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ICT Market Maker Primer Course - 10 - Accumulation - Manipulation - Distribution.srt

Last modified by Drunk Monkey on 2021-06-10 06:19
1 00:00:13,830 --> 00:00:22,260 ICT: Hey folks, welcome back. Okay, this teaching is going to be specifically dealing with accumulation, manipulation and distribution.
2 00:00:29,190 --> 00:00:43,590 Okay, the ICT concepts used in this module the ICT power of three important importance of developing anticipatory play skills, engineering liquidity in the
3 00:00:43,590 --> 00:01:01,140 market, neutralizing liquidity in the market, market making and pairing of orders. What accumulation looks like in bull and bear conditions? Where does
4 00:01:01,140 --> 00:01:16,770 manipulation occur in bull and bear conditions? What distribution looks like in bull and bear conditions? Alright, so we're looking at a crude depiction of a
5 00:01:17,250 --> 00:01:33,870 open high low close bar. And for the purposes of this teaching, every individual bar or candle is going to be referred to as a daily range or daily bar. Okay?
6 00:01:34,380 --> 00:01:46,410 Now, everything I'm going to suggest to you here is applicable to every time measurement, okay, and almost every time interval, if it can be charted, this
7 00:01:46,410 --> 00:01:56,370 same phenomenon or concept can be applied to it. So regardless of what time frame, you can pull up and form into a chart. As long as you have a beginning
8 00:01:56,370 --> 00:02:07,380 time, the highest value, the lowest value and an ending. In terms of measuring time, this concept is applicable, okay. But for the sake of our discussion here,
9 00:02:07,950 --> 00:02:20,790 and for something that you can practice and look for a few times a week, the ICT power three is basically a concept of looking for accumulation, waiting for
10 00:02:20,790 --> 00:02:32,490 manipulation, and then looking for a period of distribution. Now I look at candlesticks, because it helps to be able to see after many years of looking at
11 00:02:32,670 --> 00:02:44,160 price action, it's very hard on your eyes. As long as I've been doing it staring at spending lots of time in charts, both on a screen and on paper, I can see
12 00:02:44,160 --> 00:02:54,780 that my eyesight has diminished over the years. One of the benefits of knowing what you're looking for, is spending far less time in the charts, then most
13 00:02:54,810 --> 00:03:04,680 traders that like me, and before me, we spent a lot of time researching and looking at things. So I gravitate towards candlesticks because it's easier on
14 00:03:04,680 --> 00:03:15,030 the eye, not that there's any magic behind it. But the same concept that seen here with a bullish open, high low close bar to the left is comparable to what
15 00:03:15,030 --> 00:03:25,110 you would see any bullish close candlestick, much easier to see by staring at the Bat versus that little tick to the left or the little tick to the right,
16 00:03:25,110 --> 00:03:36,030 that distinguishes the open close on individual candles or bar. Okay, so back to our discussion. Using the open high low close bar, it's gonna be a lot easier
17 00:03:36,030 --> 00:03:49,890 for me to describe the phenomenon that makes up my ICT power three. And the origination behind this idea was inspired by my mentor Larry Williams. He made a
18 00:03:49,890 --> 00:04:00,360 point and one of his lectures that he ended up repeating several times for a number of years. But he made a point of making a remark about he wished he knew
19 00:04:01,260 --> 00:04:15,330 how the traders or who the traders were, it could be buying below the open or selling above the close on bullish or upclose days. And I took that as a
20 00:04:15,330 --> 00:04:30,600 personal challenge. And I spent the first quarter of my 25 years mastering just that concept, because I felt that it was enough for me to work towards it.
21 00:04:31,980 --> 00:04:41,190 Cracking that code, if you will. And I think I've done it. I thought it to other people. So I know that it's something that is real, it's tangible. It can be
22 00:04:41,220 --> 00:04:52,890 repeated not only in my own results, but other people that have learned from me.  But it all hinges on the reference point that starts our time interval. And
23 00:04:52,890 --> 00:05:04,560 again, we're referring to every bar or open high low close bar depiction in my diagrams as it represents Have one daily bar. Okay, so a full 24 hour period, it
24 00:05:04,560 --> 00:05:12,930 does not matter that if it's forex, or commodities or bonds or whatever it is, if it's a market, it can be measured in time intervals, the highest value, the
25 00:05:12,930 --> 00:05:21,270 lowest value, a time at which it starts trading in time it ends trading, you only need is for reference points. So the open high, low and close is all we're
26 00:05:21,270 --> 00:05:24,570 concerning yourself with here. Now, the first of the four
27 00:05:25,380 --> 00:05:40,710 is the opening price. Now, for definition terms, this is the initial value price prior to any imbalance, and I'll talk more about that as we go. The closing
28 00:05:40,710 --> 00:05:55,200 price is the ending value price, post price imbalance. Okay, the portion that makes up the range between the open and close is referred to as range expansion.
