that. This is their saving grace right here, this
92 |91 |00:16:20,400 ~-~-> 00:16:28,890 |pattern. That's what smart money is looking for. They're looking for that right there. And then once they see that, they go in either with their limit order
93 |92 |00:16:28,950 ~-~-> 00:16:43,620 |market in something to that effect. And get short, and the stock would be about the high. Okay, there you go. Short and sweet, done. That is exactly what you're
94 |93 |00:16:43,620 ~-~-> 00:16:53,340 |looking for, for fair value get. So when you're doing your annotations and your charts, this is what you want to be doing all your back testing label number one
95 |94 |00:16:53,340 ~-~-> 00:17:03,870 |candle, the number two candle is always going to be where the gap resides. And in the number three candle gives you the lower end, the upper end of the fair
96 |95 |00:17:03,870 ~-~-> 00:17:14,100 |value gap is going to be the low of candle number one, the lower end of the fair value gap is going to be the high of kindling three in the difference between
97 |96 |00:17:14,100 ~-~-> 00:17:26,610 |candle number one's low in candle number threes high. That's the fair Degas. So the easiest entry would be trading just above candle Number three's high, you
98 |97 |00:17:26,610 ~-~-> 00:17:35,790 |can put a limit order right there and be done. Simple, don't have to worry about guessing where to put your limit order in. It's right there. Place your stop.
99 |98 |00:17:36,570 ~-~-> 00:17:49,620 |Great above can number one, or you can put it above candle number two. But while you're learning how to use this, that may seem like a lot of range. You want a
100 |99 |00:17:49,620 ~-~-> 00:17:58,710 |lot of range when you first start out. I'm assuming that all of you are brand new, you may not be, but I'm teaching it with that perspective in mind. Some of
101 |100 |00:17:58,710 ~-~-> 00:18:07,470 |you that have been with me for a longer time, you know how to reduce that stop. And I know hearing that by some of you that are new, you feel like you're being
102 |101 |00:18:07,470 ~-~-> 00:18:14,670 |slighted. Oh, you're holding back? No, I'm protecting you. Because I know already. Some of you already are going out there trying to treat life money. And
103 |102 |00:18:14,670 ~-~-> 00:18:24,510 |you may be reporting You're doing good. But you don't know what you're doing yet. Okay, just trust me. You got to practice and do a lot of back testing, then
104 |103 |00:18:24,510 ~-~-> 00:18:38,190 |demo it, then you'll get it. The bearish market structure shift. What does that look like conceptually? What you have the market trading higher, short term
105 |104 |00:18:38,190 ~-~-> 00:18:48,720 |level retracement that trades above an old high or the initial short term high that it trades above here. And then it breaks down. Once that low is broken,
106 |105 |00:18:49,080 ~-~-> 00:18:59,850 |that's when the new trade idea is now being birthed. You don't even know where you're getting in at yet. Until you go through this process I'm going to show
107 |106 |00:18:59,850 ~-~-> 00:19:12,870 |you right now. The market will see a price delivery of a rally above an old high or highs and then quickly shift lower. That's this right here. Now the
108 |107 |00:19:12,870 ~-~-> 00:19:22,140 |significance I'm placing on the term quick is linked directly to the term displacement. Okay, it's got to be energetic. It can't be a little lethargic
109 |108 |00:19:22,140 ~-~-> 00:19:33,990 |little move, it's got to show a real willingness to want to go lower and preferably close below that, if it does that, that to me is a little bit more
110 |109 |00:19:33,990 ~-~-> 00:19:34,680 |significant.
