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ICT Market Maker Primer Course - 01 - What New Traders Should Focus On.srt

Last modified by Drunk Monkey on 2021-06-10 06:17
1 00:00:48,120 --> 00:00:59,490 ICT: Hello folks, welcome back. Alright, so we're embarking on a new journey for some of you. And for those that have gone through my old vintage ICT tutorials,
2 00:01:00,090 --> 00:01:15,120 these will probably be a little bit more user friendly and concise. I did have the aim and goal in mind to make them is short, concise, is dense as possible
3 00:01:15,540 --> 00:01:27,570 with content but still not be so long and the time window went to durations to be a little bit more manageable. So that was the goal. For this, this round of
4 00:01:27,780 --> 00:01:33,900 tutorials, we're gonna be talking about what should new traders study and practice.
5 00:01:41,370 --> 00:01:50,730 Okay, so what's going to be covered in this module, okay, the ICT concepts used in this one is going to be the theory of liquidity raids or stop runs
6 00:01:52,920 --> 00:01:54,360 introduction to liquidity pools
7 00:01:59,790 --> 00:02:17,820 how to locate high probability liquidity pools, introduction of the ICT waterblock high accuracy entry points, low drawdown entry tactics, high
8 00:02:17,820 --> 00:02:32,100 probability targeting the benefits of scaling profits and how to make money when you are wrong. All these concepts and ideas are going to use practical
9 00:02:32,100 --> 00:02:45,150 application. But before we show you that, it's important that I begin with a overview. Because when we look at price action, as a new trader, you're going to
10 00:02:45,150 --> 00:02:52,770 come into the marketplace, especially with forex because it's so exciting. It's fast paced, it's two wonderful markets a beautiful market, it gives plenty of
11 00:02:52,770 --> 00:03:01,290 opportunities, you can be day trading it, you can scalp it, you can position trade it, you can swing trade it, it's absolutely phenomenal. I love it, it's To
12 00:03:01,290 --> 00:03:13,620 me, it's the best asset class today, however, like you, when I first got engaged in the study of price action for forex. I quickly found myself doing a lot of
13 00:03:13,620 --> 00:03:23,460 things I should have been doing. And what's worse is I was inexperienced trader from other asset classes, stocks, bonds, commodities. And I did trade to
14 00:03:23,460 --> 00:03:35,250 currency markets, by way on the futures market. So you would think having a decade of or more really, of experience before getting involved in the foreign
15 00:03:35,250 --> 00:03:44,550 exchange market that I would have had a little bit better grasp on my emotions and my excitement. But that didn't happen. Because it's 24 hour market, it moved
16 00:03:44,550 --> 00:03:56,400 around very liquid. And it was like it's like a candy store for me. So I did a lot of things wrong. And I've learned over the years. And these videos are going
17 00:03:56,400 --> 00:04:09,330 to help you avoid a lot of those pitfalls. So we're going to cover an element of price action that I think is essential. And if you have no previous trading
18 00:04:09,330 --> 00:04:20,430 experience, if you've not corrupted your mind with the retail stuff that is promoted in the industry, you're actually at an advantage. Okay. folks that have
19 00:04:20,430 --> 00:04:33,000 gone through trading courses and material are going to have some hardships with this. Not just with this teaching but all the ones I'm going to be teaching. The
20 00:04:34,290 --> 00:04:49,050 constant theme is I want you to think about the marketplace. completely opposite to what retail teaches. So retail is like Elliott, wave supply and demand.
21 00:04:51,840 --> 00:05:00,960 harmonic patterns, animal patterns, all these things that you put on your charts, they're all distractions. All you need to know is The open high, low and
22 00:05:00,960 --> 00:05:10,470 close. Okay, there's four reference points that make up price. And we made charts based on those four reference points. Now we have an element of time.
