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2 |1 |00:00:00 ~-~-> 00:00:14 |ICT: Good morning, folks. This is Michael, so I'm going to be looking at
3 |2 |00:00:14 ~-~-> 00:00:21 |shorting the NASDAQ. We're looking at a two minute chart here, simply because
4 |3 |00:00:21 ~-~-> 00:00:23 |that's where the inefficiencies are obvious. For me,
5 |4 |00:00:25 ~-~-> 00:00:31 |I'm going to set a limit to sell short inside of a
6 |5 |00:00:31 ~-~-> 00:00:35 |sell side of balance, buy side and efficiency. I'll note that in a moment,
7 |6 |00:00:35 ~-~-> 00:00:41 |it's also aiming for the sell side liquidity pool resting relative equal
8 |7 |00:00:41 ~-~-> 00:00:42 |lows right here.
9 |8 |00:00:47 ~-~-> 00:00:54 |Okay, so there's my target and my stop loss. Stop Loss is above the first
10 |9 |00:00:54 ~-~-> 00:00:58 |candle in the city, which I'll note for you here. I'm including the volume
11 |10 |00:00:58 ~-~-> 00:01:01 |imbalance. You'll notice that at the lower end of it.
12 |11 |00:01:09 ~-~-> 00:01:14 |And now that we're back in side of it, the limit order to be short, one
13 |12 |00:01:14 ~-~-> 00:01:19 |contract has been filled. If it can go to consequent encouragement of that
14 |13 |00:01:19 ~-~-> 00:01:27 |city, I'll be interested in selling more, annotating the buy stop liquidity
15 |14 |00:01:27 ~-~-> 00:01:33 |rate, so that liquidity has been purged. So the market should explore lower,
16 |15 |00:01:33 ~-~-> 00:01:36 |looking back into yesterday's regular trading hours. So
17 |16 |00:01:43 ~-~-> 00:01:44 |okay, I'm adding there
18 |17 |00:01:45 ~-~-> 00:01:49 |just around the continent, encroachment. Gotta fix this. This isn't where I
19 |18 |00:01:49 ~-~-> 00:01:54 |wanted it on the top left, and we'll make it a little bit bigger so we can
20 |19 |00:01:54 ~-~-> 00:02:00 |see it. Okay? So essentially, it's a turtle soup and it's a deferred entry.
21 |20 |00:02:00 ~-~-> 00:02:11 |I'm all
22 |21 |00:02:11 ~-~-> 00:02:19 |right, so presently short two risk is defined at the high of the city.
23 |22 |00:02:22 ~-~-> 00:02:30 |And again, aiming for the sell side liquidity down here. This is kind of
24 |23 |00:02:30 ~-~-> 00:02:38 |like a classic setup where we've already ran out liquidity prior to the opening
25 |24 |00:02:38 ~-~-> 00:02:40 |bell at 930 Eastern time.
26 |25 |00:02:42 ~-~-> 00:02:46 |So we have a shift in market structure, and I'm adding more here.
27 |26 |00:02:47 ~-~-> 00:02:51 |If I can get four contracts on I'll certainly try to do it. But the
28 |27 |00:02:52 ~-~-> 00:03:04 |opportunity to get a break below the low formed at around 21,006 98 98 that
29 |28 |00:03:04 ~-~-> 00:03:09 |should start to accelerate things as long as you stay in the lower half of
30 |29 |00:03:09 ~-~-> 00:03:15 |that city. That's noted here. Once we break that low, magnify this a little
31 |30 |00:03:17 ~-~-> 00:03:22 |bit, see the bodies of the wicks better. Okay,
32 |31 |00:03:23 ~-~-> 00:03:28 |so if we can see that that low I'm having the limit order to cover the
33 |32 |00:03:28 ~-~-> 00:03:32 |short at again, was referenced on the relative equal lows.
34 |33 |00:03:32 ~-~-> 00:03:33 |So don't lose sight of that. So
35 |34 |00:03:44 ~-~-> 00:03:50 |I'd like to see it break below that swing low that's just recently formed,
36 |35 |00:03:53 ~-~-> 00:04:01 |and then it can work back up and touch the bottom end of that city again. And
37 |36 |00:04:01 ~-~-> 00:04:04 |I'll annotate the inversion fair value gap.
