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ICT Market Maker Primer Course - 17 - The ICT ATM Method.srt

Last modified by Drunk Monkey on 2021-06-10 06:19
1 00:00:11,610 --> 00:00:16,800 ICT: Hey folks welcome back in this teaching terming specifically dealing with the ICT ATM method.
2 00:00:23,820 --> 00:00:38,430 Okay points of focus in this module, we introducing the ICT, ATM method, ATM and bearish conditions with targets and stop placement. ATM in bullish conditions
3 00:00:38,580 --> 00:00:58,140 with targets and stop placement introducing the ICT ATM method. Alright, it's a standalone price action pattern. The pattern capitalizes on stop runs. Find this
4 00:00:58,140 --> 00:01:12,030 pattern on the 60 minute chart. It's relatively easy to spot and you can do it quickly and finding it. It's pretty much a well, it's a rejection level. Okay,
5 00:01:12,030 --> 00:01:25,740 now see what that looks like. It's pretty easy to trade. And wonderful thing is it's a complete trading model for setups. Guess what don't get the ATM in
6 00:01:25,920 --> 00:01:35,940 bearish conditions. Now once you take a look at this diagram on the right hand side, okay, and let the image burn in for a couple of minutes. And as I'm
7 00:01:35,940 --> 00:01:47,520 talking to you just kind of like study what it's depicting. And I want you to think about how, when we start as traders, generally the idea of support
8 00:01:47,520 --> 00:02:00,240 resistance is rather early in our introduction to technical analysis. And the problem I found when I first started as a trader is what support resistance
9 00:02:00,240 --> 00:02:09,510 levels do I use is, I mean, there's so many you could possibly have on your chart, which ones should I be focusing on. So my work has been trying to
10 00:02:09,510 --> 00:02:20,070 simplifying that so that way I can teach it to my children. Because of this, I've been able to make pretty detailed tutorials for people around the world to
11 00:02:20,070 --> 00:02:29,130 learn from. And I've developed a little bit better ability to teach over the years doing it. But initially, when I first started, I gave a lot of information
12 00:02:29,190 --> 00:02:41,430 in it was overkill. So this teaching is going to be rather brief, but it's again, very dense in its information. So again, looking at this diagram here, I
13 00:02:41,430 --> 00:02:52,320 want you to think about what would constitute these turning points. I'm sure if you were to go through charts, you could see patterns like this that are very
14 00:02:52,320 --> 00:03:02,670 similar and different timeframes. The timeframe that I teach, define this pattern on is the hourly chart. The reason why I like to look for on the hourly
15 00:03:02,670 --> 00:03:15,090 chart is because it gives me flexibility to drill down to a lower timeframe to refine risk to a smaller amount, while still keeping the maximum reward still in
16 00:03:15,090 --> 00:03:30,060 sight. And also, the hourly to me is clean enough in terms of a timeframe, it promotes a little bit longer term horizon for the setups. Now granted, an hourly
17 00:03:30,060 --> 00:03:39,300 chart is not long term. But you can see a lot of the levels you can see otherwise on a four hour or daily if you know what you're looking for. So I kind
18 00:03:39,300 --> 00:03:50,760 of like want to ingrain in your mind in this teaching how we can use key support resistance levels, and what makes these levels key. So the first thing you want
19 00:03:50,760 --> 00:04:00,450 to do is you want to take your 60 minute chart, and this can work on any asset class. Okay, so I'm gonna be using forex for this discussion, okay. And the
20 00:04:00,450 --> 00:04:12,930 scope is in demo trading only. But you can also do if you also do demo accounts with futures contracts, commodity stocks, bonds and the like. So you start with
21 00:04:12,930 --> 00:04:21,960 a 60 minute chart. Pretty simple, straightforward. You don't, you don't have to do a whole lot of top down analysis, because the pattern is self sufficient. So
22 00:04:21,960 --> 00:04:35,520 you've been looking for a 60 minute chart for a key high to form. And what makes it a key high is you want to see it create this initial short term high and then
23 00:04:35,520 --> 00:04:45,600 it runs through it. Then it breaks down. Okay, it's gonna break a swing low right here. When price trades through that, that's when it becomes a valid
24 00:04:45,600 --> 00:04:59,940 pattern. It does not become a valid pattern until we get below this swing low here. Okay? So imagine price action, kind of create a checkmark Okay. Give it
25 00:05:00,000 --> 00:05:12,120 little short, short term high here, and it makes a check like that. Okay? When that check mark gets surpassed by price action. When it trades back up to that,
26 00:05:12,210 --> 00:05:22,170 that's set up. Okay, that's what we're looking for. So ideally, what makes this setup stronger
