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ICT YT - 2024-09-30 - ICT Tutelage Journal Log - Seek and Destroy vs High Resistance Liquidity Run Profiles

Last modified by Drunk Monkey on 2024-10-08 13:31
1 00:00:20 --> 00:00:29 ICT: All right, Kayla, we're going to be drawing a contrast between a seek and
2 00:00:29 --> 00:00:34 destroy market profile and a high resistance liquidity market profile.
3 00:00:36 --> 00:00:42 They have similar characteristics, but the main contrast is that a seek and
4 00:00:42 --> 00:00:47 destroy profile just basically stays inside of the middle of the range that's
5 00:00:47 --> 00:00:54 defined? So if we look at the September 23 2024 you can find it in the 2024
6 00:00:55 --> 00:01:04 mentorship playlist on YouTube. It's the title, how to avoid, seek and destroy a
7 00:01:04 --> 00:01:08 market profile, something to that effect. But it's the recording that was
8 00:01:08 --> 00:01:13 recorded on September 23 2024 this is a five minute chart, and I'm not going to
9 00:01:13 --> 00:01:18 show you the one minute and 15 second charts because of that video. You can go
10 00:01:18 --> 00:01:22 back and look at it and watch me actually call it out live how it was
11 00:01:22 --> 00:01:28 problematic. And the main takeaway is this, at seven o'clock in the morning,
12 00:01:28 --> 00:01:32 what will happen is, is the market will create a short term low, short term
13 00:01:32 --> 00:01:37 high. The high will be taken out. Each individual high gets taken out, every
14 00:01:37 --> 00:01:42 individual low gets taken out, and it keeps coming back to the middle. Now
15 00:01:42 --> 00:01:45 you're not going to know what the middle is early on, but soon as you start
16 00:01:45 --> 00:01:50 seeing the price just cannot find its way out of just taking the highs and
17 00:01:50 --> 00:01:54 lows and coming right back to the middle. That's usually indicative of a
18 00:01:54 --> 00:01:58 seeking destroy. And just watch that recording again on September 23 2024
19 00:01:58 --> 00:02:02 because that's me literally explaining it as it's happening, how to identify
20 00:02:02 --> 00:02:08 it. Market trades above the short term high here comes down, creates a low,
21 00:02:09 --> 00:02:15 higher high here, multiple times relative equal lows. They take them and
22 00:02:15 --> 00:02:19 ultimately take out the low of the day and come right back in to close at the
23 00:02:19 --> 00:02:23 middle of the range. So all of this range here, if you look at the highest
24 00:02:23 --> 00:02:29 high to the lowest low, and put a Fibonacci 50% level, and you'll see we
25 00:02:29 --> 00:02:33 basically close right in the middle range, seek and destroy will absolutely
26 00:02:33 --> 00:02:36 burn your account. If you think that you're going to be able to capture
27 00:02:36 --> 00:02:40 something inside this day, chances are going to fall victim to it. I certainly
28 00:02:40 --> 00:02:45 did fall victim to this in the mid 90s, and I was first starting out. I didn't
29 00:02:45 --> 00:02:49 know anything about this, so it was something I had to learn about by
30 00:02:49 --> 00:02:53 getting beat up by it. All right, so now it's contrast the secret destroy market
31 00:02:53 --> 00:03:03 profile with a high resistance liquidity market profile. So all right, so we have
32 00:03:03 --> 00:03:08 the charts here on a five minute basis, relative equal lows here. I mentioned
33 00:03:08 --> 00:03:14 that on Friday, September 27 2024 is live stream, and the buy side, we swept
34 00:03:14 --> 00:03:20 that. And the difference between a seek and destroy profile and a high
35 00:03:20 --> 00:03:26 resistance liquidity profile is that seek and destroy reverts back to the
36 00:03:26 --> 00:03:33 middle of the range. It doesn't really make any meaningful protraction that is
37 00:03:33 --> 00:03:37 extended throughout the day. It just keeps higher highs lower lows, but right
38 00:03:37 --> 00:03:42 back to the moon. So it's not a trending day, it's not a consolidation day. It is
39 00:03:42 --> 00:03:46 a seek and destroy day. So it's literally this going after liquidity,
