ICT YT - 2024-08-08 - ICT 2024 Mentorship - Lecture 04-summary

Summary

The conversation revolved around trading and market mechanics, with a focus on understanding the algorithmic nature of financial markets. Speakers discussed various aspects of trading, including market volatility, chart annotation, and technical analysis. They emphasized the importance of identifying potential trading opportunities through analyzing new day opening gaps and monitoring levels. The speakers also highlighted the significance of journaling and risk management techniques, and stressed the need for trading confidence through observation and practice.

Action Items

[ ] Go through the provided price action data and identify potential trade opportunities that could have been captured. (The student) [Entire transcript]

[ ] Continue practicing reading price action without taking any trades to develop pattern recognition and understanding of market behavior. (The student) [Entire transcript]

[ ] Annotate charts to mark technical patterns discussed like gaps and use that information to observe how price reacts around those levels. (The student) [Entire transcript]

Outline

# The birthday of ICT, including its actual birth date and a message to the audience.
- ICT celebrates their birthday on August 8, 1969.

# Live stream disruptions and audio quality.
- ICT went off on a rant during a live stream, expressing frustration with interruptions and technical issues.
- ICT's personal, private students confirmed they could hear him loud and clear, despite technical difficulties.

# Economic calendar and market analysis.
- ICT discusses trading strategies and discloses his approach to analyzing market data without being influenced by monetary interests.
- ICT explains how to use Trading View and highlights the importance of labeling chart markers.
- The speaker is waiting for a medium high impact news event at 830, despite lacking high or medium impact news in the morning session.
- The speaker believes the market will still be volatile at 830 due to the absence of news, making it more probable for price runs to occur.

# Using Fibonacci levels to analyze stock market gaps.
- ICT suggests waiting to buy or sell based on market reaction to new week opening gaps.
- ICT explains how to use Fibonacci levels to identify potential trading opportunities.

# Identifying market trends and using Fibonacci levels for trading.
- ICT outlines Fibonacci settings for monitoring opening gaps, including 0.75 and 0.25 levels.
- ICT emphasizes the importance of only commenting on their YouTube channel or in direct messages, and being respectful of their time and opinions.
- The speaker discusses the importance of identifying areas of support and resistance in the market, using the New Day opening gap as a key indicator.
- The speaker emphasizes the role of buying pressure in turning the market, citing a Reddit thread as an example of collective buying pressure.

# Trading strategies and market inefficiencies.
- Trader identifies potential trading opportunities based on market structure and time of day.
- ICT argues that traditional support and resistance concepts are too narrow and can lead to losses.

# Identifying price direction using gaps and reference points.
- ICT emphasizes the importance of identifying reference points in price action.
- ICT explains how to anticipate market direction by analyzing price and time references.
- ICT emphasizes the importance of testing trading strategies personally to build trust and confidence.
- The speaker identifies a potential inversion fair value gap in the chart, which could indicate a potential direction for price movement.
- The speaker highlights the importance of identifying breakers and fair value gaps in technical analysis, and how they can help predict price movement.

# Technical analysis and market movement.
- ICT explains how to identify fair value in the market by looking for specific signatures and evidences.
- ICT demonstrates how to use these signatures to determine the direction of the market and make trades.

# Trading strategies and market analysis.
- ICT: Disputes opening gap, trades at high, then displaces lower (risky trading).
- Unknown Speaker: Seeks lower charts to maximize potential trading opportunities (15-second chart shown).
- ICT identifies a potential trading opportunity based on a balance between supply and demand.

# Annotating charts for trading with a focus on new day opening gaps.
- Speaker 2 explains importance of annotating charts with key levels for trading.
- ICT explains how to use news drivers to predict market movements.

# Price action and market analysis.
- ICT discusses the importance of 8:30 AM due to economic calendar and price movements.
- The speaker emphasizes the importance of not having an opinion when brand new to trading, and instead focusing on annotating and studying charts.
- The speaker suggests that by watching price action repeatedly, traders can pick up on patterns and learn to identify potential trading opportunities.
- ICT teaches student traders to trust their anticipatory price reading skills by practicing with real-time market data.

# Using price action to make informed trading decisions.
- ICT explains walking forward method to students, emphasizing log analysis and trade development.
- ICT emphasizes the importance of journaling and intentional observation in trading.

# Trading and market analysis.
- ICT discusses the market's tendency to rally after new day opening gaps, with a bias towards shorts experiencing pain.
- ICT highlights the importance of trading inefficiencies and First Order blocks, with potential for price runs up to the Tuesday New Day opening gap high.
- The speaker compares plate spinning to trading, emphasizing the need to avoid breaking plates (i.e., making mistakes) in the beginning stages of learning.
- The speaker shares personal experiences of trying and failing to use certain trading methods, emphasizing the importance of persistence and adaptability in trading.
- The speaker discusses their experience with trading, mentioning their impatience and desire to make money quickly.
- The speaker emphasizes the importance of patience and watching price action without emotional attachment to potential highs and lows.

# Using stop losses in trading, observing price action, and managing concerns.
- ICT emphasizes the importance of using a real stop loss to avoid mental stress and guarantee success in trading.
- ICT observes price action, notes concerns, and writes them down in real-time.