23 00:05:10,890 --> 00:05:21,540 That's a factor that won't be talked about in this module, but I will talk about it in coming lessons. But I want you to think about when, for instance, we're
24 00:05:21,540 --> 00:05:31,230 looking at this chart here, now this is happens to be the day of this recordings, euro dollar, okay, it's a 15 minute time frame. And I want you to
25 00:05:31,230 --> 00:05:41,190 look at it. And maybe some things jump off. Maybe other things aren't so apparent or obvious to you. But I want to kind of like change your perspective
26 00:05:41,190 --> 00:05:50,910 on price action. And I want you to focus in on areas in price action, it doesn't make a difference what timeframe you look at, okay, because price is fractal,
27 00:05:51,450 --> 00:06:00,570 meaning that the things that you can see on one timeframe, they can be seen on the lower timeframe or the higher time frame as well. So it's a phenomenon,
28 00:06:00,600 --> 00:06:10,590 it's, it repeats itself, okay, the same type of formation or setup can be seen on every time frame. So when we look at price, or how I teach my students to
29 00:06:10,590 --> 00:06:20,310 look at price, I want them to first understand what makes the markets move, okay, without understanding that your probabilities of being successful in
30 00:06:20,340 --> 00:06:29,880 developing yourself in a demo trade is highly unlikely. And you mustn't forget about becoming a live fun trader, if you can't do well in demo, you're not going
31 00:06:29,880 --> 00:06:41,010 to do well on a Live account. Everything that I'm teaching here should be done in the medium of a demo. All of my teaching is done in a demo. And that's just
32 00:06:41,010 --> 00:06:50,280 the best way to do it. play in the sandbox, it's risk free, and you learn to develop good habits this way. So what do you do with a demo account? Well,
33 00:06:50,820 --> 00:07:04,470 before I even put on trades, I think that you should be studying price action like this. Okay, I want you to think where every one else's trade idea would
34 00:07:04,470 --> 00:07:16,830 fail them. Now think about that, because when you read books, they tell you buy here, sell here, your stops here. Try to aim for this target. Okay, so they're
35 00:07:16,920 --> 00:07:32,220 geared towards getting you into a move. And the stop losses are pretty generic below an old low above an old high. I have started a new wave of free membership
36 00:07:32,430 --> 00:07:42,600 followers online. And they have shared their enthusiasm with the discovery of something so simple. But it evades most traders, even traders that have been
37 00:07:42,600 --> 00:07:53,460 trading for a long period of time. If you look at periods in price action, where there are equal highs and equal lows, this is the easiest, most obvious price
38 00:07:53,460 --> 00:08:03,750 point to see in charts. Every time you see that, I want you to note that, okay, put a small little trendline horizontal, okay. And that's the only type of
39 00:08:03,750 --> 00:08:16,800 trendline I like. We're delineating previous points where it made equal highs or slightly higher or lower doesn't make a difference if it's exactly. Or if it's
40 00:08:16,800 --> 00:08:26,370 off by one or two pips. The general theme is, if it looks close enough, then it's a double top or a double bottom. Now, retail circles will teach that these
41 00:08:26,370 --> 00:08:35,790 are good areas to trade off of as support resistance. Institutional minded traders think entirely different. They know what's sitting above those equal
42 00:08:35,790 --> 00:08:48,780 highs, it's traders buy stops, and they know what's residing below the equal lows, traders sell stops. So the way institutional mindset is poised about
43 00:08:48,780 --> 00:09:00,150 looking at price action, they're looking for counterparties, they're looking for the opposite side of their trade. So when everyone else is in the retail world,
44 00:09:00,180 --> 00:09:09,480 looking for indicators to give them buy and sell points, institutions are actually thinking where are the orders resting right now. And the easiest way I
45 00:09:09,480 --> 00:09:18,150 have learned to teach traders to start with and there's other ways to do this.  But as far as I'm going to go in the free content, this is the only one I'm
46 00:09:18,150 --> 00:09:28,200 going to teach. And it's a very simple one and literally a five year old can see it in the chart. So anytime you see a double bottom or a double top, put a small
47 00:09:28,200 --> 00:09:38,400 little segment or line above it or below it, delineate and put a notation what it is above double tops on your chart, make a small little notation that it's by
48 00:09:38,400 --> 00:09:50,010 stops and below equal lows, sell stops. And I want you to study, do not demo trade. Do not try to pick the direction I want you to study it for one full
49 00:09:50,010 --> 00:10:00,990 month. Do nothing else. Pick one or two pairs. literally go through and watch how many times this phenomenon takes place. You You can look at it on any
50 00:10:00,990 --> 00:10:10,110 timeframe. But I think a 15 minute timeframe is ideal because you'll see a lot of scenarios pan out. Now I traded two markets today, at the time of this
51 00:10:10,110 --> 00:10:21,630 recording, I sold short the dollar CAD and I also sold short the euro dollar.  Okay, both pairs generally do not move in the same direction. But I knew there
52 00:10:21,630 --> 00:10:30,900 was a strong likelihood that the dollar CAD would sell off aggressively, and therefore any movement down in the euro dollar would be suspect decline, and it
53 00:10:30,900 --> 00:10:38,790 would be reaching for sell stops. So that's going to be the context behind what you see me do later on in this video, that was a recorded trade. So as we're
54 00:10:38,790 --> 00:10:50,400 looking at price, I want you to take a look at this area right in here. Okay, we have equal lows. And price has already went above an old high and broke down.