40 00:03:46 --> 00:03:52 and it's pausing while allowing the market to either build sentiment or it's
41 00:03:52 --> 00:03:56 meant to break up or disrupt the present market sentiment that's in play at the
42 00:03:56 --> 00:04:01 time when that day is underway. So if you look at the difference between this
43 00:04:01 --> 00:04:06 day here, we had liquidity taken and, yes, the market went down and took the
44 00:04:06 --> 00:04:10 relative equal lows here, where this unfinished business was left in play. So
45 00:04:10 --> 00:04:14 when they create these two lows that are relatively equal, the second one to the
46 00:04:14 --> 00:04:19 right of this one here, that's slightly higher, so that validates this as a high
47 00:04:19 --> 00:04:22 probability, relative equal low. That means that this is going to be a prime
48 00:04:22 --> 00:04:28 candidate for the market to want to reprice back down here. We ran the highs
49 00:04:29 --> 00:04:34 here, so that drop down took us down into that very sell side liquidity pool
50 00:04:34 --> 00:04:40 right there. So while the market does a lot of give and take back and forth,
51 00:04:41 --> 00:04:49 looking really violent, even though it goes lower. It's that very nature that I
52 00:04:49 --> 00:04:55 dub this as a high resistance liquidity profile. So it does run to liquidity,
53 00:04:55 --> 00:05:01 but it doesn't do it in any inefficient manner. It does it. Very efficiently,
54 00:05:01 --> 00:05:05 meaning high resistance. It's going to get there, but it's not going to go
55 00:05:05 --> 00:05:09 there in a straight shot. All right, let's zoom in on that little area here
56 00:05:09 --> 00:05:14 on Friday. All right, so again, we're looking at the finance chart, and the
57 00:05:14 --> 00:05:20 market rallies up ahead of the 930 opening bell, which is here. And we have
58 00:05:20 --> 00:05:24 a gap at the 930 candlestick. That is not your gap, that's not your fair value
59 00:05:24 --> 00:05:29 get to work with. So you have to use a later fair value gap. So has to be 931
60 00:05:30 --> 00:05:37 or later than that. But between 931 or 931 rather to 10am Eastern Time, you're
61 00:05:37 --> 00:05:43 looking for that one minute fair value gap to frame your trade on market.
62 00:05:43 --> 00:05:47 Trades up creates a Judas swing. Breaks lower and look at how back and forth.
63 00:05:47 --> 00:05:53 Every individual candlestick overlaps the previous range. So all of this back
64 00:05:53 --> 00:05:57 and forth, price action, it's like a trading range. Market moves a little bit
65 00:05:57 --> 00:06:00 lower, creates a new trading range. Moves a little bit lower, creates a new
66 00:06:00 --> 00:06:04 trading range. Moves a little bit lower, creates a new trading range comes back
67 00:06:04 --> 00:06:09 up, creates relative equal highs, drops down, fails to take the low, comes back
68 00:06:09 --> 00:06:13 up, wipes the buy side above these relative equal highs, and then sells
69 00:06:13 --> 00:06:18 off, right there. Now this part of this move right here, this, this is a low
70 00:06:18 --> 00:06:23 resistance liquidity run that right there is a real quick, sudden run and
71 00:06:23 --> 00:06:28 see the inefficiency is left here that that's a stark contrast between all of
72 00:06:28 --> 00:06:37 this back and forth, very efficient delivery. This delivery here is a low
73 00:06:37 --> 00:06:41 resistance liquidity run. So what makes it low resistance? It creates these
74 00:06:41 --> 00:06:46 large buy side and balance cell sign efficiencies and sell side imbalance,
75 00:06:46 --> 00:06:50 buy side efficiencies, these singular candles, okay, whenever you have these
76 00:06:50 --> 00:06:56 like that, that is a hallmark of a low resistance liquidity run. You don't see
77 00:06:56 --> 00:07:00 that in here. It's a lot of back and forth overlapping anything that would be
78 00:07:00 --> 00:07:05 a gap. They keep repricing back over top of it. That is redelivery. Okay, so
79 00:07:05 --> 00:07:08 you're gonna get caught up in a lot of retracements that may stop you out.
