ICT YT - 2024-08-09 - ICT 2024 Mentorship - Lecture 05-summary

Summary

The conversation revolves around trading strategies, market dynamics, and the importance of mastering trading fundamentals. ICT discusses various trading patterns, including the 'turtle soup' pattern, and emphasizes the need for proper mentorship and a solid foundation in trading. The speaker also stresses the importance of interpreting price action and identifying key levels of support and resistance. Additionally, ICT discusses the importance of understanding market dynamics and using technical analysis to navigate market uncertainty.

Outline

# Birthday, Pinterest, and turtle soup.
- Host welcomes viewers, shares birthday message and upcoming topics.

# Trading during different time frames, focusing on the Asian session.
- The speaker discusses the "turtle soup" pattern, a reversal setup inspired by Richard Dennis' turtle trading system, which has a low strike rate but captures big runs.
- The speaker recommends Linda Rasch and Larry Connors' book "Street Smarts" for its insights on interpreting price action and understanding stop hunts.
- ICT will be live streaming from his dining room, with ambience and background noise, to teach son and viewers.
- ICT will be discussing the Asian session, focusing on the 6pm restart and lack of volatility in the 7-9pm time frame.
- ICT suggests that the least enticing time of day for trading is after 5pm in the States, due to limited trading opportunities and personal schedules.
- Despite this, ICT plans to show how to use new day opening gap theory during this time, incorporating previous teachings on Forex.

# Using annotations on a trading chart, with the speaker advocating for minimalism and flexibility.
- ICT emphasizes the importance of accurate annotations and minimal clutter on a chart.
- Trader learns to trade naked by gradually removing annotations from charts.

# Analyzing price charts for trading bias and identifying key levels.
- ICT identifies problematic price action, indicating weakness (15 seconds)
- ICT highlights repeated patterns in price movement, suggesting algorithmic control (15 seconds)
- ICT emphasizes the importance of annotating new day opening gaps on a chart to identify bias and make informed trading decisions.
- ICT demonstrates how to annotate these gaps by using the midpoint of the gap as a reference point, and highlights the importance of experience and understanding in trading naked without annotations.

# YouTube channel, copyright strikes issued.
- ICT will release weekly videos on YouTube to provide a personalized development experience for Son.
- ICT warns YouTube channels against copying his content, threatening copyright strikes.

# Trading and mentoring, emphasizing the importance of understanding market dynamics and avoiding distractions.
- The speaker describes a scenario where people are blindly following others for attention, clout, or money, rather than taking responsibility for their own actions and decisions.
- The speaker aims to provide students with the ability to trade independently, without needing to watch their videos or rely on their mentorship.
- ICT emphasizes the importance of proper mentoring and coaching in trading, citing his own experience as a coach.
- ICT addresses common questions and concerns from listeners, providing insights and explanations on various topics.
- ICT provides explanations and analogies to help traders understand complex concepts.
- ICT uses eyeballing techniques to identify key levels on a chart without drawing lines.

# Using economic calendar and time to predict market movements.
- The speaker emphasizes the importance of waiting for the market to create motion before trading, citing the example of the new day opening gap.
- The speaker uses chart analysis to identify areas of liquidity and potential trading opportunities, highlighting the importance of annotating these areas for future reference.

# Annotating a chart for day trading, focusing on openings and liquidity pools.
- ICT explains how to annotate a chart to identify potential trading opportunities, using minor buy and sell side liquidity pools.
- ICT demonstrates how to copy and paste annotations on Trading View, using Control + drag mouse technique.
- ICT teaches how to annotate charts for specific trading times.
- ICT explains how algorithm engineers liquidity, taking out short-term pools and creating new highs and lows.
- ICT emphasizes the importance of keeping the initial high and low on the chart for learning purposes, but muting their prominence.

# Market analysis and trading strategies using Asian session data.
- ICT discusses market behavior and predictability during Asian session.
- The speaker discusses the importance of analyzing the market's behavior around the New Day opening gap, particularly in the early hours of the Asian session.
- The speaker highlights the significance of the market crossing back over the New Day opening gap, indicating the formation of initial buy side liquidity and initial sell side liquidity.

