ICT YT - 2024-08-07 - ICT 2024 Mentorship - Lecture 03-summary

Summary

ICT discusses various trading strategies and techniques, emphasizing the importance of understanding price action, identifying specific patterns, and managing trading risks. He highlights the significance of tape reading, backtesting, and journaling to develop a trading plan and increase chances of success. ICT also emphasizes the importance of identifying high-probability trading opportunities, managing emotions, and developing a disciplined approach to trading. Additionally, he discusses the importance of market liquidity and how it relates to gap analysis, and encourages his son to work hard and adopt the right mindset to succeed in trading.

Action Items

[ ] Caleb to determine his preferred start time for trading the morning session

[ ] Caleb to focus on trading the morning session as part of his mentorship

Outline

# Trading strategies for the afternoon session.
- ICT explains how to trade in the afternoon session, focusing on the 7am-11am New York time window.
- ICT provides rules for trading in the afternoon session, despite Caleb being the main focus for the morning session.

# Trading Forex with a focus on using calendar events for market drivers.
- ICT explains how to trade bond options with a focus on the 1pm Eastern Time release.
- ICT emphasizes the importance of self-learning and not worshiping him as a hero or guru.

# Trading strategies and finding one's own approach.
- Ict teaches specific trading strategies, but students struggle to implement them.
- ICT emphasizes the importance of understanding market movements and finding a trading approach that fits your unique schedule and abilities.

# Trading strategies using price action and intervals.
- ICT pushes Caleb to focus on morning sessions, with afternoon and London sessions also having unique characteristics.
- ICT teaches specific elements of short-term trading, day trading, swing trading, and ultra-short term scalping on his YouTube channel.
- ICT emphasizes the importance of real-time price action and removing ambiguity in the markets, which are not random or rigged.
- The speaker explains the importance of identifying relative equal highs and lows in the market, which are linked to new day opening gaps.
- The speaker highlights the difference between a new week opening gap and a new day opening gap, and how they are used in the algorithm.

# Using one-minute charts for trading and annotating them with lines to track price movements.
- The speaker teaches their son how to trade and make money in the index markets.
- The speaker uses a one-minute chart to analyze price action and identify potential trading opportunities.

# New day opening gaps and their significance in trading.
- ICT teaches that new day opening gaps are important for trading, especially when they form at 7am EST.
- ICT highlights the difference between sell side delivery and sell side liquidity, and how it affects gap trading.

# Using new day opening gaps for trading reference points.
- ICT explains New Day opening gaps, their life cycle, and how they can act as magnets.
- The speaker annotates their chart with important market information, including date, high/low, and consequent encroachment.
- The speaker uses a spiral notebook to keep a running log of new day opening gaps, with labels for each market and trading day.
- ICT explains new week opening gaps as a life cycle of five weeks, sensitive still six months away.
- Creating a layout with new week opening gaps helps traders quickly reference market levels without cluttering the chart.

# Trading and market analysis using fibonacci levels.
- ICT explains why a gap in the market is not equilibrium, using a trading range as an example.
- ICT highlights key levels in a busy market, anticipating large range expansions.

# New day opening gaps and their significance in trading.
- Ict identifies a rallying pattern, considering levels important for 5 days.
- The speaker is showing the audience how to use a specific chart pattern to predict market movement.
- The pattern involves identifying new day opening gaps and analyzing their proximity to the current market price.

# Identifying market inefficiencies and predicting price movements using gaps and other technical analysis tools.
- The speaker discusses the use of gaps in the market and how they are filled, citing examples of buy side imbalance and liquidity voids.
- The speaker criticizes other trading books and courses for not addressing the concept of gaps and their role in market movements.
- ICT explains how to identify levels of support and resistance using consecutive crochet, midpoint, and highest and lowest levels.
- ICT emphasizes the importance of clustering and gravitating towards levels of support and resistance, especially when anticipating new day opening gaps.
- ICT emphasizes the importance of identifying critical times and conditions in the market, where the market is more likely to behave in a predictable manner.
- ICT highlights the difference between new day opening gaps and new week opening gaps, with the latter having more impact on swing trades due to the weekend digestion and Sunday evening price action.

# Market manipulation and predicting price movements using gaps.
- ICT claims to have a unique ability to predict market movements by understanding traders' fears and doubts.
- Trader identifies new day and week opening gaps as potential areas of support.

# Predicting market movements using engineering liquidity and relative equal highs/lows.
- ICT teaches market-generic strategies that work until markets are entirely torn down.
- ICT predicts price movements based on relative equal highs and lows.

# Using new day opening gaps and new week opening gaps for trading.
- ICT explains why new day opening gaps are important for traders, as they provide a larger draw on liquidity.
- ICT demonstrates how to use moving averages and stochastics to identify potential trading opportunities in the context of new day opening gaps.
- ICT explains how to use "magnets" (price patterns) to predict market movements.
- By mapping and tracking these patterns, traders can gain a unique perspective on price action.

# Using ICT signals and following protocols for efficient trading.
- ICT emphasizes the importance of sticking to established trading protocols and not reinventing the wheel.

# Trading and investing using ICT's principles, with emphasis on identifying and capitalizing on market inefficiencies.
- ICT: Street money (dumb money) has a herd mentality, which can be used to my advantage.
- ICT: My wife's perspective on Bitcoin is an example of Street money, which I can exploit for profit.
- ICT predicts others will attack him to deflect attention from his success.

