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ICT Market Maker Primer Course - 09 - Time and Price Theory.srt

Last modified by Drunk Monkey on 2021-06-10 06:18
1 00:00:10,110 --> 00:00:21,810 ICT: Okay, folks, welcome back. This teaching will be specifically dealing with time and price theory. Now while this is going to be a generalized overview, and
2 00:00:21,810 --> 00:00:30,300 more or less an introduction to time and price theory as I teach it is a very vast subject and I go into greater detail in my free tutorials and in greater
3 00:00:30,300 --> 00:00:35,910 detail in my premium mentorship, but I think you'll find this teaching will be beneficial to you nonetheless.
4 00:00:43,320 --> 00:00:57,090 Okay, folks, everything you seek in price action is found in this formation. The open the high, the low and the close. The ICT concepts used in this module will
5 00:00:57,090 --> 00:01:08,100 be the importance of time and price. We're gonna be revisiting the power three, and we're gonna be specifically teaching monthly time and price characteristics,
6 00:01:08,220 --> 00:01:23,070 weekly time and price characteristics. And finally, daily time and price characteristics. Okay, ICT power three, and the monthly open. Now price action
7 00:01:23,070 --> 00:01:34,860 is fractal in nature. That means everything that you can see in terms of a price pattern on a one minute chart on a five minute chart can be seen on a monthly
8 00:01:34,860 --> 00:01:47,430 chart or weekly, any timeframe, any interval of time measurement that plots price. The fact that we can see a pattern on any specific timeframe. price
9 00:01:47,430 --> 00:01:59,250 action has a generic characteristic to it. So whatever we see on one timeframe can be easily replicated and seen on a lower timeframe or a higher timeframe. So
10 00:01:59,250 --> 00:02:10,920 when we see price patterns, it's not that one timeframe is better than the other, per se. But there is an emphasis or significance that's placed on the
11 00:02:10,920 --> 00:02:20,610 higher timeframe charts over the lesser timeframes. For instance, the monthly has the most significance to me in my analysis. And because it gives me the
12 00:02:20,610 --> 00:02:28,920 ability to look at a whole year or multi years, or I can look at it from a quarterly basis or a biannual basis and always in six month intervals. So I
13 00:02:28,920 --> 00:02:36,600 don't need to see any other timeframe because the monthly gives me all the depth and detail that I would ever need from a macro standpoint. Which brings me to
14 00:02:37,500 --> 00:02:48,960 the purpose of using a monthly chart is that it provides a macro institutional bias so we can see what large institutions are doing or what their sentiment is
15 00:02:48,990 --> 00:02:59,610 based on what these higher timeframe monthly charts are revealing in price action. In a nutshell, if we are doing our analysis on the monthly chart, and we
16 00:02:59,640 --> 00:03:10,110 deem that monthly chart to be bullish, we as traders and analysts, we look for buying opportunities at the opening price or below the opening price. If we have
17 00:03:10,110 --> 00:03:21,600 come to the conclusion that the monthly chart or perspective on the monthly is bearish, then we are focusing our analysis on selling short at or above the
18 00:03:21,600 --> 00:03:31,830 monthly opening price. Now large institutions use algorithmic systems that key off of monthly and weekly opening prices. Since there are massive amounts of
19 00:03:31,830 --> 00:03:44,370 volume in these entities actions, we would do well to imitate or mimic their actions and directional bias. So let's take a closer look at this monthly chart.