55 00:10:50,760 --> 00:11:02,880 And it's found an area of consolidation. And this is the very consolidation that I taught you how to trade the New York setup for scalping. I want you to think
56 00:11:02,880 --> 00:11:03,420 about that.
57 00:11:04,710 --> 00:11:14,400 If this is a short, where could you reasonably expect to see price go? Well, obviously, we would expect it to go lower. But targeting what specifically?
58 00:11:14,460 --> 00:11:26,370 Well, we know there's equal lows here. And I like to look at old lows, and old highs and Project 10 to 20 pips beyond those double bottoms and double tops. So
59 00:11:26,370 --> 00:11:38,940 in this double bottom, folks see that as support, price comes down hits it here, retail minded traders are going to see this rally up as a buy. I do not want you
60 00:11:38,940 --> 00:11:48,000 to think that I want you to think the opposite. I want you to think that this whole scenario is just the market getting ready to sink and go lower and attack.
61 00:11:48,450 --> 00:11:57,210 The sell stocks that are below the marketplace here for those traders that have been fortunate enough to be long in all this movement. rode up to this high but
62 00:11:57,210 --> 00:12:05,910 still did not take profits and have open positions and their protective sell stops are going to be trailed up below these lows. So institutional minded
63 00:12:05,910 --> 00:12:16,860 traders, they're going to see this as liquidity. The market will drop down 10 to 20 pips below equal lows, and that in itself, you need to be determining whether
64 00:12:16,860 --> 00:12:26,850 or not that's a trade that's viable for you. So what's a viable trade? I teach that my students as a new trader should think about 20 to 30 pips per week to
65 00:12:26,850 --> 00:12:37,650 start. And that's a very, very low threshold objective. It's easy to get probably doesn't feel that way now as a new trader, but I promise you over a few
66 00:12:37,650 --> 00:12:46,380 lessons, you'll see how very easy it is to find 20 to 30 pips over the course of a week, the problem is going to be your ability to refrain from trading once you
67 00:12:46,380 --> 00:12:56,850 get it in your demo account. You should exercise patience and not do any more.  Wait to the next week. Because this teaches two important and crucial elements
68 00:12:57,120 --> 00:13:04,350 to longevity and trading. Number one, it teaches Patience, patience waiting for the next setup. Now there's gonna be a lot of gyrations in the chart that's
69 00:13:04,350 --> 00:13:09,540 going to draw your attention, you're gonna want to do something with it. There's nothing wrong with paper trading it in other words, making notations and saying
70 00:13:09,540 --> 00:13:19,770 okay, I would hypothetically do this and hypothetically do that. But when you practice, practice, what a demo account doing one execution, manage it to get 20
71 00:13:19,770 --> 00:13:29,880 to 30 pips for the week, and then stop, don't do any more demonstrating. And it also teaches discipline. So you're forcing yourself to follow rules. Everyone
72 00:13:29,880 --> 00:13:39,030 else is taught in the books to trade your edge. Keep doing the same thing over again, while your hands hotplate hard. That's this foolish, we're not gambling,
73 00:13:39,180 --> 00:13:49,590 we're looking for high probability scenarios and setups. So we have to understand what that is. So in addition to and a compliment to the high
74 00:13:49,590 --> 00:14:02,520 probability scalping course, I'm using this first video to kind of like segue into a little bit more detail. I want you to think about what makes price move,
75 00:14:03,240 --> 00:14:16,860 prices move to levels where orders reside. Now orders reside above old highs and below old lows. So if we see double tops and double bottoms, our charts should
76 00:14:16,860 --> 00:14:28,110 be noted like this. Notice there is an absence of any kind of indicator except for now the application of a Fibonacci the Fibonacci is what I taught to use to
77 00:14:28,110 --> 00:14:39,630 get the optimal trade entry. Now what I'm going to show you here is the classic ICT optimal trade entry 62 to seven times retracement level, get short look for
78 00:14:39,630 --> 00:14:50,190 an objective going lower. And here you can see how price did have several opportunities to get short at the 62% retracement level. Now finally expanded
79 00:14:50,190 --> 00:15:03,510 down hit the first scaling objective which is the old low seen here. Then target one is hit target To his hit, and then symmetrical price swing, okay, all of
80 00:15:03,510 --> 00:15:14,940 these levels are in agreement with running below these equal lows. So it's not the fact that the magic is done by the Fibonacci. The understanding is, is
81 00:15:14,940 --> 00:15:25,620 there's traders that have been going long here, double bottom is going to have trailers on there by positions, bringing their cell stops up. So the markets