38 |37 |00:04:06 ~-~-> 00:04:10 |Now that I think it's validated,
39 |38 |00:04:18 ~-~-> 00:04:24 |we're going to look here at the i time here.
40 |39 |00:04:27 ~-~-> 00:04:34 |Notice the run higher to take out the buy side started at 7am that's classic
41 |40 |00:04:34 ~-~-> 00:04:36 |pre market session activity.
42 |41 |00:04:41 ~-~-> 00:04:42 |Now in a perfect world,
43 |42 |00:04:44 ~-~-> 00:04:48 |we could just start going lower, but because we're just ahead of the 930
44 |43 |00:04:48 ~-~-> 00:04:53 |opening bell, it might want to whipsaw a little bit in here. I don't feel that
45 |44 |00:04:53 ~-~-> 00:04:59 |the stop loss is in jeopardy. Could be hit. If it does get hit, I'll look to.
46 |45 |00:05:00 ~-~-> 00:05:00 |Short.
47 |46 |00:05:13 ~-~-> 00:05:14 |Okay, so
48 |47 |00:05:16 ~-~-> 00:05:23 |one of the things that we move this underneath that low, one of the things
49 |48 |00:05:23 ~-~-> 00:05:30 |that I like to see is the unwillingness for price to get back to the premium
50 |49 |00:05:30 ~-~-> 00:05:34 |side of an array, like, for instance, the sell side imbalance, Python
51 |50 |00:05:34 ~-~-> 00:05:40 |efficiency. That little red box I've highlighted here, we've already worked
52 |51 |00:05:40 ~-~-> 00:05:44 |in the upper half of that. So I want to see it stay in the lower half. If it
53 |52 |00:05:44 ~-~-> 00:05:49 |does go back and trade to it, if it does again, trade inside of that. I'm not
54 |53 |00:05:49 ~-~-> 00:05:54 |really unnerved by that. It's completely permissible because of the opening range
55 |54 |00:05:54 ~-~-> 00:05:59 |beginning in a couple seconds. Usually there's a little bit of a flurry of
56 |55 |00:05:59 ~-~-> 00:06:07 |action, right, like that. Okay, see how quickly it just sharply rejected that.
57 |56 |00:06:13 ~-~-> 00:06:18 |These are all signatures. I like to see when prices giving indication that it's
58 |57 |00:06:18 ~-~-> 00:06:21 |unlikely. On side. Now, all of this might make you nervous. If you're
59 |58 |00:06:21 ~-~-> 00:06:25 |watching it, you're looking at that stop loss, thinking it's going to run up here
60 |59 |00:06:25 ~-~-> 00:06:31 |and jump and hit that and maybe it can. Maybe it might do it. But I'm not
61 |60 |00:06:31 ~-~-> 00:06:34 |thinking that I want to see it break down and make a lower low than that
62 |61 |00:06:34 ~-~-> 00:06:35 |swing low
63 |62 |00:06:37 ~-~-> 00:06:38 |one candle ago.
64 |63 |00:06:46 ~-~-> 00:06:55 |There we go. Now, any retracement back up into the low of that Sibi? If it does
65 |64 |00:06:55 ~-~-> 00:07:03 |so, I'll add one more contract, stop loss. I'm not interested in moving yet.
66 |65 |00:07:06 ~-~-> 00:07:11 |Now I'm looking at about the middle of it, okay, so approximately where my
67 |66 |00:07:11 ~-~-> 00:07:17 |average entry price is for the existing short position, if it can trade back
68 |67 |00:07:17 ~-~-> 00:07:22 |into that same price level, I will try to time that with a market order to
69 |68 |00:07:22 ~-~-> 00:07:23 |Shell one more.