111 |110 |00:19:37,560 ~-~-> 00:19:47,610 |Whereas if we just go through this low, a little bit like a wick and come back up. That to me is not all that convincing. I want to see that it has absolutely
112 |111 |00:19:47,610 ~-~-> 00:19:59,130 |displaced and then a candle closed. And then we look inside this range here. So when you're looking at market structure shifts, this is all timeframes. So don't
113 |112 |00:19:59,130 ~-~-> 00:20:08,310 |think this is just the end intraday version of it, but I'm specifically dealing with intraday. So when we create that high, that high down to the low that
114 |113 |00:20:08,310 ~-~-> 00:20:16,560 |breaks the short term low here. So now we have that shift in market structure there right below that low. That is the displacement low. This is your
115 |114 |00:20:16,560 ~-~-> 00:20:26,640 |displacement high. So what's the big deal about that? Oh, you're just trying to add some words ICT sound smart that way, don't you know, it's conceptual ideas
116 |115 |00:20:26,640 ~-~-> 00:20:33,210 |being expressed. So what you have in between that range, that right there, you're getting hunting your fair value gaps, because that's exactly where it's
117 |116 |00:20:33,210 ~-~-> 00:20:46,350 |going to form. Don't take my word for it, every one of your examples are going to have this. Don't take my word, as the only thing to believe, go into your
118 |117 |00:20:46,350 ~-~-> 00:20:58,230 |charts, and you will be convinced of it in short order. Period. So if you're bearish, and you see price run about an old high, then it breaks below the old
119 |118 |00:20:58,230 ~-~-> 00:21:09,840 |high and takes out a short term low. Prior to that run above that short term low being broken. draw that out in time, that's your displacement low. And the high
120 |119 |00:21:09,840 ~-~-> 00:21:18,300 |is your displacement high. So that range between here and here, that's displacement? How do you know it's displacement? How it closes down here below
121 |120 |00:21:18,300 ~-~-> 00:21:31,410 |that low? Is it just a real short little drop below? It might have a fair value gap, but it also might be likely to go higher and create another high. So that's
122 |121 |00:21:31,440 ~-~-> 00:21:41,400 |this is the secret to here, knowing how we trade below that and if it's energetic, a lot of movement, big, big, beefy, bearish candle that closes low
123 |122 |00:21:41,610 ~-~-> 00:21:52,920 |below this level right there. Okay, if we have that soon as we have that candle form, start watching to see if it creates a fear of a gap in between this low in
124 |123 |00:21:52,920 ~-~-> 00:22:03,540 |this candles high or that range? Okay. That's exactly where the fair value gap to sell short will form. If there is no fair value gap in here, guess what? You
125 |124 |00:22:03,540 ~-~-> 00:22:13,380 |don't have a trade, you wait or go to another market? Because one of them is going to be there. Every single trading day. Okay. Every single trading day.
126 |125 |00:22:14,790 ~-~-> 00:22:31,320 |This pattern forms are you telling? Yes, I'm telling you just like that every single trading day, this pattern forms every single day, long and short. But you
127 |126 |00:22:31,320 ~-~-> 00:22:42,180 |have to look for it. With this process. Okay. Everything I teach obviously, is reversed the same way. So I'll just go through this a lot quicker, because this
128 |127 |00:22:42,180 ~-~-> 00:22:49,950 |is already a longer video than I wanted it to be. But both ICT fair have a gap. Again, institutional order flow pattern, and it's three candles formation. That
129 |128 |00:22:50,190 ~-~-> 00:23:01,260 |candle here is number one, the second candle here and the third candle there. Candle number one tie. That is the low of the fair value gap. Candle Number
130 |129 |00:23:01,260 ~-~-> 00:23:13,530 |three's low is the high of a fair value gap. Candle number two is where the fair day gap will be formed. So that is your fair value gap and everything you would
131 |130 |00:23:13,530 ~-~-> 00:23:22,290 |expect to see in form of a market run below an old low or multiple lows for sellside liquidity. Once it starts trading higher and takes out a short term
132 |131 |00:23:22,290 ~-~-> 00:23:31,590 |high that's not being shown here takes I'm showing you the pattern itself. This is what you're looking for. Okay, this separation between three candles, that's
133 |132 |00:23:31,590 ~-~-> 00:23:42,330 |the criteria. You have to blend in the logic of a market structure shift that's bullish. So what does that look like you have a market trade below no low and
134 |133 |00:23:42,330 ~-~-> 00:23:52,770 |maybe go a low another leg lower and create a run into sell stops. Once that occurs, then you're looking for a run higher, that takes out the short term high
135 |134 |00:23:53,280 ~-~-> 00:24:02,850 |and it closes above it with an energetic displacement hired. Once you see that, then you have a trade idea B and birth you don't have a trade entry yet, until
136 |135 |00:24:02,850 ~-~-> 00:24:13,830 |you determine if it has a fair value gap. Where does that reside? Between the displacement high and the displacement low in between break before the market
137 |136 |00:24:13,830 ~-~-> 00:24:24,270 |structures broken foolishly, and the low that ran into the sell stops. That is your range. This is exactly where you're looking for a fair Vega.
