ICT YT - 2024-08-24 - ICT 2024 Mentorship - Lecture 16-summary
# Summary
ICT YT - 2024-08-24 - ICT 2024 Mentorship - Lecture 16
The speaker, ICT, is teaching his son Caleb and other students how to annotate charts and log price action. He emphasizes the importance of daily routine and consistency, noting that early stages may feel monotonous but will eventually reveal patterns in price action. ICT advises using tools like PowerPoint or notation to capture screenshots and annotate observations. He reviews a live stream from August 13, 2024, detailing key price action points such as volume imbalances, bearish order blocks, and fair value gaps. ICT highlights the significance of first presentation fair value gaps and event horizons, explaining how these indicators can predict price movements. He stresses the importance of annotating charts with these observations for better understanding and trading.
Action Items
[ ] Annotate charts each day based on ICT's livestream guidance
[ ] Watch ICT's August 13, 2024 and August 23, 2024 livestreams for reference
[ ] Log daily price action with annotations, observations, and references to levels outlined in livestreams
Outline
# Reviewing Chart Annotation and Logging Techniques
- ICT introduces the purpose of the video, which is to show his son Caleb and other students how to annotate charts and log individual segments of price action.
- ICT advises using PowerPoint or notation to capture and save screenshots for daily sessions, emphasizing the importance of annotating observations.
- He describes the process as a daily meditation and routine, promising that it will initially feel monotonous but will eventually lead to better understanding of price action.
- ICT mentions that he talked about price action in a recent live stream without going off-topic, focusing on relevant observations and answering pertinent questions.
# Detailed Analysis of Price Action and Chart Observations
- ICT reviews the live stream from August 13, 2024, highlighting key points such as volume imbalance, bearish order block, and rejection block.
- He explains the importance of understanding higher time frame daily PD arrays and the significance of the low of the candle and volume imbalance.
- ICT discusses the importance of annotating charts with useful information, such as highest highs, lowest lows, and how price action worked with outlined levels.
- He emphasizes the need to focus on specific levels and annotations, using the example of the daily chart and the NASDAQ system.
# Volume Imbalance and Order Blocks
- ICT explains the concept of volume imbalance, defining it as a candle with a body that does not touch or overlap the previous candle's body.
- He discusses the importance of measuring the difference in volume imbalance highs on the daily chart and using it to identify consequent encroachment levels.
- ICT highlights the significance of the mean threshold of a bearish order block and the importance of not trading into the upper half of a volume imbalance.
- He provides a detailed analysis of the price action on August 23, 2024, explaining how the market worked through various levels and order blocks.
# Balanced Price Ranges and Manual Intervention
- ICT explains the concept of a balanced price range, where price trades up and down within a range, delivering both buy-side and sell-side efficiency.
- He discusses the importance of extending the balanced price range throughout the day and the challenges of breaking through high resistance liquidity.
- ICT mentions the impact of high-impact news drivers like FOMC, Non Farm Payroll, CPI, and PPI on price action and the importance of trading after such events.
- He emphasizes the need to annotate charts with relevant information and to understand the mechanics of seeing balanced and inefficient price action.
# Event Horizon and Fair Value Gaps
- ICT introduces the concept of event horizon, which is the midpoint between a new day opening gap and a new week opening gap.
- He explains the significance of the event horizon in drawing price into it and the importance of toggling between electronic trading hours and regular trading hours.
- ICT discusses the first presentation of a fair value gap, which forms between 9:31 AM and 10:00 AM Eastern Time, and its importance in projecting future price action.
- He provides a detailed analysis of the price action on August 23, 2024, explaining how the market respected the event horizon and fair value gaps.
# Live Stream Analysis and Daily Chart Journaling
- ICT reviews the live stream from August 23, 2024, highlighting the importance of watching it to understand the detailed price action and annotations.
- He emphasizes the need to annotate charts with relevant information, such as the opening range gap, undelivered portion of the gap, and the respect of fair value gaps.
- ICT discusses the importance of understanding the narrative behind the price action and the significance of the first presentation of a fair value gap.
- He advises students to take copious notes during live streams and to annotate their charts based on the reference points and levels discussed.
# Final Thoughts and Encouragement
- ICT encourages students to focus on the basics of chart annotation and logging, emphasizing the importance of understanding highs and lows.
- He advises students to annotate their charts with significant levels and order blocks, even if they are not immediately clear in their significance.
- ICT highlights the importance of daily practice and journaling, promising that it will lead to better understanding and trading skills over time.
- He concludes by encouraging students to continue practicing and annotating their charts, emphasizing the long-term benefits of the process.