27 00:05:22,380 --> 00:05:31,950 is if this whole price swing is part of a two stage move. In other words, we have a short term high, that's ran out. And we have a short term high here and
28 00:05:31,950 --> 00:05:41,520 it runs out. Okay, so this move should be ideally, the second move up, taking a short term high, that means we're pretty much overbought from a technical
29 00:05:41,520 --> 00:05:57,000 standpoint without the necessity of any indicators. So we're focusing again on this short term low here. And it has to break below that. Again, part of a two
30 00:05:57,000 --> 00:06:11,340 stage move higher MRP, waiting for price to retrace back to the swing low that forms prior to the key eye forming. Now, what makes this high key is the fact
31 00:06:11,340 --> 00:06:21,660 that we have taken out a short term high, but low immediately after that short term high is violated, it's broken down. So in essence, this is a break in
32 00:06:21,660 --> 00:06:31,110 market structure here. And all we're doing is waiting for a retest of that same old support level now becomes resistance. So now when we see this in proper
33 00:06:31,110 --> 00:06:43,860 context, we can classify and quantify real support resistance, because we're incorporating the idea of a stock run above this short term high. And then
34 00:06:43,860 --> 00:06:51,120 anyone that's long here, we're gonna have a stop below this low, so they run through those stops, price comes back up to this level here, we've already
35 00:06:51,120 --> 00:07:01,800 rejected price above this short term high above number two. So this level here should promote selling. And it should stave off any real buying, because we've
36 00:07:01,830 --> 00:07:13,140 broken market structure with this swing low with this drop down. So this would be nice area to look for shorts. And then once we have that we look for when
37 00:07:13,140 --> 00:07:24,570 this entry pattern, we have to frame obviously, profit and risk. So first have to determine what's our potential profit, what do we hope to make, so we look
38 00:07:24,570 --> 00:07:36,690 for a swing low, where in this case, it would be self stops resting below that short term low. And we would target from our entry point at this low down to
39 00:07:36,690 --> 00:07:46,200 that level, just below the old low, that's what we are aiming for. That's our target, if you will, the risk is going to be defined by one or two pips above
40 00:07:47,040 --> 00:08:00,210 the key high, okay, or the rejection high. Sometimes price can go above this short term low a little bit. It's better if it doesn't, but don't be afraid if
41 00:08:00,210 --> 00:08:08,460 it goes up by a little bit, your stop loss is up there to do its work. It's a demo account, don't lose any sleep over. Okay. So we're looking for the
42 00:08:08,460 --> 00:08:17,490 framework of this entry point to this as our objective and our stop loss protecting our overall position. Okay, so let's take a look of it in actual
43 00:08:17,490 --> 00:08:31,200 price action. Okay, we can see price creating a short term high here, price runs through it, you know, short term high here, price runs through that, and then it
44 00:08:31,200 --> 00:08:44,370 rejects being above this short term high and trades down below this low price comes back up and retail retreats to it. Okay, so this candle here violates it
45 00:08:44,370 --> 00:08:53,730 and then we come right back up to it and trades right into that same level. As soon as that happens, that is a sell scenario. Okay, or shorting opportunity,
46 00:08:54,390 --> 00:09:07,560 we're gonna be looking for a move below this low risk is defined by the high 65 pips risk to make from this entry point down to the stops. That's not bad, you
47 00:09:07,560 --> 00:09:20,730 can take that trade, it's not, you know, barn burning, okay. If we drop down into a 15 minute time frame, we can take that same insight in here and zero in
48 00:09:21,120 --> 00:09:31,050 and use our trusty optimal trade entry pattern to reduce some of the risk. So now we can reduce that 65 pips stop loss down to 20 pips. Notice also that we
49 00:09:31,050 --> 00:09:40,440 have a Fibonacci extension of 300%, which takes us right below that low where our sell stop target would be. Now we're going to look at an example of the
50 00:09:40,440 --> 00:09:53,700 bullish condition of an ATM. Again, look at the scenario here in this crude depiction. Gamma Ray scanning the price action on a 60 minute chart p low to
51 00:09:53,700 --> 00:10:03,030 form and a short term swing high broken to the upside. That's going to be this here. So we're looking for For a low, that's violated, and then we trade rate
52 00:10:03,030 --> 00:10:11,490 back above the short term high right here. So in other words, what we're looking for, it's kinda like a crooked little number seven. Okay. And when that is
53 00:10:11,520 --> 00:10:15,510 violated on the upside, when price comes back down to it, that's what we're hunting.