82 00:15:25,620 --> 00:15:36,720 going to come back and grab those orders. The market does, in fact, collect all the cell stops, and then look at the nice vault higher in price afterwards. This
83 00:15:36,720 --> 00:15:48,120 big response here is post sell, stop read. In other words, after the sell stops have been gathered up and tripped. Anybody that was long now has been knocked
84 00:15:48,120 --> 00:15:56,100 out. So if they bought here or somewhere in this run up here, okay. They have been taken out, they can't capitalize on anything going higher.
85 00:15:57,930 --> 00:16:08,520 But what happens if you don't have the classic ICT optimal trade entry on your chart? So you miss it? What do you do? Well, if you don't get into that
86 00:16:08,880 --> 00:16:21,390 Fibonacci 62 to 70 retracement level as that bounce occurs here. What do you left to do? Do you just let the trade go? I know, over the years, I've shared
87 00:16:21,390 --> 00:16:29,430 examples of me getting into a trade and for those individuals that aren't really interested in learning from me, they they're quick to point and say, well,
88 00:16:29,430 --> 00:16:37,710 that's chasing price. And you're going to see, just because we're not entering at the 62 to 79 retracement level, and we're getting in somewhere down in here.
89 00:16:38,070 --> 00:16:46,860 That's not chasing price. It's absolutely not chasing price. And I'll give you a perfect example of it in this recording. But I want you to think about what can
90 00:16:46,860 --> 00:16:54,810 we do as traders, if we don't get this area up here, because I first taught that this is where you should get in it. The problem is over the years, I've been
91 00:16:54,840 --> 00:17:03,780 inundated with emails stating that folks don't have the courage to get in. And they want to get in but many times they are too afraid to chase price because
92 00:17:03,780 --> 00:17:11,310 they heard me preach, don't chase price don't chase price, my definition of chasing price would be once it breaks below the low here, then you are chasing
93 00:17:11,310 --> 00:17:22,890 price you if it's gone too far, and you're too close to where the targets would be to be able to see a profit. Okay, so what do we do? Well, we can focus in
94 00:17:22,920 --> 00:17:36,630 above that low in this area right in here. And we'll take you right into that area with a little bit more detail. So this is that section of price action we
95 00:17:36,630 --> 00:17:49,170 just zoomed in. And I want you to look at this the up candle right in here prior to this down move. This is what I refer to as a bearish ICT order block. Now,
96 00:17:50,310 --> 00:18:00,330 every upclose candle and every down closed candle does not make a waterblock.  Okay, there has to be a context or storyline behind why the price should be
97 00:18:00,330 --> 00:18:10,770 doing what you anticipated doing. In this case, we think that the cell stops below the marketplace are going to be rated anytime we see it up close candle
98 00:18:10,800 --> 00:18:23,070 smart money will be in that candle selling short. But how can we use that information? Well this very next candle if you read the annotations on the chart
99 00:18:23,070 --> 00:18:31,650 here, price actually returns back to the bearish order block low. Okay, now once the low of this candle right here, price is returning back to a range of time of
100 00:18:31,650 --> 00:18:43,890 this candle is close, it hits that low. At that time, that's a low risk entry.  Despite trading lower initially, we can wait for price to retrace back to the
101 00:18:43,890 --> 00:18:55,830 order block to get in if we know what we're looking for. So this retrade back to the bearish order block is a low risk entry point. Now if the short is valid,
102 00:18:56,160 --> 00:19:08,760 this up close candle will hold price below it until the targets are reached or in this case the sell stuff that we'll be talking below the equal lows. Now
103 00:19:08,760 --> 00:19:19,770 notice also in here as long as price is still above this low. This setup is staged properly to reach for liquidity pool below those equal lows I noted a
104 00:19:19,770 --> 00:19:30,840 moment ago in the recording. Now as long as it's above this low right here, the setup is still valid. But now I want you to think about this formation right
105 00:19:30,840 --> 00:19:40,290 here. This candle already starts moving lower it went down to this point here and then started trading back up higher. At that moment while you're watching
106 00:19:40,290 --> 00:19:50,070 price right in here. That's when you time your entry. Notice that the candles retracing right back to the ICT bearish or blocks low. That's this up close
107 00:19:50,070 --> 00:19:54,150 candles low. That is exactly when your entries made at the market.