# Algorithmic trading and market manipulation.
- ICT argues that retail traders are consistently underestimating the power of algorithms in financial markets.
- The algorithm uses historical data to make predictions, not just random guessing.
- Liquidity is engineered to create highs and lows, not just based on buying and selling.
- Wait for bond auction setup for potential breakout move without morning news drivers.

# Trading strategies and the importance of understanding market dynamics.
- ICT emphasizes the importance of consistently making 5-10 handle trades in the S&P or NASDAQ before attempting to hold on to a trade for a longer price move.
- ICT emphasizes the importance of liquidity and relative highs in trading.
- ICT warns against relying on copycat strategies or signal services for success.

# Trading and investing with a focus on following rules and processes for success.
- ICT emphasizes the importance of trusting oneself rather than relying on others for success in trading.
- He encourages listeners to follow his rules and processes for at least a month to see results.

# Holding onto trades longer, using different entry models.
- The speaker identifies a specific pattern in the market, which they call "one," and uses it to anticipate price movements.
- The speaker emphasizes the importance of patience and waiting for the right moment to trade, rather than trying to trade based on generic market analysis.
- The speaker shared their strategy for holding on to trades longer, including using a higher time frame chart to identify larger price runs.
- The speaker demonstrated their approach by showing the listener their entry, stop, and limit orders in real-time.
- The speaker discusses the importance of holding onto trades for longer periods, rather than just focusing on short-term gains.
- The speaker's hyperactive mindset makes it difficult for them to sit in trades for extended periods, but they still try to find ways to engage with the market.

# Identifying high probability relative equal lows for trading.
- Trader seeks trades with potential for 100 handles or more, using analysis to determine feasibility.
- ICT uses the bond auction at 1 o'clock as a go-to for fueling a run into the downtrend.
- ICT teaches students to refer to previous session's action to identify relative equal lows, meeting a filter criteria for high probability trading.

# Trading mindset and strategies for holding trades longer.
- The speaker discusses the importance of identifying a reason to hold onto trades longer, such as a breakout beyond normal range.
- The speaker emphasizes the need to have confidence and not be anxious about taking trades, even if they are at their biggest profit point.
- ICT shares a running joke in his pizza shop about a "dough repair kit" (no such thing exists) to illustrate the importance of treating losses in trading with a long-term mindset.
- ICT emphasizes the need for patience in trading, as prematurely getting stopped out can happen more frequently when holding for longer terms.

# Trading ahead of news drivers using candlestick patterns.
- ICT explains how to identify and trade off market fluctuations around a bond auction at 1 pm.
- ICT explains how to identify potential price movements based on news events and chart analysis.
- ICT identifies three factors for potential price drop: liquidity, narrative, and time.

# Trading strategies for bond auctions and market analysis.
- Trader anticipates bond auction impact, takes partial position and journals for future learning.
- The speaker discusses holding onto trades longer, mentioning the importance of patience and experience.
- The speaker analyzes market data and predicts potential price movements based on upcoming events and patterns.

# Trading strategies using bearish order blocks and price points.
- The speaker identifies a bearish order block at $100.50 and takes a partial short position below it.
- The market displaces the bearish order block and trades up, reaching a low of $101.50.

# Trading strategies and market analysis.
- Trader seeks to enter trade despite potential for stop loss hit.
- The speaker emphasizes the importance of understanding their teaching methods and using them in trading.
- The speaker demonstrates how their model can generate profits even in unfavorable market conditions.
- ICT discusses the importance of identifying fair value gaps and mohawks in the market.
- ICT highlights the aggressive trading behavior after one o'clock, indicating potential entry points for optimal trades.

# Market inefficiencies and their impact on price movements.
- ICT emphasizes the importance of relative equal highs and lows in price movement.
- Inefficiencies in the market are subordinate to relative equal highs and lows.

# Trading strategies and market analysis.
- ICT is critical of buy-side traders for not filling voids in the market.
- Trader discusses trading strategies and success in the cryptocurrency market.

# Trading, market analysis, and personal finance.
- The speaker emphasizes the importance of taking action and not just watching and criticizing.
- The speaker offers valuable insights and techniques for making money, but warns of impending economic hardship.
- The speaker emphasizes the importance of having a long-term mindset in trading, rather than seeking quick and easy profits.
- The speaker's son is the main motivation for sharing this message, as he wants his son to have the right mindset for success in trading.
- The speaker emphasizes their reach and influence in the trading industry without asking for money in return.
- The speaker's son, Caleb, wants to learn how to trade and document the process for ad revenue.

# Trading psychology and risk management.
- The speaker emphasizes the importance of paper trading for beginners, as it allows them to focus on price movements without worrying about real-life losses.
- The speaker advises against combining paper trading with funded account trading, as it can lead to distractions and impulsive decisions.
- ICT emphasizes the importance of journaling and logging experiences to build confidence and overcome doubts.
- ICT advises against sharing successes with others, instead focusing on personal growth and learning from mistakes.

# Trading and market analysis using technical indicators.
- ICT emphasizes the importance of mental preparation for trading success.
- Trader emphasizes importance of understanding market mechanics to succeed.

# Trading, risk management, and helping others.
- The speaker is teaching a student how to trade by backtesting and journaling old data, then watching real-time price action and identifying baseline price action.
- The speaker has 81 entry mechanisms to get into trades, and they use Larry Williams' method of desensitizing oneself through trading to overcome fear and execute trades with precision.
- The speaker has been trading for 14 years and has seen the same patterns in the market.
- The speaker believes that the market is clean and easy to identify patterns, despite the 24-hour trading.
- ICT emphasizes the importance of helping others financially, rather than focusing on personal wealth.