138 |137 |00:24:25,920 ~-~-> 00:24:37,770 |So in that range, that's where you're bullish fair value got resides if there isn't one there, you don't have a trade. Is that not specific and clear? It's
139 |138 |00:24:37,890 ~-~-> 00:24:47,610 |perfectly illustrated. There's no ambiguity to it. It's exactly the logic you're going to use going forward. It does not change. It doesn't mutate in anything.
140 |139 |00:24:47,730 ~-~-> 00:24:53,820 |You don't bring something else into it. You don't add something else. That's some other educators taken my stuff and twisted it up and tried to make it
141 |140 |00:24:53,820 ~-~-> 00:25:03,120 |something something new and they created themselves. No. This is what you're supposed to be doing. If you do anything other than this, you're not going to
142 |141 |00:25:03,120 ~-~-> 00:25:15,750 |get the results you're looking for. And you're not going to find my ICT fair value. Okay? Alright, so let's go into the price action. You survived, you made
143 |142 |00:25:15,750 ~-~-> 00:25:25,860 |it here. So here we have the 15 minute time frame from today, this is the E Mini NASDAQ into the 15 minute time frame. This is where I tell you to start your
144 |143 |00:25:25,860 ~-~-> 00:25:40,170 |Bellwether chart, naked chart. Okay, pause the video and look and see if you see anything of any importance. Which swing high, would you anchor? Where is air a
145 |144 |00:25:40,560 ~-~-> 00:25:55,200 |stop run on by stops? When you're ready to listen to the rest of the video, unpause the video some of you never pause the video. Alright, so we have 830
146 |145 |00:25:55,200 ~-~-> 00:26:06,150 |marked here. Okay, very specific right element of time. 830. Why? Because there's news that comes out. Okay. employment data came out today. So 830 the
147 |146 |00:26:06,150 ~-~-> 00:26:16,050 |market? From that point on here, look to the left, what do you see? What's the first swing high income to read there? Is that hard? Was that? Was that
148 |147 |00:26:16,050 ~-~-> 00:26:32,250 |complicated? No, very simple. So this high here, draw that out in time. And you'll get this right here. Okay. But watch. With this run right there on a 15
149 |148 |00:26:32,250 ~-~-> 00:26:44,550 |minute timeframe? What do you do with it? Well, you start stripping down from a top down five minute, four minute, three minute, two minute one. So once you
150 |149 |00:26:44,550 ~-~-> 00:26:53,940 |have this level on your chart, when a 15 minute time frame, you dropped down to your five everything's transposed from the 15 to the five minute, you can see it
151 |150 |00:26:53,940 ~-~-> 00:27:06,870 |trades above it here. And the market starts to trade lower. When it's trading lower in here. You're going down into what? The four minute. Here we have a
152 |151 |00:27:06,870 ~-~-> 00:27:17,520 |here. Is there a fair value gap in here yet? Nope, there's one right there. See that? Right there. So we traded below this swing low, here's a fair value get
153 |152 |00:27:17,520 ~-~-> 00:27:29,010 |right there, you can enter there, right on this candles high, you can go short there, what's the rules? You remember what the rules were, you can put your stop
154 |153 |00:27:29,010 ~-~-> 00:27:45,450 |above this here, or this swing high, there's a swing high right there. Candle number one with a swing high to hit your stop. No, this might be more than
155 |154 |00:27:45,450 ~-~-> 00:27:57,960 |you're willing to absorb. But there's micros, you only trading $2 per handle there. It's not $20 per handle, okay, or for ticks, it's $2 for each tick or 50
156 |155 |00:27:57,960 ~-~-> 00:28:11,400 |cents each tick. So that's not a lot of money being rushed there. But I want to go down and really fine tune it. So I'm dropping down through all the timeframes