108 00:20:01,140 --> 00:20:08,820 institutional traders will short during up moves. Now when price returns back to these up close candles, we can be shorting it as well.
109 00:20:14,370 --> 00:20:23,880 Alright, so now back to our example here. If we see that we can find levels that have double tops and double bottoms, and the market will want to go through
110 00:20:23,880 --> 00:20:33,750 them. Once this occurs, chances are the markets going to go the opposite direction until it reaches another area of liquidity. So the markets always dry
111 00:20:33,750 --> 00:20:44,040 riding back and forth back and forth seeking liquidity above the marketplace and below the marketplace. Below these equal lows, there's a specific range that I
112 00:20:44,040 --> 00:20:52,770 look for it's 10 to 20 pips, sometimes it can be as much as 30 pips but I'd give a working range of 10 to 20 pips so there's only two levels I'm looking for.
113 00:20:52,770 --> 00:21:06,960 It's not a zone. Exactly 20 pips below that low at 118 84. It's 118 64 Okay, really simple, specific price levels, not zones, not ambiguous areas to try to
114 00:21:06,960 --> 00:21:16,800 figure out what's going on. It's exact it's a science we know exactly what we're looking for. But the problem is, what if we are expecting to sell short at that
115 00:21:16,800 --> 00:21:32,130 bearish order block at the low when it retraces back to it? Does this offer potential for us to take? Well, we have an anticipated entry price at 118 91 we
116 00:21:32,130 --> 00:21:41,850 have anticipated 20 pips sell stop raid price at 118 64. So now we're anticipating getting in at 180 91 up here which is the low of this upclose
117 00:21:41,850 --> 00:21:52,980 candle and we already know 20 pips below these lows, the lowest of the two equal lows is what I use, tweet this below that, that gives us a range low of 118 64.
118 00:21:53,370 --> 00:22:06,150 So now we have two price points to determine whether there's enough of a range to make a profit. You take these two numbers and you minus them 91 from 64 gives
119 00:22:06,150 --> 00:22:18,330 us 27 pips so we have anticipated range for profitable movement of 27 pips, that is enough to take the scalp now what I want you to do is I want you to watch me
120 00:22:18,330 --> 00:22:25,440 use everything that this used here, because this is what was going on in my mind before I actually executed and why I took the trade.