54 00:10:16,949 --> 00:10:25,679 So ideally, this is going to be part of a continued swing lower, we have a swing low, that's violated here, and then we have a swing low, that's violated here.
55 00:10:25,679 --> 00:10:34,469 So it's like a two stage move lower of breaking old support old support. Now, we're really oversold technically without any necessity of needing any
56 00:10:34,469 --> 00:10:47,309 indicators to tell us that. So here's how to scale drop down. And where we're waiting for price to retrace back to the swing high broken, prior to the key low
57 00:10:47,309 --> 00:10:56,549 forming again, that's this here, and we zero in right there. That's our setup for a long, so we'll look for our opportunity for training our potential reward.
58 00:10:57,029 --> 00:11:07,589 Again, we're gonna be hunting by stops above this swing high here. And the stop loss is below here. So our entry to our stop is our risk. And our entry to the
59 00:11:07,589 --> 00:11:21,269 buy stops about here is our potential profit or reward. Right with a look at an example in the bullish condition. So here is price action on an hourly chart,
60 00:11:21,449 --> 00:11:33,929 you can see we have one support level broken, another area of support broken, and then we have an old Whoa, violated aggressively, and then price trades back
61 00:11:33,929 --> 00:11:46,259 above it right here. When we see that this retest of that old high, that's where we're hunting along. So if that's our entry, and this is our stop loss, we're
62 00:11:46,259 --> 00:11:57,689 risking 140 pips, to make 225 pips by stops are our target here. Now that may not be an ideal scenario for you and may not be something that fits your risk
63 00:11:57,689 --> 00:12:09,029 appetite. So we can now drop down into a 15 minute timeframe and try to get that same 225 pips with a little bit lower stop loss. Here we are in a 15 minute time
64 00:12:09,029 --> 00:12:18,449 frame, I've zoomed in here and that same little area of looking to be a buyer, we're going to be now removing all that risk down to 80 pips, so we have a stop
65 00:12:18,449 --> 00:12:28,379 loss just below this old low here. Okay, so we have this low to this high here, coming back down to that level. So we're trying to give ourselves a little bit
66 00:12:28,379 --> 00:12:40,769 more of a better risk reward model here. Right away, we're almost at three to one that's improved. But watch what we do when we zoom in a little bit more,
67 00:12:40,799 --> 00:12:52,049 we're gonna actually get on to a five minute chart now. And still see if we can get that 225 pips but what a smaller stop loss. Okay, so now we have a five
68 00:12:52,049 --> 00:13:01,439 minute chart again, that same little area, that green circle resumed in here.  Now I'm doing this during an optimal trade entry long, running the third from
69 00:13:01,439 --> 00:13:09,839 the body's lowest open or close to the highest open or close and this swing high, gives us a beautiful little optimal trade entry long. Right at the same
70 00:13:09,839 --> 00:13:18,659 level, we would be looking for that scenario to unfold that. And now we can reduce that stop down to 20 pips, but still looking and hunting to earn 25 pips
71 00:13:18,659 --> 00:13:31,349 or in this case becomes 11 to one reward the risk model. So what we've done is we've looked for a key turning point. We've identified the key levels relative
72 00:13:31,349 --> 00:13:43,379 to runs on liquidity stops, and we use the targets in the form of a stock run as well. We can use the optimal trade entry zero in and reduce the risk but still
73 00:13:43,379 --> 00:13:55,679 keep the possible potential reward, still the same as we would have used from an hourly setup. So 225 pips is still available to us, but the 20 PIP stop loss.
74 00:13:56,669 --> 00:14:05,189 Now granted, you get the hold for a while, but this is what it looks like on a five minute zoomed out. And I'm getting that entire move, but it takes a little
75 00:14:05,189 --> 00:14:16,109 bit of time to get there. But nonetheless, this is how we can use the ATM method to get high probability setups, trading key support resistance levels. Again,
76 00:14:16,109 --> 00:14:28,439 225 pips is available. That's 20 pips stop loss. Hope you enjoyed this presentation. If you'd like these types of teachings, you can find more at B
77 00:14:28,439 --> 00:14:29,759 inner circle trader.com