157 |156 |00:28:11,400 ~-~-> 00:28:24,420 |54321. And if I'm being completely honest with you, I have those charts all open at the same time across my desk. So I'm constantly referring to all of them. Now
158 |157 |00:28:24,420 ~-~-> 00:28:37,800 |you can do that cycling through rather quickly. And just look for the form. In the two minute chart, you don't have a fair value gap in here until there as
159 |158 |00:28:37,800 ~-~-> 00:28:53,550 |well, same entry. And you can put a stop there as well. In on the one minute chart, we have the run here, the break below the short term low here. The fair
160 |159 |00:28:53,550 ~-~-> 00:29:06,510 |value gap, trade up into that and look how many times it gives you a chance to get in this candle that's 123 then it continues even lower. So you're getting a
161 |160 |00:29:06,510 ~-~-> 00:29:18,300 |really, really tight entry there. Now, some of you going to say Ah, yes guys talking about hindsight. I got you covered. I actually went
162 |161 |00:29:18,300 ~-~-> 00:29:32,790 |in and traded this today on trading view. And you'll see me entering right here and writing down and taking out my exits below an old low. But I'm going to also
163 |162 |00:29:32,790 ~-~-> 00:29:43,830 |teach you how you can use the model here and use the exit strategy I use today for external range liquidity or something new. So let's go to trading view.
164 |163 |00:29:44,520 ~-~-> 00:29:53,460 |Alright, so I'm going to kill two birds with one stone here. I don't use the replay button. This is gonna be the first time you've ever seen me use it, but
165 |164 |00:29:53,460 ~-~-> 00:30:05,700 |it's only for the purpose of teaching. How you if you can't watch live data. Okay, Just use this, I guess is the best thing you can, I guess have as an
166 |165 |00:30:05,700 ~-~-> 00:30:18,060 |alternative. But also, I'm not sure if I mentioned this in the past. But if you are going to TradingView COMM And you're pulling up the symbol n q, H 2022. And
167 |166 |00:30:18,060 ~-~-> 00:30:26,160 |you're going into a one minute chart, the data is delayed here. And to be quite honest, I don't recall if it's 10 minutes or 20 minutes, I don't know exactly, I
168 |167 |00:30:26,160 ~-~-> 00:30:36,630 |don't remember what the delay was. But I pay the $4 a month subscription rate to get the E Mini data and also have a professional account. So I'm not sure if
169 |168 |00:30:36,630 ~-~-> 00:30:45,090 |that $4 A month is because I have a professional account. Or if it's just $4, for anyone, so you'll have to investigate yourself to see if that's something
170 |169 |00:30:45,090 ~-~-> 00:30:55,590 |you want to do. You don't need to have that data. While you're learning. Okay, you can use this function here. So while I do have real time data, because if I
171 |170 |00:30:55,590 ~-~-> 00:31:06,870 |didn't, you'd see like little arms D up here, letter D. that would basically communicate to anyone that would see the chart that it's a delayed data. This is
172 |171 |00:31:06,870 ~-~-> 00:31:20,280 |live data, and I have it scroll to this morning for February 3 2022. And I have my chart delineated with the 15 Minute high with that level. And I'll show you
173 |172 |00:31:20,280 ~-~-> 00:31:26,730 |this and then we'll zoom back out to a 15 minute chart, we see everything as it was because I'm going to show you there was actually a trading entered on this
174 |173 |00:31:26,730 ~-~-> 00:31:36,780 |today. But you want to have a vertical line delineated on trading view. And the way you do that is simply go in here, pick the vertical line, and drop it right
175 |174 |00:31:36,780 ~-~-> 00:31:48,240 |there at 30. And there it is. Okay. So for the replay button, and I feel weird, just doing this because I just don't do it, but I have to do it because I know