20 00:03:44,370 --> 00:03:56,550 This is the euro dollar. And if you go on through my material, there's a lot of things that I teach by way of directional bias. Picking a direction, sticking
21 00:03:56,550 --> 00:04:05,220 with a specific direction, looking for key levels, looking for key targets.  Looking at this sample size of price action on a monthly basis for the euro
22 00:04:05,220 --> 00:04:14,520 dollar, I want you to take a look at what you're seeing in price action. Now, obviously, majority of what's already happened is all hindsight but it's for
23 00:04:14,520 --> 00:04:26,040 your learning. For the individuals that have gone through my mentorship in 2016 2017, they know that I was bullish in the first quarter of 2017 with the
24 00:04:26,040 --> 00:04:36,990 euro dollar, and I called a specific price point of 120. At that time, several months later, here we are in December of 2017. You can see we did in fact hit
25 00:04:36,990 --> 00:04:47,790 that 120 mile marker on the eurodollar. It was based on what I'm about to show you here. A lot of other things they go along with it to help fine tune that
26 00:04:47,790 --> 00:05:02,520 detail. But generally it started with this concept. So do you see anything that stands out in the chart for instance, This old low over here, they're relatively
27 00:05:02,520 --> 00:05:12,540 equal. Price makes an attempt to drop lower and does in fact go below these equal lows. And then it does what it trades back above those lows. And then we
28 00:05:12,540 --> 00:05:22,200 have a swing low form, we have a candle to the left with a higher low a candle in the center, and a candle to the right. So there's our three bar pattern or
29 00:05:22,200 --> 00:05:33,210 swing low. And then we wait for that third candle to be penetrated, we have it here. So that way, now we can start looking for being bullish on the monthly
30 00:05:33,210 --> 00:05:38,220 chart for the euro dollar. We see the previous month,
31 00:05:38,640 --> 00:05:50,370 even though I had a weaker close, it still was up close. And because we broke the swing pattern, core swing low to be loud valid, every subsequent candle
32 00:05:50,700 --> 00:06:04,110 should be viewed as bullish until we get to some key resistance. This is a key Hi, it's called the market turn said we're gonna have to keep our focus on here.
33 00:06:04,650 --> 00:06:15,210 And just like we saw market movement and go below this low here. True support resistance isn't line in the sand, it can't go any higher than that, we
34 00:06:15,210 --> 00:06:21,240 understand that there's going to be a willingness, I want to go through that high to seek some measure of liquidity just like it looked for liquidity below
35 00:06:21,240 --> 00:06:32,370 these lows. So with those ideas in mind, let's add some lipstick to this chart.  So now we have a long term key low here. And we will have long term reversal in
36 00:06:32,370 --> 00:06:43,680 the form of a false break below. Swing low forms and then I started delineating all the opening prices on the subsequent months. So every one of these candles
37 00:06:43,680 --> 00:06:54,480 represents one full month data. And then I noted that long term key high here.  So we will be looking forward down here a move above this high. Which if you
38 00:06:54,480 --> 00:07:03,120 think about it, that is a lot of pips. So I know I've been doing a lot of work on Twitter, and on my YouTube channel to be active with day trading and
39 00:07:03,120 --> 00:07:14,250 scalping, just to show my proficiency in studying and reading price action, and executing on those lower timeframes. I have tools and applications that work on
40 00:07:14,250 --> 00:07:23,070 higher timeframe charts like this, if you can't do day trading, I have methods that help you do these types of things. I personally do not like this style
41 00:07:23,070 --> 00:07:31,680 trading, it's too slow and doesn't give me enough action. And I just Excel as a short term intraday trader and day trader and short term trader for one shot one
42 00:07:31,680 --> 00:07:39,480 kill, there are many students of mine, that can't do that because of their businesses that they're running or their jobs or they're just unable to do it
43 00:07:39,480 --> 00:07:49,140 because of their family commitments. They just can't do it. So they need a larger or higher timeframe perspective. And this is one way you can do that. So
44 00:07:49,140 --> 00:07:57,420 we have a monthly chart here, with the opening prices after a swing low and a violation of an old low. And once we try to start a trade back above that low
45 00:07:57,420 --> 00:08:07,740 here, we start looking for validation with this swing low being, in fact, valid.  And we have that one this month here. So we had plenty of time several months
46 00:08:07,740 --> 00:08:18,930 before, this month begins the hunt for Long's. So it gives you a lots of time to get prepared. You don't have to be in front of your charts every five seconds.
47 00:08:19,290 --> 00:08:27,810 In fact, you don't have to probably watch it every day, you just got to be aware that this swing low has to be validated. And it does it here when it starts to
48 00:08:27,810 --> 00:08:40,680 trade above this candles high. So with this information, let's take a closer look. And now we have the daily chart of the euro dollar. And what I have here
49 00:08:40,680 --> 00:08:52,170 is every specific monthly opening price delineated with a small little horizontal trend line segment. So each little short trend line that's moving
50 00:08:52,170 --> 00:09:02,400 horizontally. Starting with this one here, this represents a monthly open with the opening price of the month. And this is another one. This is another one.
