ICT - Trading Plan Development 2.srt

Last modified by Drunk Monkey on 2021-06-11 13:56
1 00:00:04,620 --> 00:00:05,520 ICT: progress in the valley
2 00:00:05,519 --> 00:00:07,469 Trust Bank bridge,
3 00:00:07,500 --> 00:00:08,460 we have shots fired.
4 00:01:26,940 --> 00:01:38,430 It's been my experience to observe that they are all too many times rushed to get into the action of entering trades with no real understanding of the current
5 00:01:38,430 --> 00:01:48,180 market environment, or what I refer to as a profile. Now, market profiling is a concept that classifies what type of trading environment the current market is
6 00:01:48,180 --> 00:01:56,010 currently trading within this swings the odds of success, when you apply the proper technical analysis to the present profile.
7 00:02:01,920 --> 00:02:13,740 The market profiles that I personally use and approach my technical analysis with is considered four basic categories really, the consolidation range
8 00:02:13,740 --> 00:02:33,420 profile, the breakout, which would be a valid and or false profile, the trending profile and the reversal profile. Now consolidation range profile really is
9 00:02:33,420 --> 00:02:47,100 something that I learned from Larry Williams. And he talked about the nature of how price moves within trading range to a trade of some kind, like a, like a
10 00:02:47,100 --> 00:02:58,590 breakout into a trend. Now, where do you go from range? expansion, range, expansion, consolidation again, okay, this phenomenon takes place in any
11 00:02:58,590 --> 00:03:09,300 timeframe, I don't care which one you look at, it's always there. Now, how you as a trader can make a considerable amount of money is based on using higher
12 00:03:09,300 --> 00:03:21,180 timeframes using this profile. You want to be looking for directional bias during this consolidation. There, there's going to be all kinds of tips and
13 00:03:21,180 --> 00:03:34,740 clues to smart money will leave for you to be able to participate in the swing that takes place going down in this example. Typically, when you see the market
14 00:03:34,740 --> 00:03:45,480 start trading like it does hear going down, that's when the novice or st money gets excited and they start jumping in on the move. It doesn't mean you can't
15 00:03:45,480 --> 00:03:55,560 make money in that phase of the market. But it's just simply you have to be aware that you are in a move that's already been underway for a period of time.
16 00:03:56,400 --> 00:04:06,570 And if this is daily candles, it could be a stale move basically going into basically no consolidation as we see here. Now during this consolidation,
17 00:04:06,570 --> 00:04:16,890 traders will be trying their hardest to try to figure out what's going to happen. And we if we can understand fsos a bearish market environment which is
18 00:04:16,890 --> 00:04:28,170 really what I'm trying to illustrate with this crude example. We would be more inclined to look for shorts during the upper portion of the consolidation area.
19 00:04:28,860 --> 00:04:41,400 And also while we're in this consolidation, since we have a bearish market environment, okay. The range profiled we would use would be to look for optimal
20 00:04:41,400 --> 00:04:52,830 trade entry short patterns near the high end of the upper range of these, this consolidation or one went look for a turtle suit which would be a false breakout
21 00:04:52,830 --> 00:05:05,940 pattern okay. So this is consolidation range profile is very handy in terms of determining what you should be doing overall, even if it's in a trending market
22 00:05:05,940 --> 00:05:14,970 or non trending market, markets will always go back into some sort of consolidation. Even if it's in a strong trend, the breakout will more or less
23 00:05:15,540 --> 00:05:25,860 typically fall in line with the prevailing trade direction going into the consolidation. And now that barring any reversal pattern, or market profile,
24 00:05:25,860 --> 00:05:35,040 that we'll talk about another module, because it does have some characteristics that can't be explained, you know, in this module, because we're gonna focus on
25 00:05:37,620 --> 00:05:51,510 everything but the reversal pattern reversal profile rather. Now, when markets go from consolidation to swing or trend, back into consolidation, during the
26 00:05:51,510 --> 00:06:00,750 consolidation, you want to be focusing on getting positioned with the next swing before it happens, you don't really chasing price, once it starts to break out,
27 00:06:01,230 --> 00:06:13,230 that's when, you know, we can be wrong. I mean, I hate to say left by but, you know, it could be a wrong decision. And the way we take our low risk, high
28 00:06:13,230 --> 00:06:24,030 probability trades are trading in the opposite direction of our anticipated price move in this environment, we would be looking for price to move lower. So
29 00:06:24,030 --> 00:06:36,060 we will be selling into any kind of rally during the consolidation, maybe even reaching up to this old consolidation, low range, and maybe even looking at the
30 00:06:36,060 --> 00:06:44,610 high of the previous consolidation to the low of the consolidation that we're currently in. And then reaching up for an optimal trade entry to get in sync
31 00:06:44,610 --> 00:06:56,640 with the market trend or market flow and build a short position on market structure, new selling swing highs and getting ourselves in sync with the
32 00:06:56,670 --> 00:06:57,360 overall
33 00:06:58,890 --> 00:07:10,440 flow of the downward pressure that would eventually materialize. Now once price breaks out of that consolidation again, while price trades down, we would be
34 00:07:10,440 --> 00:07:20,940 seeing the bars expand again, what you probably heard me refer to it as range expansion. This means basically that we went from usually on average or small
35 00:07:20,940 --> 00:07:34,500 range to larger or much bigger ranges. And that's where a lot of pips be made. As a professional trader, you want to be focusing on the time periods that
36 00:07:35,100 --> 00:07:44,640 present the quiet time, because that's when the consolidation is doing what accumulating the next move, there is no reason for you to be chasing the market.