176 |175 |00:31:48,240 ~-~-> 00:31:59,130 |students need this resource while they're learning, okay. But I, I don't use this my mentorship that paid me that get education knows I never even use this,
177 |176 |00:31:59,160 ~-~-> 00:32:07,080 |okay, but I'm showing you. So that way you can back test and practice and look at price action in a way where it means something more than just looking at a
178 |177 |00:32:07,080 ~-~-> 00:32:21,930 |static chart. Alright, so it started at 830. Our, our line here is at that 15 minute high. So what we're expecting is a run above that high. Okay. And I'll
179 |178 |00:32:21,930 ~-~-> 00:32:30,480 |keep it kind of quick, I don't want to spend too much time with this. So clicking the play button, we're running above a short term high right here,
180 |179 |00:32:30,510 ~-~-> 00:32:37,050 |there's a fair day get right there hit that. Now watch, it should sell off. That's not what I want. I want to use this high back here. But if you're a
181 |180 |00:32:37,050 ~-~-> 00:32:47,700 |scalper, you could take that low out right there. And that would be a trade there as well. But for the daily range, which is much more significant. I'm
182 |181 |00:32:47,700 ~-~-> 00:32:57,690 |using the 15 Minute high, I'm bearish. On day, I'm expecting lower prices, because we've already went up a lot on the daily chart. So now, if you're
183 |182 |00:32:57,690 ~-~-> 00:33:04,500 |waiting all day, you might look at this and say, Oh, I missed it. There's nothing for me to do. Don't think like that. Okay, because the equity market
184 |183 |00:33:04,590 ~-~-> 00:33:17,670 |opens at 930 stock markets start getting really busy and volatile around that timeframe. And we're coming up on it in a few minutes here. And usually not
185 |184 |00:33:17,670 ~-~-> 00:33:29,040 |always, but usually the first run at 930 is opposite to what the real move you want to be doing not every time now here here's a 930 volatility without crazy
186 |185 |00:33:29,040 ~-~-> 00:33:41,220 |gates. Okay, it's creating a low with another low here. So there's what what's building underneath that sell stuff traders are being induced into thinking
187 |186 |00:33:41,220 ~-~-> 00:33:53,520 |long, trades go long go long go buying, get in there and go high. buy low sell high, right? But it's it's sloppy in here. But it's keeping these lows over here
188 |187 |00:33:53,520 ~-~-> 00:34:07,860 |intact. Above these highs, that's where my interest is. Okay. So I don't have a trade until we get up above this level there. And this is on the one minute
189 |188 |00:34:07,860 ~-~-> 00:34:08,280 |chart
190 |189 |00:34:16,349 ~-~-> 00:34:29,249 |Okay, small little shallow run. We want something that's going to push through it. No fair value got found anyway. Okay, I just pause the right there. Now look
191 |190 |00:34:29,249 ~-~-> 00:34:41,189 |at this initial poke above that high that we've drawn a line on. It went above it. It went down. Yes. Did it create any fair value gaps in it? No, every candle
192 |191 |00:34:41,189 ~-~-> 00:34:52,739 |overlaps. There's new gaps there. Okay. There's also no swing low taken out. So there's nothing in here yet. Now we have a higher high running above this high
193 |192 |00:34:52,769 ~-~-> 00:35:01,409 |and the high we're looking at on the 15 minute timeframe which is denoted by that horizontal line. Right there. Now we have the lowest likelihood, we if
194 |193 |00:35:01,409 ~-~-> 00:35:12,989 |we're watching it live, we're waiting to see does it break lower, if it breaks lower, where is there a swing low, right there. So if we can trade down below
195 |194 |00:35:12,989 ~-~-> 00:35:23,669 |that swing low, and soon as it does that book in the highest tide forms, and that low, see if there's a fair bet you got the forms
196 |195 |00:35:28,980 ~-~-> 00:35:43,830 |right there we went below it. After taking up the high, here's your number one candle, the number two candle and the number three candle. So there's your gap