51 00:09:02,430 --> 00:09:11,730 This is another one, another one. And finally, the one appears the last one I'm gonna reference in this specific teaching. So we're going to start with April
52 00:09:11,730 --> 00:09:25,500 2017. And we have seen potential long term reversal. And we're gonna be looking for buying opportunities. And we're gonna look for validation to see that in
53 00:09:25,500 --> 00:09:34,470 price action. Now if we're bullish, we want to see signatures in price action that support that idea. That means the opening price and below it we want to see
54 00:09:34,470 --> 00:09:45,150 some bullishness or buying So is there a swing low that forms below the opening price on the monthly and is it showing energetic price action once that low
55 00:09:45,150 --> 00:09:56,280 forms and does it move higher with magnitude strength and speed? While we have that here, and not too long after that we start seeing price move higher.
56 00:09:56,280 --> 00:10:04,260 Obviously I'm using this chart with the benefit of hindsight for time purposes.  To save a lot of time in recording, but you can see that reference point there
57 00:10:04,260 --> 00:10:13,350 below the opening price of April gives us a nice buying opportunity, you can look at many instances overlapping for optimal trade entry at that price point.
58 00:10:15,480 --> 00:10:24,450 And we're moving to the next month, this is may 2017. Again, we're looking at that opening price of may 2017. And we want to see a willingness to go below the
59 00:10:24,450 --> 00:10:34,770 opening price and then find buying. We have that here. And again, very, very strong reaction, and price action, and the market starts to move rather
60 00:10:34,770 --> 00:10:38,970 aggressively on the upside. Moving right along,
61 00:10:39,780 --> 00:10:49,470 we're going into the next month, this is June 2017. And again, we have the opening price of June. And below the opening price we want to see buying, we see
62 00:10:49,470 --> 00:11:01,290 that, in fact does come to fruition here. Very nice accelerated movement on the upside. And again, now we have July of 2017, the opening price, delineated. And
63 00:11:01,290 --> 00:11:11,220 we want to see a movement below the opening price and then buying nice optimal trade entry long pattern there as well. Very, very explosive price action up to
64 00:11:11,250 --> 00:11:26,430 that horizontal maroon color line. That is that old long term high. So now we hit that in the month of July. at that price point. Now we have to start easing
65 00:11:26,430 --> 00:11:35,460 off of our expectations of being bullish doesn't mean completely abandon the idea, it just means that we have to slow down and not be so aggressive. But we
66 00:11:35,460 --> 00:11:45,840 can be aggressive and looking for that long term high to be traded to every previous month. But now in July, we can see price did in fact hit that level. So
67 00:11:45,840 --> 00:11:55,500 we have to be mindful, they could stop now the next month here is August of 2017. Some similar pattern, we have movement below the opening price of August.
68 00:11:56,520 --> 00:12:10,620 And again, a nice little rally up and moving. Well, it's about 400 plus points or pips above the old long term high. So obviously, we can't use a 10 to 2030
69 00:12:10,620 --> 00:12:19,410 PIP sweep idea like we do with intraday charts looking for movements, beyond old highs and old lows or double bottoms and double tops. When we are using longer
70 00:12:19,410 --> 00:12:29,010 term timeframe levels, we have to have a greater expectation of terms of the the magnitude or range of how far it'll move past those price points. Now, I don't
71 00:12:29,010 --> 00:12:39,900 have a science to that. I do use Fibonacci to help me get to those levels. It's not always accurate, sometimes it's fall short of it. And sometimes it goes
72 00:12:39,900 --> 00:12:46,680 beyond what I thought was gonna happen. And that's technical analysis and trading, you're never going to be perfect, you're never going to be right. But
73 00:12:46,740 --> 00:13:02,130 over time, you're gonna see that this method serves you very, very well. Now, we can take these ideas also, and transpose them to the weekly opening price. Now,
74 00:13:02,130 --> 00:13:10,200 this is going to be the framework for a lot of the things that I teach in my mentorship for my one shot one kill, which is essentially trading the weekly
75 00:13:10,200 --> 00:13:18,930 range. Now, I'm not going to be teaching that here. But I will give you some of the signature points that will help you with the free tutorials to get really
76 00:13:18,930 --> 00:13:26,370 close to how I do one shot one kill. But if you want to learn it, you can go through the mentorship and get all the fine details about how to do it. Now I
77 00:13:26,370 --> 00:13:38,760 look for it, get the weekly hiring the weekly lows. Well, if we go through this specific idea with weekly opening price, again, price actions fractal and what
78 00:13:38,760 --> 00:13:49,020 we would see on a monthly basis, we would expect to see that same thing on a weekly basis. So the weekly charts provide an intermediate institutional bias.