80 00:07:08 --> 00:07:12 You'll have to look for the pattern that I mentioned as a turtle soup, where
81 00:07:12 --> 00:07:15 they're running the buy stops when it's bearish, or running the cell stops when
82 00:07:15 --> 00:07:19 it's bullish, but ultimately it trades down to what we're outlining it on
83 00:07:20 --> 00:07:27 Friday. But let's take a look at a one minute chart. All right, here's a one
84 00:07:27 --> 00:07:32 minute chart at 930 fair value gap. It trades up into it, but right here,
85 00:07:32 --> 00:07:36 that's your fair value gap. That's the one you're going to utilize. Okay? So
86 00:07:36 --> 00:07:40 you can see on a one minute chart, it still doesn't really thin out any of the
87 00:07:40 --> 00:07:43 price action. It's still very efficiently back and forth. Each
88 00:07:43 --> 00:07:46 individual candles that could keeps overlapping the previous range in any
89 00:07:46 --> 00:07:52 type of fair value gap, it quickly wants to reprice to and redeliver. We have a
90 00:07:52 --> 00:07:56 small one right in here. You see it goes right up into it there, but it's more
91 00:07:56 --> 00:08:00 appropriately described as a turtle suit. And we'll look at some of them as
92 00:08:00 --> 00:08:04 we go through, but ultimately, you can see we have a nice little run here to
93 00:08:04 --> 00:08:09 take the relative equal highs, and then we have it dropped down after taking the
94 00:08:09 --> 00:08:13 relative equal highs, it's going to go after the relative equal lows and the
95 00:08:13 --> 00:08:17 sell side liquidity pool here that was shown to you on a five minute chart, and
96 00:08:18 --> 00:08:26 A nice precipitous drop there. This was why your trade in, your your combine
97 00:08:26 --> 00:08:30 panned out really well. And if you would have kept your limit order in there, you
98 00:08:30 --> 00:08:34 probably would have overshot the profit objective. You're not supposed to go
99 00:08:34 --> 00:08:40 over 50% of whatever it is they're trying to tell you at the aim for and
100 00:08:40 --> 00:08:45 you had part of this run here as well. So you had two trades inside of a high
101 00:08:45 --> 00:08:50 resistance liquidity profile. Both your trades, the long and the short were both
102 00:08:50 --> 00:08:58 low resistance liquidity runs. Right? You see a 15 second chart here, opening
103 00:08:58 --> 00:09:03 range gap shaded here in this I'm I
104 00:09:03 --> 00:09:04 don't know color that is.
105 00:09:05 --> 00:09:09 And then we have the first presented fair value gap. That's your fair value
106 00:09:09 --> 00:09:14 gap, Caleb, that's the one you're looking for. It has to form after 930 so
107 00:09:14 --> 00:09:19 931 is the earliest it can form, up to 10 o'clock in the morning. So it was
108 00:09:19 --> 00:09:23 seen on the one minute chart before we dropped down the 15 second chart. Second
109 00:09:23 --> 00:09:26 chart. Solid coated here. It rallies up. This is the Judith swing. I mentioned in
110 00:09:26 --> 00:09:32 the live stream that this is actually good. Leaving the upper portion didn't
111 00:09:32 --> 00:09:38 completely close it into the opening range gap high, so dropping down that
112 00:09:38 --> 00:09:41 return back into your fair value gap. That's your tree. That's your entry.