121 00:22:31,230 --> 00:22:34,380 Okay, folks, we're gonna be doing a short
122 00:22:39,570 --> 00:22:54,000 waiting for trade read back to the bottom of this candle here to the traits to wanting to 91. Also short not in a hurry if it takes off without me, that's
123 00:22:54,000 --> 00:23:13,410 fine. trading the bearish order block in here. Alright folks, so I'll be looking for that price at 180 91. soon as it hits it at market, I will go short. And my
124 00:23:13,410 --> 00:23:21,540 stop has to be above the upclose candle or bearish order block. But because of the spread in this demo account, it forces you to be 10 pips away. So I'm just
125 00:23:21,540 --> 00:23:40,050 going to elect to go with 119 15 for my stock. Okay, it's about their fingers on the trigger. All I had to do, boom. Okay, now I'm short, my stock is just below
126 00:23:40,380 --> 00:23:53,040 119 15. And I'm focusing my attention right below these equal lows, because I want to see a sell stop raid. So I'm going to put my delineations on where that
127 00:23:53,130 --> 00:24:03,450 would be in terms of targeting. And just in case I have my limit order, lower down to here. Okay, so if it goes down that low, and that's not a stop run, I
128 00:24:03,450 --> 00:24:15,150 have a limit order to catch any accelerated price movement, but I'm really targeting that 20 PIP run. So I have three lots short, I'm watching price, I
129 00:24:15,150 --> 00:24:26,040 want to see a trade below that short term low that we're flirting with and then have a range expansion below there. So this recording is actually sped up for
130 00:24:26,040 --> 00:24:32,940 time purposes. But right now we're retesting the bodies of the candles and the previous short term low and now we're going to be looking for expansion on the
131 00:24:32,940 --> 00:24:44,160 downside. And it'll reach 10 pips and hopefully 20 pips it's about two minutes away from 830 New York time. Usually it's a big volume increase for volatility.
132 00:24:44,790 --> 00:24:55,980 And I'm setting my order up to collapse two of the three standard lots I'm short on euro and I'm watching waiting to see if price gets down to that second level
133 00:24:55,980 --> 00:25:07,170 or 20 pips okay. It's already shown 10 pips of decline. As soon as it hits that lower level line, I'm going to collapse two of them. There you go and move my
134 00:25:07,170 --> 00:25:17,850 stop down to plus one. Now I'm in a situation where I don't really care. But look at the entry points, zero heat, no drawdown on that entry, no drawdown
135 00:25:17,850 --> 00:25:30,030 whatsoever, it was not chasing price. So I have two of the three standard lots banked and now I'm watching price later on. And I'm going to be looking to lower
136 00:25:30,030 --> 00:25:42,570 the stop loss. And I may get lucky here and see a run down to that limit order.  But always keeping in mind that started the trade with the context of it being
137 00:25:42,570 --> 00:25:53,010 just a stop run on sell stops. So I want to be mindful of how much the price shows a willingness to stall or not want to go lower. And I'm watching price in
138 00:25:53,010 --> 00:26:04,440 here to do that. So I've collected a small portion of the position also. Now here's the second time taking something off a very small portion of the original
139 00:26:04,440 --> 00:26:18,870 three standard lots on now it's a small little fragment of the position. Price does one more attempt to break lower. Again, now it's 10 o'clock at time has
140 00:26:18,870 --> 00:26:30,630 passed about hour and a half has gone by. And at this time I'm watching price I do not want to see it reverse or start to show a sign of rejection. Stop has
141 00:26:30,630 --> 00:26:41,130 been lowered to now I'm going to be trying to lock in 20 pips with my stop loss.  As it breaks down I will lower my stop so that way if it does knock me out, now
142 00:26:41,130 --> 00:26:54,030 I have 20 pips locked in 25 pips is locked in. Now we're in an area where it could start to reverse, it could fail to get down to that other limit order. So
143 00:26:54,030 --> 00:27:03,990 I'm not gonna be able to move the stop because the spread won't permit me to do so. So I have to either allow my stop to be hit, or my limit order to be taken
144 00:27:04,020 --> 00:27:15,210 or I can collapse the trade. Now I was away from the computer here at the time, but had I been here, I would have been collapsing right now. The ultimate price
145 00:27:15,210 --> 00:27:19,380 comes back up. And it does in fact, stop me out eventually, as you'll see.
146 00:27:24,870 --> 00:27:33,540 But I profited along the way, taking out small portions because you never know.  You never know if it's gonna go down to your objective. And if you've taken the
147 00:27:33,540 --> 00:27:44,040 risk on initially, that risk needs to be reduced to a point at which where it's no longer impact one and there's my stop loss being tagged in here is the fruits
148 00:27:44,040 --> 00:28:00,480 of that short, very, very predictable in terms of price action, and not a bad little scout for a run on stops. The context was there, everything was outlined.
149 00:28:01,080 --> 00:28:10,620 And you can see the post trade results. Ultimately later on. You can see as we showed in the beginning of the video, your doubts voltage higher after running
150 00:28:10,620 --> 00:28:14,520 those stops. Hopefully found this insightful until next time. I wish you good luck and good trading