70 |69 |00:07:37 ~-~-> 00:07:41 |I don't think that it's going to give me a chance, so I'm going to just add it
71 |70 |00:07:41 ~-~-> 00:07:44 |there now, so I'm still technically inside the
72 |71 |00:07:46 ~-~-> 00:07:46 |the city,
73 |72 |00:07:53 ~-~-> 00:08:00 |and also the inversion pair value gap Right before the buy side liquidity is
74 |73 |00:08:00 ~-~-> 00:08:07 |taken. I'll take that in a moment. I'm trying to pay attention to what this is
75 |74 |00:08:07 ~-~-> 00:08:08 |actually doing.
76 |75 |00:08:22 ~-~-> 00:08:26 |Like that's nice, and let's take it real heavy in here. And
77 |76 |00:08:27 ~-~-> 00:08:30 |again, you're probably wondering, why am I looking at two minute chart? Is there
78 |77 |00:08:30 ~-~-> 00:08:34 |some kind of secret to that today? No, just the city I'm highlighting here can
79 |78 |00:08:34 ~-~-> 00:08:40 |be drawn out over one two minute candle versus the broken up one minute
80 |79 |00:08:41 ~-~-> 00:08:46 |imbalance. It's got multiple fair value gaps on the one minute chart in the same
81 |80 |00:08:46 ~-~-> 00:08:49 |range that's highlighted here. So that's the only advantage I'm using the two
82 |81 |00:08:49 ~-~-> 00:08:55 |minute chart. So I taught this in the 2024 video lineup on the YouTube
83 |82 |00:08:55 ~-~-> 00:08:57 |channel. So you can go back and listen to that.
84 |83 |00:08:57 ~-~-> 00:08:58 |I made that very clear,
85 |84 |00:09:02 ~-~-> 00:09:05 |once you have a bias, you know you're looking for you know the drawn
86 |85 |00:09:05 ~-~-> 00:09:08 |liquidity, all those things
87 |86 |00:09:09 ~-~-> 00:09:11 |are foundational,
88 |87 |00:09:12 ~-~-> 00:09:16 |but the timing is based on either a five minute, four minute, three minute, two
89 |88 |00:09:16 ~-~-> 00:09:21 |minute or one minute chart, whichever one has the cleanest inefficiency that
90 |89 |00:09:21 ~-~-> 00:09:23 |you can work with define that type of thing.
91 |90 |00:09:31 ~-~-> 00:09:35 |It can touch the lower end of that, but if it trades up inside of that pink box
92 |91 |00:09:36 ~-~-> 00:09:41 |I wanted to see it stay in the lower half. That's very, very critical.
93 |92 |00:09:43 ~-~-> 00:09:44 |And it's also
94 |93 |00:09:45 ~-~-> 00:09:50 |working in the the aspects of this inversion fair value. If I get this
95 |94 |00:09:50 ~-~-> 00:09:53 |thing to drop on the right candle, there you go, I'm.
96 |95 |00:10:01 ~-~-> 00:10:08 |So far, it's a little unorganized, but withdrawal is still very much obvious.
97 |96 |00:10:08 ~-~-> 00:10:12 |The liquidity has been taken on the buy side. Traders that are buying on a
98 |97 |00:10:12 ~-~-> 00:10:19 |breakout, they're caught offside right now. They don't realize it yet right now
99 |98 |00:10:19 ~-~-> 00:10:21 |that there's hoping it's going to move in their favor.
100 |99 |00:10:22 ~-~-> 00:10:32 |So half of
101 |100 |00:10:32 ~-~-> 00:10:37 |that inversion, fair value gap, the one it's orange. I want to see price stay
102 |101 |00:10:37 ~-~-> 00:10:40 |below that as well. So it's a combination of two things. I want to see
103 |102 |00:10:40 ~-~-> 00:10:44 |stay in the lower half of the pink box, which is the city, and I want to see it
104 |103 |00:10:44 ~-~-> 00:10:48 |stay in the lower half of that orange box, which is the inversion fair value
105 |104 |00:10:48 ~-~-> 00:10:52 |cap. So my my thought process is, I'm going to break lower and go below that
106 |105 |00:10:52 ~-~-> 00:10:54 |low right here. That's what I'm annotating. So that candlestick should
107 |106 |00:10:54 ~-~-> 00:11:00 |be the definition of the high of that return back into both city and inversion
108 |107 |00:11:00 ~-~-> 00:11:01 |fair value cut.