29 00:05:55,530 --> 00:06:05,730 And this is a dynamic price imbalance. Now this can be a bullish or bearish imbalance relative to the open. But for example sake, our first one's going to
30 00:06:05,730 --> 00:06:18,660 be referring to a bullish up close. So this would be a bullish range expansion, or a dynamic price imbalance of a lot more movement to the upside, seeking a
31 00:06:18,660 --> 00:06:34,020 higher price above the initial value price of the opening price. In layman's terms, we're looking for a bullish close. Okay, now, as far as it goes in terms
32 00:06:34,020 --> 00:06:43,200 of accumulation, manipulation, and distribution or power three, the first thing we have to determine is what is accumulating. Now if we're bullish on the
33 00:06:43,200 --> 00:06:51,720 marketplace, we would be looking for accumulation in the form of long positions building up, it's going to be around that opening price. And I'll talk more
34 00:06:51,720 --> 00:07:03,540 about the opening pricing and future tutorials. But the opening price just above it, or below it when we're bullish. That's where Long's are accumulated. Now
35 00:07:03,540 --> 00:07:15,450 who's accumulating those long positions smart money. When we're bullish, and we're anticipating a bullish range expansion to the upside, okay, or higher
36 00:07:15,450 --> 00:07:28,710 close, we would be hunting a manipulation cycle immediately after the opening price. So on a daily range, the opening price if we're bullish, we want to be
37 00:07:28,710 --> 00:07:39,810 buying at that opening price. or below it ideally, why would we want to be buying below the opening price when we're bullish? Because the market makers are
38 00:07:39,810 --> 00:07:50,460 going to be looking to engineer short liquidity? What does that mean? If a market breaks quickly, below an old low, there are traders that look to be a
39 00:07:50,460 --> 00:08:05,340 breakout entry. So they'll look to sell short on a stop this engineering forces liquidity in the marketplace to sell at a very, very low price. That run below
40 00:08:05,340 --> 00:08:12,180 an old low or quick sudden movement one Tice traders that are on the sidelines, just watching price. And you know what that feels like if you watch lower
41 00:08:12,180 --> 00:08:22,650 timeframe charts, any sudden move lower, your heart starts to have palpitations, you get excited, you think it's going to keep going lower. What happens, you
42 00:08:22,650 --> 00:08:32,370 take the bait, you go in there and you sell short and the market stops on a dime reverses and goes north. immediately below the opening price on the daily range
43 00:08:32,580 --> 00:08:47,880 when it's bullish. This in initial drop down is very significant because it's going to engineer willing parties to sell short. That selling short will flood
44 00:08:47,880 --> 00:09:01,440 the market with the counterparties to Smart Money wanting to buy it at a deep, deep discount. The other form of manipulation that takes place when it's bullish
45 00:09:01,830 --> 00:09:13,140 is neutralizing long liquidity. That means there's individuals it's probably already long, or just recently bought near the opening price in the drop down
46 00:09:13,140 --> 00:09:24,150 below the opening price will upset their long position. In other words, it'll just run their stop, not to engineer them into a new lower entry, but to knock
47 00:09:24,150 --> 00:09:33,900 them out of an initially well placed position. So we're seeing two conditions are happening at the same time. The opening price and below it when we're
48 00:09:33,900 --> 00:09:45,510 bullish is knocking individuals out. That's right that would otherwise be profitable, the market rallies and it's also inducing or engineering of short
49 00:09:45,510 --> 00:09:57,000 term sentiment shift to bearishness by running short term lows. Not only we take out long holders with their sell stops but traders that want to sell short on a
50 00:09:57,000 --> 00:10:05,670 stop. They would be in they will be placed in on the market on the wrong side and over selling short in an otherwise bullish market.