197 |196 |00:35:43,830 ~-~-> 00:35:57,030 |right in here. So if it trades back to this candles High Plus, I don't know, one handle, or one, tick me two ticks, whatever, whatever you believe is the ideal
198 |197 |00:35:57,030 ~-~-> 00:36:07,380 |entry for you. The easiest one that is just go one tick. Above that it removes all doubt on there's no guesswork there. There it is. And where's your stop loss
199 |198 |00:36:07,380 ~-~-> 00:36:16,710 |going to be a little behind of candle number two, where you can use the book, candle number one, which creates a swing high. Okay, whichever one you can
200 |199 |00:36:16,710 ~-~-> 00:36:27,030 |afford, and allow you to put the trade on. Some of you are going to look at this I was just too much risk. Okay, then don't take the trade. I'm just I'm giving
201 |200 |00:36:27,030 ~-~-> 00:36:28,110 |you a model that works.
202 |201 |00:36:35,040 ~-~-> 00:36:43,200 |Boom, right there, that candle. If you had a limit order right there, that would trip you in going short. And your stop would have to be above here
203 |202 |00:36:48,630 ~-~-> 00:36:57,810 |another one right there. There's your second entry right above this candle here that's entering that your limit we're getting in go short, same stop.
204 |203 |00:37:03,450 ~-~-> 00:37:17,340 |Third, opportunity almost completely closes in all that range right there. See that? Right there. If you see that live, it feels like it's gonna keep going
205 |204 |00:37:17,340 ~-~-> 00:37:28,290 |higher, because this candle at one time, when it was at the high was all green in bold. You need to trust and train yourself to look at this pattern as it's
206 |205 |00:37:28,290 ~-~-> 00:37:40,230 |forming. Because once you see dozens of it occurring, it changes your perspective. You don't get scared. In fact, it's fascinating to anticipate,
207 |206 |00:37:40,230 ~-~-> 00:37:53,010 |okay, it went here. So now it's going to go lower. So at that point, right there to entry from this candles low to this candles high? Where's about 50%? That
208 |207 |00:37:53,010 ~-~-> 00:38:04,470 |right here, right? So before we go any further, where do we take our profits? Well, you have a fear of a gap right there, right? See that? Same thing, just
209 |208 |00:38:04,470 ~-~-> 00:38:16,410 |going up candle number one, it's high. Candle number two, can number three, the low. The range between Kill number one's high in the third candles low. That's
210 |209 |00:38:16,410 ~-~-> 00:38:26,490 |your fair value gap. So if you're selling short up here, you can buy it back below here, because you're below 50% of the range that range from high to low.
211 |210 |00:38:26,670 ~-~-> 00:38:37,080 |You're at a discount down here. So there's your first target. Remember, there's equal lows down here I was telling you about what's below that sell stops. So
212 |211 |00:38:37,080 ~-~-> 00:38:47,970 |you want to be taking profits here. And or here. This is ideal. Okay. Let's go back and watch the rest of it
213 |212 |00:38:54,210 ~-~-> 00:39:02,370 |right there, that's it. These are minute candles. So you're selling short here, or maybe you entered on the first one here. That's minute one. So one minute,
214 |213 |00:39:02,370 ~-~-> 00:39:17,730 |two minute, three minute, four minute, five minutes, six minutes, 789 1011 minutes. And you have 1020 3040 5060 We'll call it 60. We'll just call it 6060
215 |214 |00:39:17,730 ~-~-> 00:39:36,600 |handles in minutes. Okay. That's literally over $1,000 in a matter of time that would probably longer spent for someone that smokes a cigarette. Think about
216 |215 |00:39:36,600 ~-~-> 00:39:40,740 |that. If you are going to hold it
217 |216 |00:39:53,909 ~-~-> 00:39:55,829 |focus can below these lows down here. Okay.