37 00:07:44,640 --> 00:07:54,210 So a good procedure for you to adopt is whenever you see prices, start running this sit on your hands, don't do anything, don't chase it. Because that's
38 00:07:54,240 --> 00:08:01,560 exactly what the street money is doing. They're chasing and running after price. And you don't want to be doing that you should have already been in that move.
39 00:08:02,190 --> 00:08:06,870 And if you haven't been placed before the move ensues, you wait for the next one.
40 00:08:17,700 --> 00:08:28,620 Now, just as simple as it was to illustrate a bullish market environment and using consolidation range profile, when we have a trading range or
41 00:08:28,620 --> 00:08:39,720 consolidation, we want to be looking for the clues that indicate where price will move next, we do not chase it once it starts running. Once it breaks out,
42 00:08:39,930 --> 00:08:49,740 and starts moving higher and goes into another consolidation, we want to be using the low range or support level of the current consolidation, looking for
43 00:08:49,740 --> 00:08:59,340 optimal trade entry by signals pulling from the low of the previous consolidation up to the high in the present consolidation or looking for turtle
44 00:08:59,340 --> 00:09:10,140 soup by patterns. In other words, looking for stops being rated on the low in any kind of important swing low of some kind. If we see the market trade down to
45 00:09:10,320 --> 00:09:20,490 and snap away, that will confirm the indication that we would look for higher prices. And again, just like the previous slide, we want to be looking for times
46 00:09:20,490 --> 00:09:31,860 when the candles or bars are small. They're not really large. And we want to be trading against the probable direction for the trade. We want to be trading. In
47 00:09:32,160 --> 00:09:40,650 other words, if we're looking for a bullish move, we want to be entering on down candles okay when when we getting in the trade when it's moving against our
48 00:09:40,650 --> 00:09:42,000 anticipated trade direction.
49 00:09:47,940 --> 00:09:58,920 Now, how do you profile a market? Well, on the left hand side here, we have what would be considered a standard downtrending or downswing in the market until it
50 00:09:58,920 --> 00:10:07,230 reaches a low of some kind and you have a reversal formation. We're not going to cover the reversal here because it's a little bit more to it. But assuming that
51 00:10:07,230 --> 00:10:16,380 the market does reverse their trades up, okay? And then we'll have a retracement of some kind. Now the retracement can be in the form of a new consolidation or
52 00:10:16,380 --> 00:10:27,930 range. Okay. Work could be an intermediate term reversal pattern. We don't know that until price gives us its clues. But based on higher time frame support
53 00:10:27,930 --> 00:10:38,250 resistance levels, we would have a reasonable expectation to see these swings unfold based on simple higher time frame analysis. No indicators just simply
54 00:10:38,250 --> 00:10:48,300 looking at the higher time frame support resistance levels. Now when price goes into a retracement and it starts consolidating, okay, we can see clearly that
55 00:10:48,480 --> 00:11:02,640 we've made a probable enemy or long term low price has snapped back and retraced okay. So this could be positioning a longer term trend move higher. So we would
56 00:11:02,640 --> 00:11:15,030 be looking for buy signals, okay for swing trades or long trades, long position trades. And only taking shorts over on the right hand side of this diagram. If
57 00:11:15,030 --> 00:11:26,040 we get to this profile in the market, we would only be looking for scalps or real short term intraday short positions and not looking to hold on to our long
58 00:11:26,040 --> 00:11:38,730 term intraday targets on the downside because it could be just a smaller retracement within a higher timeframe bullish move. So in this diagram, we've
59 00:11:38,730 --> 00:11:52,320 illustrated what would be considered a trending market down a reversal and a consolidation and a potential breakout profile that would be on the right hand
60 00:11:52,320 --> 00:12:03,480 side. Now, the right hand portion where it's ranging, this could be a pretty long period of time, it could be weeks, while it stays within this range. It
61 00:12:03,480 --> 00:12:12,840 doesn't mean you can't make money, it just means that you need to be aware of where the key support resistance levels are, and keeping your trades limited to