51 00:10:09,000 --> 00:10:20,760 So finally, as we interpret this, the manipulation is we're looking how the market makers pair orders by pairing the sell stops. With smart money buying
52 00:10:20,760 --> 00:10:36,390 interest, we can see the manipulation cycle as it really is a rung below the opening to accumulate long positions before the big move. And finally, the
53 00:10:36,390 --> 00:10:47,160 distribution cycle where Smart Money pairs its long exits, selling out their Long's with pending buy interest now that pending buy interest is going to be in
54 00:10:47,160 --> 00:10:57,150 the form of buying above an old high that would be a breakout artists idea.  They're gonna want to break out above a previous high and they would view that
55 00:10:57,150 --> 00:11:07,650 as strength buying strength. While smart money will look to sell their long position to those breakout artists that want to buy above an old high or those
56 00:11:07,650 --> 00:11:16,350 individuals that would probably try to sell short intraday they would have a buy stop above intraday high, smart money would look to run through that intraday
57 00:11:16,350 --> 00:11:26,160 high and sell it to those buy stops, so their long and exits would be paired with a short term intraday swing high. If we seen a nice little retracement
58 00:11:26,160 --> 00:11:37,590 lower intraday before the close, that's for an area of distribution would come in. So we're looking at a reverse idea here, open High, Low close with a down
59 00:11:37,590 --> 00:11:48,030 close. And again, this represent notation is a crude depiction of a daily open high low close bar. And we could see that same thing in the form of a bearish
60 00:11:48,300 --> 00:11:57,540 closed candle much easier on the eye, but we're gonna take our focus back to the open high low close bar. And again, the opening price, much like we just said,
61 00:11:57,540 --> 00:12:10,560 but just for completeness sake is the initial value price prior to any imbalance. The closing price is the ending value price of that time interval
62 00:12:10,560 --> 00:12:19,950 that you're measuring towards what timeframe you're looking at, if it's daily, it's the ending value for the daily range post or after the price imbalance. In
63 00:12:19,950 --> 00:12:30,360 other words, the movement took place between the open and where it's now closing. And we have the range expansion cycle that is basically dynamic price
64 00:12:30,360 --> 00:12:39,300 imbalance. So between the opening price and the closing price when we're bearish. This is what we would be expecting or anticipating and price came a
65 00:12:39,300 --> 00:12:51,510 lower close. Now in the form of power three, what is accumulating wealth from the opening when we're bearish. short positions are building up and who's
66 00:12:51,510 --> 00:13:05,250 building up short positions smart money. At the opening price, or just above the opening price when we're bearish, we would be anticipating manipulation. And
67 00:13:05,250 --> 00:13:17,610 what form of manipulation will we expect to see engineering long liquidity, no words, we're looking for a quick sudden movement higher to entice breakout
68 00:13:17,610 --> 00:13:29,490 artists that want to buy on a breakout. And they will be placed in on the wrong side of the marketplace. Another form of manipulation this would be neutralizing
69 00:13:29,520 --> 00:13:37,170 short liquidity. In other words, those individuals that would already be short in the marketplace that would otherwise profit from the future coming decline.
70 00:13:38,400 --> 00:13:49,140 They are knocked out by having their buy stops tripped. So they're neutralizing their short position. And their short position being neutralized is a buy stop
71 00:13:49,140 --> 00:13:57,240 so that buys start to hits the market as a market order. Smart Money will sell to their willing buy stop somewhere it's if the market trades up to your buy
72 00:13:57,240 --> 00:14:08,610 stop that buy stock becomes a market order to buy at the market smart money will be Counterparty to that they will sell to those buy stops. But their sell
73 00:14:08,610 --> 00:14:19,740 position is to ride it lower and make money. Many of you manipulation in its truest sense is in this form when we're bearish at the opening price or above it
74 00:14:20,130 --> 00:14:32,970 by stops are being paired with short interest on the form of smart money. And finally, at the end of the day, the distribution cycle is seeing where Smart
75 00:14:32,970 --> 00:14:41,340 Money pairs at short exits are covering with pending sell interest. In other words, smart money is going to be short and to gather short positions they have
76 00:14:41,340 --> 00:14:53,220 to buy it back and they will be targeting some old low. What will be resting below an old low self stops. Those cell stops once they're triggered. They
77 00:14:53,220 --> 00:15:02,760 become market orders to sell at the marketplace which floods the market with sellers and the best time to cover Short is when there's a flood of sellers in
78 00:15:02,760 --> 00:15:08,010 the marketplace willing to sell at a low price. And this would be the distribution cycle of the daily range.
79 00:15:11,190 --> 00:15:19,020 Okay, so what does accumulation look like in a bull condition or when it's bullish? It's not important that we zoom in here and see the details of this.