# Trading strategies using price action and order blocks.
- The speaker discusses the importance of identifying and trading on the algorithmic movements of the market, particularly during the 7pm-9pm New York time frame.
- The speaker highlights the significance of annotating charts to log and analyze the market's algorithmic operations, even for those who may not trade during this time frame.
- The speaker identifies a breakaway gap and expects the price to seek momentum and speed.
- The speaker aims to enter the market below the body of the down closed candle, recognizing the discount element of the order block.

# Trading strategies using market displacement and gap analysis.
- ICT explains how to identify and trade on opening gaps, using Wyckoff method.
- ICT demonstrates how to manage trades by watching for displacement and balancing sales.

# Technical analysis and trading strategies using price action.
- ICT emphasizes the importance of understanding time elements in market analysis.
- The speaker analyzes the market by identifying a potential buy side liquidity pool and measuring the price leg leading up to it.
- The speaker looks for exit points above the buy side liquidity pool, anticipating a short-lived rally before selling.

# Trading strategies and risk management.
- The speaker is using Fibonacci retracement levels to identify potential price targets based on a measured move from a low to a high.
- The speaker is using the midpoint of the Fibonacci levels as a reference point for potential price targets, taking into account standard deviation and the possibility of the price action coloring beyond the expected range.
- ICT wants to know where the market will reach and the low hanging fruit threshold.
- ICT aims for an exit above or at the low hanging fruit threshold.
- The speaker is frustrated with their inability to consistently predict market highs and lows, but is content with their methodology that drives them to buy lows and distribute positions at key points.
- The speaker emphasizes the importance of constantly improving and not becoming complacent or lazy in trading, as this can lead to poor decision-making and loss of money.

# Trading strategies using support and resistance levels.
- ICT teaches how to identify fake breakouts and consolidations in the market.
- Trader challenges viewers to prove the effectiveness of support and resistance levels in live streams.

# Technical analysis and trading strategies using previous day's highs and lows.
- ICT references a notepad to track liquidity levels and make trading decisions.
- ICT criticizes Apple products, preferring Samsung devices instead.
- ICT analyzes the market, identifying a bull flag and potential support resistance levels.
- ICT highlights the importance of respecting previous days highs and lows for trading setups.

# Price action and potential trading opportunities based on technical analysis.
- ICT highlights the importance of identifying and trading off relative equal lows in the market.
- Trader identifies key levels of support and resistance based on price action.

# Trading hours and opening range.
- ICT explains that he's not teaching classic support and resistance, but rather a unique perspective on technical science.
- He emphasizes the importance of being able to sit still and not overtrade, as this is what messes up traders.
- The opening range is established between 9:30 and 10:00 AM, with the majority of the gap closure occurring during this time.
- The market will create a sometimes it'll open trade a little bit lower, and then start working higher, drop back down, either take the low it's formed, or just like it did here, very subtly, and then rally.

# Trading strategies for gaps with a focus on probability and reference points.
- ICT explains how to identify strong probability areas in a gap, using mid-gap as an example.
- ICT highlights the importance of reference points on a chart, particularly for gap trading.

# Identifying fair value gaps in the stock market using annotated charts.
- Analyst expresses skepticism towards market sentiment due to looming geopolitical events.
- ICT explains importance of reference points in technical analysis.
- The speaker emphasizes the importance of identifying fair value gaps in the market and trading them with a clear entry and exit strategy.
- The speaker warns against reinventing the rules of trading or trying to do things differently than what has been taught, as it can lead to anxiety and a toxic learning experience.

# Market behavior without clear news drivers, with potential for choppy trading and big runs.
- The market can be aimless and choppy when there are no medium or high impact news drivers in the morning session.
- External stimuli, such as events in the Middle East or US election, can cause big runs in the market on these types of days.

# Market analysis and potential retracement.
- ICT suggests trading range of 20-30% on Friday based on one-sided movement.
- Speaker discusses potential market movements based on election year and economic calendar.
- ICT analyzes Dow divergence with NASDAQ and SP, taking partial trades based on SMT signals.
- ICT expects Dow to disrupt smooth area and relative highs, potentially leading to price disruption.