# Trading strategies and risk management using price action analysis.
- The speaker emphasizes the importance of watching price action and waiting for certain patterns to develop before making trades.
- The speaker encourages listeners to be patient and persistent in their trading, even if it's not fun or lucrative at first.
- ICT explains how he places stop losses based on volume imbalance and price action, using a real-life example.
- ICT's son is the one who requested him to document his stop loss placement method for trading.

# Trading strategies and market analysis.
- ICT argues that traders need to stop being skeptical and start trusting the evidence provided by successful students.
- ICT analyzes market activity, predicts potential future movements.
- ICT highlights a fair value gap in a stock, explaining why he chose that specific gap.

# Fibonacci levels and price movement.
- ICT measures Fibonacci levels to identify range highs and lows, and anticipates future directional movement based on recent protracted moves.
- ICT explains how open outcry trading worked before electronic markets, using examples from his teaching on baby pips.
- ICT anticipates a price movement based on logic taught yesterday, with potential impact from news driver.

# Using market replay to identify trading opportunities.
- ICT explains market dynamics, including spooling and liquidity.
- Analyzes price range convergence and potential trade opportunities.
- ICT analyzes market behavior and identifies patterns, using logic and real-time data to make informed trading decisions.
- ICT's screen appearance reflects their unique approach, with volume and balance indicators used to identify potential entry points and catalysts for price movement.

# Trading strategies and market analysis.
- ICT explains how smart money uses concepts like event horizon and dark pools to cannibalize stupid money.
- ICT criticizes others for teaching misinterpreted versions of his trading strategies.

# Technical analysis and trading strategies using candlestick patterns.
- ICT analyzes price action, identifying fair value gaps and wick behavior, providing insights for traders.
- ICT highlights the importance of volume balance and encroachment, showing how these factors impact price movement.
- The speaker discusses the importance of observing price action and identifying potential trading opportunities.
- The speaker provides examples of how to analyze price action and make trading decisions based on real-time observations.

# Technical analysis and trading strategies.
- ICT emphasizes the importance of managing risk in trading.
- ICT emphasizes the importance of focusing on one's own learning and understanding, rather than external opinions or projections.

# Trading psychology and managing emotions.
- ICT emphasizes the importance of understanding market dynamics and not relying solely on luck or past successes.
- ICT warns against the dangers of overconfidence and the tendency to attribute luck to skill in trading.
- The speaker emphasizes the importance of self-discipline and consistency in trading, citing examples from their own experience.
- The speaker encourages listeners to focus on the positive aspects of trading and to endure difficult moments with a growth mindset.
- The speaker warns against watching profit/loss while trading, as it can lead to toxic thinking and emotional distress.
- The speaker suggests breathing exercises and positive self-talk to manage stress and anxiety while trading.

# Managing distractions while trading, emphasizing the importance of a dedicated workspace and minimizing interruptions.
- The speaker emphasizes the importance of maintaining a focused mindset while trading, free from distractions and interruptions.
- The speaker shares their personal strategy for managing distractions, including closing the door to their office and limiting interactions with family and pets.

# Trading psychology and risk management.
- The speaker emphasizes the importance of trading with real money to learn and improve.
- The speaker advocates for a detached and unempathetic approach to trading, viewing it as a means to survive and succeed.
- The speaker emphasizes the importance of understanding the risks and having a balance in trading, rather than trying to trade every day or multiple times a day.
- The speaker encourages the listener to go through past price action and identify potential trading opportunities, with the goal of discovering their ideal trading model.
- ICT demonstrates a one-second chart to show opportunities for trading are present constantly.

# Trading and market analysis.
- ICT discusses fair value gaps and their impact on trading.

# Using charts to predict market movements.
- The speaker believes the markets are rigged and thankful for it, as it allows them to make informed decisions.
- The speaker compares the markets to a casino, where card counters are not allowed to play due to their skill set.
- ICT argues that relying on support and resistance levels is a losing strategy, and instead suggests attacking levels as opportunities.
- The speaker compares the economic calendar to a watering hole for lions, where gazelles (traders) go to get devoured.
- The speaker emphasizes the importance of respecting levels on a chart, rather than relying on random lines or levels.

# Technical analysis and trading strategies.
- ICT argues that market prices are not rigged, despite claims to the contrary, and that studying the charts can reveal valid patterns and levels.
- ICT searches for s and t divergences on multiple time frames to anticipate a fair value gap or run above old highs.

# Technical analysis and trading strategies.
- ICT wants to see divergence in a trade, where one asset fails and the other succeeds, as it provides quality behind analysis.
- ICT uses SMT to confirm trades, but doesn't necessarily need it, as it gives a little bit more quality behind analysis.
- ICT explains how to identify and trade on new day and new week gaps, using live data to verify opportunities.
- ICT emphasizes the importance of noticing and anticipating price action, calling it a "time machine" for forecasting the future.
- Enigma shares his experience and knowledge with enthusiasm and confidence, inspiring others to join the "cult of winning."
- Enigma's unique approach to technical analysis and trading has led to success for himself and those he has mentored.