79 00:13:49,170 --> 00:13:59,700 That means it's not a long term bias, but it's not short term either. So it's a pretty good timeframe to look for, like swing trades, or even a little bit
80 00:13:59,700 --> 00:14:08,280 longer term short term trades, not just one or two day trades, and duration long term like two weeks to a month. This is the perspective you want to be looking
81 00:14:08,280 --> 00:14:18,630 for to get those types of setups, but what we use for the weekly open, if we know that our analysis leads us to a bullish weekly perspective, we're gonna be
82 00:14:18,630 --> 00:14:27,780 focusing on buying at or below the weekly opening price when bullish and when we're bearish on the weekly, we're gonna be focusing on selling short at or
83 00:14:27,780 --> 00:14:37,830 above the weekly opening price. Now large shifts in price that originate from the macro monthly bias will provide the framework to weekly opening price
84 00:14:37,830 --> 00:14:47,910 setups. Now here's the key point. Make sure you remember this because it's not that every week is going to be bullish or bearish. Not every week will move in
85 00:14:47,910 --> 00:14:57,480 the macro directional bias. But however, there will be some weeks that move violently in agreement with the macro monthly bias. So just like we have
86 00:14:57,660 --> 00:15:07,890 retracements on any other time frame We may be longer term bullish on the macro macro monthly perspective. And weekly we may be enduring some measure of
87 00:15:07,890 --> 00:15:18,030 retracement or consolidation because this chart shows four weeks of price action. And I've highlighted or delineated the opening price for every
88 00:15:18,060 --> 00:15:31,170 respective week here. And I want you to take a look at the response. That price shows below the opening price while we're bullish. And then, while price makes a
89 00:15:31,170 --> 00:15:35,340 really nice buying opportunity here in that green shaded area, and it really vaults higher,
90 00:15:36,570 --> 00:15:43,740 price gets a little too far ahead of itself and needs to retrace, so the next week. So even though we have that weekly opening price and it does trade below
91 00:15:43,740 --> 00:15:54,810 it, we have to be mindful that it may be needing to retrace deeper the following after a retracements like consolidation, we'd have another opportunity where
92 00:15:55,140 --> 00:16:04,350 price shares a willingness to show buying strength below the opening price of the weekly range. And again later in the week on Thursday of that particular
93 00:16:04,350 --> 00:16:12,330 week. We see another opportunity after taking out the equal lows that were formed on Monday and Tuesday of this particular week. There was two
94 00:16:12,330 --> 00:16:20,700 opportunities to buy Monday and Tuesday offered profitability. But then on Thursday, I had a deep retracement retracing down below the Monday and Tuesday's
95 00:16:20,700 --> 00:16:31,890 low. But if you look at the previous week, the Wednesday this low here to this high here. This is an optimal trade entry long. And it's nice how this overlaps
96 00:16:31,890 --> 00:16:45,270 with a run on sell stocks below equal lows. And we see a subsequent explosive move to the upside. And then the following week on Monday of that week, we see
97 00:16:45,270 --> 00:16:54,660 that does create a very nice buying opportunity and an explosive price movement and Sue's on money trading into Tuesday. Then going Wednesday and Thursday.