109 |108 |00:11:06 ~-~-> 00:11:12 |So if my read on price is accurate, it should be unlikely to trade in the upper
110 |109 |00:11:12 ~-~-> 00:11:16 |half of both of those rectangles I've drawn highlighting inefficiencies I'm
111 |110 |00:11:26 ~-~-> 00:11:30 |that's about where I was filled on that fourth contract. So I want to highlight
112 |111 |00:11:30 ~-~-> 00:11:36 |the midpoint here you can see consequent encroachment. Pretty much nailed it. So
113 |112 |00:11:36 ~-~-> 00:11:43 |I would have added that fourth one when it just was touching the low that. So
114 |113 |00:11:43 ~-~-> 00:11:47 |either way, I would have got that fourth contract on I'm going to sit Pat with
115 |114 |00:11:47 ~-~-> 00:11:51 |what I am right now. I don't want to go anymore, and I'm not going to do any
116 |115 |00:11:51 ~-~-> 00:11:56 |partials. So it's going to be a full pull to sell side liquidity. If I can
117 |116 |00:11:56 ~-~-> 00:12:05 |get it, it starts to break down in here, that'll be a good indication. I want to
118 |117 |00:12:05 ~-~-> 00:12:10 |see a lot of heaviness, big, long, stretched out black candles. So I want
119 |118 |00:12:10 ~-~-> 00:12:17 |to see a lot of desire for price to the probe blower and close in some of that
120 |119 |00:12:17 ~-~-> 00:12:21 |opening range gap that's not clearly defined here, but I'll let you look at
121 |120 |00:12:21 ~-~-> 00:12:29 |your charts in relationship to that idea. I'm trying to keep the annotation
122 |121 |00:12:29 ~-~-> 00:12:32 |as light as possible, because I don't usually put this stuff on the chart when
123 |122 |00:12:32 ~-~-> 00:12:36 |I'm trading. But for the sake of you watching and following along with the
124 |123 |00:12:36 ~-~-> 00:12:42 |logic, where was my premise on entry? Why was my entries, where they were.
125 |124 |00:12:43 ~-~-> 00:12:47 |You're seeing that here. So far, this is exactly what I want to see. I want to
126 |125 |00:12:47 ~-~-> 00:12:54 |see a lot of heaviness here. There's a little bit more. I want to drop that
127 |126 |00:12:54 ~-~-> 00:12:54 |stop,
128 |127 |00:12:56 ~-~-> 00:12:57 |reduce some of the risk. I
129 |128 |00:13:00 ~-~-> 00:13:04 |won't be so interested in chasing with the stop loss, but I want to reduce it
130 |129 |00:13:04 ~-~-> 00:13:10 |now here, and that'll stay with the life of the trade. Now, not interested in
131 |130 |00:13:10 ~-~-> 00:13:16 |moving anything else. It comes back and stops me out. It covers commission
132 |131 |00:13:16 ~-~-> 00:13:23 |costs. It gives me enough for a pizza dinner, and it'll be whatever it is. But
133 |132 |00:13:23 ~-~-> 00:13:27 |I'm more interested in following along with price action. Does it want to reach
134 |133 |00:13:27 ~-~-> 00:13:32 |for that low? And if it does, it might punch through it a little bit further
135 |134 |00:13:32 ~-~-> 00:13:39 |than the limit order is marked. So if it does so, it might not reflect the
136 |135 |00:13:39 ~-~-> 00:13:45 |execution label. So I want to take that in consideration here, and kind of like
137 |136 |00:13:45 ~-~-> 00:13:49 |scrunch the chart up a little bit vertically, so that way, if it does go
138 |137 |00:13:49 ~-~-> 00:13:49 |below it,
139 |138 |00:13:51 ~-~-> 00:14:02 |it should allow me to share that with you. I hate when they do that. It should
140 |139 |00:14:02 ~-~-> 00:14:06 |film. Here you go. Hope you enjoyed it. Take care and be safe. Bye.