80 00:15:19,020 --> 00:15:27,660 Once you see the overall characteristics in the green shaded area, you can see that there's a consolidation around the opening price. And that consolidation
81 00:15:27,990 --> 00:15:38,790 leads way to a decline, which gives us the framework for what does manipulation look like in a bull condition? Well, this is what manipulation looks like, right
82 00:15:38,790 --> 00:15:48,330 before the market starts to trade higher after consolidation, when the accumulation of Long's are being made. The problem is, you see that decline
83 00:15:48,360 --> 00:16:00,150 below that green shaded area as weakness, and who would be wanting to buy ahead of that smart money traders, okay, they have very deep pockets in the market has
84 00:16:00,150 --> 00:16:15,030 a tendency of creating this fake move, okay, where in taxes or induces the opposite mindset or sentiment, this drop down of that consolidation, when we're
85 00:16:15,030 --> 00:16:24,270 overall bullish, is manipulation, it's knocking out short term lows, so anyone that's long or knocked out, we can profit from the up move. And it's also
86 00:16:24,270 --> 00:16:33,600 putting traders in on a breakout short, and they're gonna be on the wrong side of the marketplace. And finally, at the highs of the day, we have our
87 00:16:33,600 --> 00:16:44,640 distribution, where Smart Money exits their long positions by selling above an old high, whereby stocks will be resting. So this bizstats would be hit floods
88 00:16:44,640 --> 00:16:53,820 the market with buy stops buyers at a higher price, smart money to sell their long positions to higher buying interest traders in the form of their buy stops
89 00:16:53,820 --> 00:17:09,450 being tagged. Okay, and what does accumulation look like in a bear condition, we have a consolidation and price moves higher, which would be the manipulation.
90 00:17:09,540 --> 00:17:19,380 Now if you look at the left side of the chart, you'll see a double top. That's exactly where what bizstats would resign. Okay, lesser informed traders would
91 00:17:19,380 --> 00:17:29,280 have their biceps resting a lot that it was viewed as a stiff resistance price point. And those levels aren't too clean, the market will in fact want to go
92 00:17:29,280 --> 00:17:39,690 through their probe it for buy stops, those buy stocks are gonna be triggered.  Anyone that's short, is now allowed to be profitable in the move going lower. So
93 00:17:39,690 --> 00:17:48,840 they're neutralizing their shorts, by hitting their bus stops. Also breakout artists that see that equal height to the left of the chart and the
94 00:17:48,840 --> 00:17:58,440 consolidation that move out of that day would be buying that on a breakout or trying to buy strength in their eyes. Both are incorrect. And what we're
95 00:17:58,440 --> 00:18:07,710 actually seeing is a market driving higher, the payor traders to buy higher, or at a high price and short sellers on the Smart Money camp, they're going to be
96 00:18:07,710 --> 00:18:16,140 selling short to those individual that want to buy at a high price to make a profit as the market moves eventually lower. Towards the end of the day, we see
97 00:18:16,140 --> 00:18:24,360 the distribution cycle come in, where short holders in the Smart Money camp are going to be looking to collapse their short positions. To get a short position,
98 00:18:24,360 --> 00:18:34,530 you have to buy it back. You have to look for an area to run below old lows. You look at the original consolidation 20 pips below that that's what we see the low
99 00:18:34,530 --> 00:18:42,660 that they form. It's exactly where smart money would be collapsing their short positions where they trade. And we see the ending cycle their distribution,
100 00:18:42,960 --> 00:18:55,680 smart money collapse in their short in the form of buying it back at an area where sellers below the market would be interested in selling. Overall if you
101 00:18:55,680 --> 00:19:05,070 understand this concept and there's lots more information that's coming in by way of my tutorials. You can look at the marketplace like this and see the
102 00:19:05,070 --> 00:19:12,540 original consolidation here in the green market reaches down below the consolidation into an area of liquidity, which is 10 pips below equal lows,
103 00:19:12,690 --> 00:19:20,880 there sell stocks are triggered where smart money will be buying, once they sell stops or tripped. They're buying the low of the day the market rallies up, we
104 00:19:20,880 --> 00:19:30,480 have an expansion move or rains expansion up into a move of running 20 pips above the old high in your distribution cycle goes into the marketplace, and as
105 00:19:30,480 --> 00:19:39,300 a complete daily range using the power three concept that I've outlined here. So hopefully, you found this teaching insightful. There'll be more built on this
106 00:19:39,330 --> 00:19:43,440 with the future tutorials. And until next time, I wish you good luck and good trading