62 00:12:13,860 --> 00:12:24,180 targets within that range and not chasing price up out of new territory. In other words, if it trades above this high here, look for turtle soup or optimal
63 00:12:24,180 --> 00:12:36,030 trade entry shorts. Because it could be very well, a long, not a long but a short unfolding, once it breaks out forcely and sucks the traders in. And you've
64 00:12:36,030 --> 00:12:47,880 seen plenty examples of that this year when my pro traders club videos. But within this consolidation, if we see optimal trade entry, by signals, obviously,
65 00:12:47,940 --> 00:13:00,780 that would be the case here as an example, we could look for price to go up. And we really have to be considering taking at least 70%. In my opinion, 70% of our
66 00:13:00,780 --> 00:13:10,020 profits offered to previous high noted here, because they don't know if it's going to stay within that range. If it does 30% remaining of the original
67 00:13:10,020 --> 00:13:22,680 position long. That would be a ideal candidate to hold on to in case we do get to break out. But you know, I'm not a fan of chasing price into new territory, I
68 00:13:22,680 --> 00:13:32,370 think it's going to have a strong tendency to try at least pullback within the range. And you have to have that mindset as a trader because there are
69 00:13:32,400 --> 00:13:46,350 environments where you can make a lot of money well, it stays within a range. And you can still make money in a trending reversal and consolidation or
70 00:13:46,350 --> 00:13:57,270 breakout profile, it just means you have to have the right tools and approach to trading with in that profile. So looking at the daily chart, weekly chart
71 00:13:57,300 --> 00:14:05,820 monthly chart for our chart, you can get the general market term where it's going higher or lower based on support resistance, fractal lows that were taken
72 00:14:05,820 --> 00:14:18,060 out, whereas market structure is bearish. You can even include the CO t data that we've learned in other videos, if commercials are poised to expect a long
73 00:14:18,060 --> 00:14:30,750 term loan to market and public traders are wildly bullish. Okay. They that could be a factor as well for your your profiling. But basically you just want to have
74 00:14:31,170 --> 00:14:46,680 the understanding of what price could probably do in the next coming sessions. Conversely, just like we discussed a potential market profiling candidate we
75 00:14:46,680 --> 00:14:48,150 have a uptrending market
76 00:14:49,530 --> 00:15:03,360 reaching a reversal and then a retracement into a consolidation. Now that high made here could be A long term high or could be a mid term high, we don't know.
77 00:15:03,930 --> 00:15:15,720 But we have to base our trading on the key levels that are presented to us on the higher timeframes. And noting where they are and basing our trading on that
78 00:15:16,530 --> 00:15:26,940 we would only be looking for buy signals. In the right side of the chart here is a crude diagram only for scalps and intraday short term targets. We would not
79 00:15:26,940 --> 00:15:38,400 look for our extreme retracement levels, I'm sorry extension levels on our fibs for our targets. We would simply look for the previous highs to be retested and
80 00:15:38,460 --> 00:15:47,970 not much beyond that. Again, just like the other slide, I would not be interested in buying brand new fresh highs I would look for profit taking there
81 00:15:48,450 --> 00:16:00,150 and maybe even some shorts. I believe this indicates a bearish tone in the marketplace if this was a daily and or four hour chart and focusing more on the
82 00:16:00,150 --> 00:16:03,120 short sells, then the buy signals.
83 00:16:09,180 --> 00:16:18,240 Now where is your focus, okay. When you prepare for trading do you spend time with the higher timeframes and determine which profile the market is presently
84 00:16:18,240 --> 00:16:27,450 trading within. You do not want to trade simply just for the sake of taking some action, but rather you want to be trading with the highest probability in your
85 00:16:27,450 --> 00:16:37,530 favor. It makes sense. When the market is trending. We as traders use trend oriented analysis when the market is in a reversal profile. This same trend
86 00:16:37,560 --> 00:16:47,550 oriented analysis would likely present lower odds. Keep the focus on the current environment and get your trading in sync and you will find trading far more
87 00:16:47,550 --> 00:16:51,420 easier than trying to force your treasured techniques into impossibilities.