218 |217 |00:40:15,930 ~-~-> 00:40:29,070 |Trust the bias. That type of move right there is intended to upset traders and get out of the trailer stop loss to short and aggressively, they get knocked out
219 |218 |00:40:29,070 ~-~-> 00:40:39,720 |rate for the big move comes down takes out the lows down here. So we're looking at right in here, well, let's look for a 14 six ad
220 |219 |00:40:54,780 ~-~-> 00:41:07,110 |there it is, now is that a lot of time getting short here, weathering some of this, you already took first partial down here. So even with this pulling back,
221 |220 |00:41:07,410 ~-~-> 00:41:18,810 |your stop stays here, you use the first partial to kind of like quench that desire to roll your stop, don't do that. If you do that, you're probably gonna
222 |221 |00:41:18,810 ~-~-> 00:41:27,450 |get stopped out because you don't have the understanding or the experience and know where to place a protective stop while it's being trailed. Once it takes
223 |222 |00:41:27,450 ~-~-> 00:41:35,490 |this low out down here, and if you want to hold on to position, then you can roll your stop to here, but not before. Why? Because you've taken out a
224 |223 |00:41:35,490 ~-~-> 00:41:46,950 |significant intermediate term low, this low, that is high on a one minute chart. That's an intermediate term, price swing. So it's taken out here. But it's also
225 |224 |00:41:46,980 ~-~-> 00:42:00,690 |a full target for selling short up here and getting out down here. So what was the rough price level we used on let's look at the high here 14 out what is
226 |225 |00:42:00,690 ~-~-> 00:42:22,110 |called 14,800 Just for the sake of the math. So 100 100 handles is 14,700. And then we have the EDI 14,006 80. So 120 handles, that's a significant price move
227 |226 |00:42:23,580 ~-~-> 00:42:36,960 |using exactly what I've taught in this model. Now, for those out there that say Oh, this replay button, he uses the replay button. That's the first time in make
228 |227 |00:42:36,960 ~-~-> 00:42:48,360 |sure you remember the date. Because that's the first time you see me ever do Market Replay on trading view. So if you look at this area in here, I'm going to
229 |228 |00:42:48,360 ~-~-> 00:43:02,640 |show you paper trading account. Oh, I said we're going to talk about that. Here is the account history. You go to time put ashore on let's take a look at where
230 |229 |00:43:02,640 ~-~-> 00:43:23,490 |that actually occurs on the chart. I'll show you the execution right there. To minis. 14,007 92 and a half. And I think I was reading that wrong down here
231 |230 |00:43:23,490 ~-~-> 00:43:36,660 |because I was showing you the exit close the short position yet. I read it wrong. Sorry. So the entry price here selling short two minis at 14,792 and a
232 |231 |00:43:36,660 ~-~-> 00:43:58,560 |half using the fair value gap holding on to it. First partial here 14,006 75. And then the limit order I had here was 14,006 47. So how does that look on the
233 |232 |00:43:58,560 ~-~-> 00:44:12,570 |grand scheme of things. Getting short here with that logic below the cell stops down here in the limit order there. And hopefully you've got something from
234 |233 |00:44:12,570 ~-~-> 00:44:23,190 |this. And you've seen that there is obviously more to it than just fluff. It keeps repeating how many examples have you seen already, since I started
235 |234 |00:44:23,190 ~-~-> 00:44:33,210 |teaching this? It's there. And these are the two. This is the first order covered and this is the second one, okay? Don't look at this and say oh my
236 |235 |00:44:33,210 ~-~-> 00:44:43,200 |goodness, he's got a 52% return in one day on first trade. That's nothing. That's nothing. But I don't want you to think and that's what you can do. Okay.