98 00:16:55,530 --> 00:17:05,220 There's a retracement in New York, up Thursday has an exclusive price move again. That's when we see a trade up into that long term weekly high. Okay,
99 00:17:05,250 --> 00:17:15,210 moving right along to complete this teaching, we're going to be referring to now the opening price on the daily. So, again, price action is fractal. And what we
100 00:17:15,210 --> 00:17:24,000 would see on other timeframes can be seen on the daily as well. But the daily chart provides us a short term institutional bias. So in other words, what the
101 00:17:24,030 --> 00:17:32,070 large institutions insurance companies and banks, what they're looking at relative to the daily timeframe, that's going to be their short term. Now we
102 00:17:32,070 --> 00:17:40,770 look at a daily chart from an analyst standpoint, because as day traders and scalpers the dailies, like referred to as a higher time frame, for institutional
103 00:17:40,770 --> 00:17:47,910 minded traders, the daily is just like that's their executable timeframe. That's where they're doing most of their work. The orders are based around that
104 00:17:47,910 --> 00:17:57,630 timeframe. And that's why it's important no previous day's highs and lows, weekly highs and lows, intra week highs and lows and knowing what the liquidity
105 00:17:57,660 --> 00:18:07,920 reference points are around those specific levels. That's going to help you in your development as a technical analyst. But if we're bullish relative to the
106 00:18:07,920 --> 00:18:17,940 daily timeframe, we are looking to be buying at or below the daily opening price. And if we're bearish on the daily, we're gonna be focusing on selling
107 00:18:17,940 --> 00:18:29,280 short at or above the daily opening price. Now, the market will gyrate higher and lower relative to the monthly and or weekly perspective. As we mentioned in
108 00:18:29,280 --> 00:18:37,440 the previous slides, the highest probabilities and trading the daily chart is when both the monthly and weekly support the trade idea that you would be using
109 00:18:37,470 --> 00:18:46,350 or hunting on dealing. Focusing on the elements of time and price will greatly assist you in analysis and overall development. As a technical analyst. If we
110 00:18:46,350 --> 00:19:00,540 look at this representation of a daily range here, notice I'm only highlighting one specific day. The teaching that I just gave you here is not to promote the
111 00:19:00,540 --> 00:19:09,570 idea that if the monthly is bullish, every week is going to be bullish below the opening and or every day is going to be bullish below the daily opening.
112 00:19:11,460 --> 00:19:21,690 Equally so when the weekly is bullish, it does not translate into every day below the opening price is bullish. There's going to be times when you have to
113 00:19:21,690 --> 00:19:33,240 blend some analysis concepts to arrive at the highest probability setups. Even day trading is not every day trading. I've said this so many times over the last
114 00:19:33,240 --> 00:19:44,400 10 plus years treating just forex alone. And I want to ingrain that in your mind that even though we have tools and I've shown this in the last two months
115 00:19:44,430 --> 00:19:56,730 online, every single day finding a setup. I do that to show you what's available in terms of opportunity and understanding. I am in no way shape or form trying
116 00:19:56,730 --> 00:20:06,990 to promote the idea that you can find a set up yourself every single trade I've been doing this for 25 plus years. And it takes a lot of effort and experience
117 00:20:06,990 --> 00:20:15,750 to get to that level. And I'm sometimes wrong too. But many of my new students will see that and they'll say, Well, you know, I'm going to do the same thing.
118 00:20:16,380 --> 00:20:25,230 And I'm not trying to promote that idea. This teaching was to highlight the importance of going from higher timeframe down to a lower timeframe, using a
119 00:20:25,230 --> 00:20:34,710 similar concept that overlaps and dovetails very nicely. But I want you to go through your charts and study when there are really good opportunities like this
120 00:20:34,710 --> 00:20:43,590 example here for the daily buying below the opening price, where does that sit in relationship to what the weekly range and the monthly range and their
121 00:20:43,590 --> 00:20:53,220 respective opening prices? Because if you study that, you will figure out where the highest probability setups are, doesn't mean that you're getting the entry
122 00:20:53,220 --> 00:21:02,520 points. It just means that you're highlighting the proper stage when these explosive price moves that move directionally biased happen. So hopefully you
123 00:21:02,520 --> 00:21:06,810 found this teaching insightful, and until next time, I wish you good luck and good trading.