113 00:09:41 --> 00:09:45 That's how you would take your setup. But your stop loss, as I mentioned in
114 00:09:45 --> 00:09:48 the live stream, would have been twice this fair value gaps height. So your
115 00:09:48 --> 00:09:52 your stop would have to be a little bit higher than normal. But that's how you
116 00:09:52 --> 00:09:55 would trade, a high resistance liquidity run, holding that type of trade and not
117 00:09:55 --> 00:09:58 chasing it down through any of this, because you're likely to get stopped
118 00:09:58 --> 00:10:04 out. I had. Add this high here, framed with the FIB and down to a low that's
119 00:10:04 --> 00:10:09 prior to running out that relative equal low. And the Fibonacci level, 50% here
120 00:10:09 --> 00:10:14 is a result of that. So what this is saying is, at this price level and
121 00:10:14 --> 00:10:19 higher, that's a premium market, so a high resistance liquidity run profile,
122 00:10:19 --> 00:10:24 when you can frame the premium to discount. If it's a bearish unfinished
123 00:10:24 --> 00:10:27 business that you're aiming for, like a sell side liquidity pool, as it was in
124 00:10:27 --> 00:10:31 the 27th of September, you're looking for the market to decline. So because
125 00:10:31 --> 00:10:36 it's high resistance liquidity profile, it's going to not have inefficiencies.
126 00:10:36 --> 00:10:40 It's going to be running for buy stops. So they run the market higher to take
127 00:10:40 --> 00:10:44 the buy stops and then sells off. They run the buy stops and then sell off.
128 00:10:44 --> 00:10:50 They run the buy stops, sell off, run the buy stops, sell off, run the buy
129 00:10:50 --> 00:10:56 stops, sell off. So anytime that the market has created a turtle suit above
130 00:10:56 --> 00:11:01 this red line, you're in a premium market relative to this high here. Now,
131 00:11:01 --> 00:11:05 why this high here? Because after we created this price leg at the high down
132 00:11:05 --> 00:11:10 to this low, and we retrace back in, it's creating consolidation that still
133 00:11:10 --> 00:11:15 is aiming for a much lower target. So we're looking at this area here as a
134 00:11:15 --> 00:11:20 deep premium that could be used to pyramid. You can add another position
135 00:11:20 --> 00:11:24 entry from here, but that would be the only one that I would think that was
136 00:11:24 --> 00:11:29 appropriate. Chasing all that down here. If you start building in a larger
137 00:11:29 --> 00:11:34 position on high resistance liquidity profile, chances are, as you add more to
138 00:11:34 --> 00:11:38 your pyramided position, which you'll do later on, when you get better at it,
139 00:11:38 --> 00:11:45 your core average price will drop lower, meaning that you're you're more prone to
140 00:11:45 --> 00:11:53 get to a net loss position if you start building up a lot. So if you, if you add
141 00:11:53 --> 00:11:57 anything on a day like this, it's just do a single like unlike where that'll do
142 00:11:58 --> 00:12:01 six contracts in something like this, and then I can add four more here go on
143 00:12:01 --> 00:12:05 a day like this. It wouldn't be like that. It would be six and then add one,
144 00:12:05 --> 00:12:09 because it's not going to move my core entry or average price entry
145 00:12:09 --> 00:12:13 significantly lower, which would mean that it'd be easier for the market get
146 00:12:13 --> 00:12:18 back up and take me to a net loss in any retracements. Consolidation here looks
147 00:12:18 --> 00:12:21 like a bull flag. Retail traders see that. They like that. I mentioned it in
148 00:12:21 --> 00:12:25 live stream. That's a turtle suit and then sells off. The main difference
149 00:12:25 --> 00:12:29 between high resistance liquidity profiles and the seek and destroy. Seek
150 00:12:29 --> 00:12:32 and Destroy is basically untradable. Okay, you're not going to want to trade
151 00:12:32 --> 00:12:38 them, and the high resistance liquidity profiles are tradable, but you have to
152 00:12:38 --> 00:12:42 keep your stop loss really, really close to your entry and only do one small
153 00:12:42 --> 00:12:46 pyramid, if at all, and then just submit yourself to time you.