237 |236 |00:44:43,470 ~-~-> 00:44:56,280 |Don't think that please don't think that at all. All I want you to do is practice on this logic. It's a simple process. So now in closing, I revisited
238 |237 |00:44:56,280 ~-~-> 00:45:07,530 |the idea of this high to that low That's your range. Okay? If you put a Fibonacci on that. And I tell you, I wish I had this stuff, and I was coming up.
239 |238 |00:45:09,630 ~-~-> 00:45:18,900 |Coming in here for free LOOK AT THIS. So we have 50%. That's your equilibrium. So everything above that price level, because this low to that high, that's our
240 |239 |00:45:18,900 ~-~-> 00:45:32,310 |price run. And 50% Below it is discount. So there's your little fear Bay get right there, you see that? Right there? That's your target going short there.
241 |240 |00:45:33,300 ~-~-> 00:45:42,480 |But this is internal range liquidity because its internal, relative to this low in this high that range. So it's in the middle of that range, which makes it
242 |241 |00:45:42,480 ~-~-> 00:45:55,410 |internal range liquidity. What is the stops below these lows down here? External range liquidity. So partials internal range,
243 |242 |00:45:57,449 ~-~-> 00:46:11,999 |external range, close your trade. Very simple logic in it. Is there a lot of moving parts that are confusion? Simple, isn't it? You may still have questions,
244 |243 |00:46:11,999 ~-~-> 00:46:21,689 |because you may be entirely brand new to charting and trading, that's normal. But by practicing and following along in this in this video series, it's an
245 |244 |00:46:21,689 ~-~-> 00:46:29,639 |ongoing mentorship, it's not going to stop next week, okay? This will help you understand. But I have to give it to you in bite sized pieces, because it could
246 |245 |00:46:29,639 ~-~-> 00:46:40,259 |be too much. You know, it's not going to be meaningful to you. But the logic hopefully even if you don't understand what I'm drawing you to in your own
247 |246 |00:46:40,259 ~-~-> 00:46:48,569 |chart, like you can't find it yet on your own chart. I'm showing you exactly where it forms. And is every example I've shown you happening in the time of the
248 |247 |00:46:48,569 ~-~-> 00:47:03,329 |day, the same way each time. And is it performing as I taught it? Yes. That's a model. That's a trading plan. That's an executable idea that you can go in and
249 |248 |00:47:03,329 ~-~-> 00:47:12,959 |engage with a demo account. And over time, you get good at this, you determine what you want to do with it. I'm never going to say go and trade live money with
250 |249 |00:47:12,959 ~-~-> 00:47:23,459 |it. But I already have people already to have been trading for a while. They're a little bit more versed in some of you if you're brand new, it's okay. But
251 |250 |00:47:23,789 ~-~-> 00:47:32,189 |traders that have been doing live been trading for a while. This really resonated with them. And they could see it and I went in there this week. And
252 |251 |00:47:32,189 ~-~-> 00:47:43,589 |they were catching trades, real trades. And like I said, I don't want the credit for that. But I already know this stuff works. It's sending me emails telling me
253 |252 |00:47:43,589 ~-~-> 00:47:51,179 |that this is amazing. It's great. Please don't do that. You don't need to do that. I already know it works. I'm giving it to you. So that way you can be
254 |253 |00:47:51,179 ~-~-> 00:48:03,119 |fascinated by it. Okay, this is just one model of dozens that I have. And this is the stripped down version. So hopefully, you find insight and obviously you
255 |254 |00:48:03,119 ~-~-> 00:48:11,459 |benefit from following and if you don't, you know, I'm sorry, I didn't scratch that itch for you. I'm sure if you study other things in my YouTube channel,
256 |255 |00:48:11,459 ~-~-> 00:48:18,389 |you'll probably find something else that tickles your fancy until I talk to you next Tuesday. Enjoy your weekend and be safe