ICT - Trading Plan Development 2.srt

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ICT: It's been my experience to observe that they are all

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too many times

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rushed

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to get into the action of entering trades with no real

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understanding of the current market environment,

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or what I refer to as a profile.

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Now market profiling is a concept that

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classifies what type of trading environment the current

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market

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is currently trading within.

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This swings the odds of success when you apply the proper

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technical analysis

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to the present profile.

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The market profiles that I personally use and

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approach my technical analysis with is considered four basic

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categories really the consolidation range profile, the

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breakout, which would be a valid and or false profile, the

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trending profile and the reversal profile.

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Now consolidation range profile

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really is something that I learned from

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Larry Williams and he talked about the nature of how price

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moves within trading range

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to a

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trade of some kind, like a breakout into a trend. Now, where

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do you go from range? expansion, range, expansion,

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consolidation again, okay. This phenomenon takes place in

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any timeframe. I don't care which one Look at it's always

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there. Now how you as a trader can make a considerable

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amount of money is based on using the higher time frames

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using this profile. You want to be looking for directional

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bias during this consolidation. There's going to be all

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kinds of tips and clues. Smart Money will leave for you to

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be able to participate in the swing that takes place going

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down. In this example typically when you see the market

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start trading like it does here going down. That's when the

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novice or st money gets excited and they start jumping in on

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the move. It doesn't mean you can't make money in that phase

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of the market. But it's just simply you have to be aware

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that you are in a move that's already been underway for a

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period of time. And if this is daily candles, and it could

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be a stalemate. Basically going into you know, basically no

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consolidation as we see here. Now during this consolidation

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traders will be trying their hardest to try to figure out

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what's going to happen. And we, if we can understand that if

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this is a bearish market environment, which is really what

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I'm trying to illustrate with this crude example

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we would be more inclined to look for

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shorts during the upper portion of

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the consolidation area. And

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also while we're in this consolidation, since we have a

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bearish market environment, okay. The range profiled we

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would use would be to look for optimal trade entry short

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patterns near the high end of the upper range of these, this

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consolidation or one would look for a turtle soup which

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would be a false breakout pattern, okay.

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So this is consolidation range profile

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is very handy in terms of determining what you should be

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doing overall. Even if it's in a trending market or non

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trending market, markets will always go back into some sort

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of consolidation. Even if it's in a strong trend. The

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breakout will more or less typically fall in line with the

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prevailing trade direction going into the consolidation. Now

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that's barring any reversal pattern or market profile that

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we'll talk about another module because it does have some

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characteristics that can't be explained, you know, in this

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module because we're gonna focus on

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everything but the reversal pattern reversal profile rather.

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Now,

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when markets go from consolidation to swing or trend, back

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into consolidation, during the consolidation, you want to be

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focusing on getting positioned with the next swing before it

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happens. You don't be chasing price once it starts to Break

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out, that's when, you know, we can be wrong. I mean, I hate

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to say left by but it could be a wrong decision. And the way

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we take our low risk, high probability traits are trading in

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the opposite direction of our anticipated price moves. In

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this environment, we would be looking for price to move

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lower. So we will be selling into any kind of rally during

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consolidation, maybe even reaching out to this old

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consolidation, low range, and maybe even looking at the high

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of the previous consolidation to the low of the

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consolidation that we're currently in. And then reaching up

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for an optimal trade entry to get in sync with the market

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trend or market flow and build a short position on market

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structure. You selling swing highs and getting ourselves in

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sync with the overall

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flow of the downward pressure that would

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eventually materialize. Now once price breaks out of that

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consolidation again, while price trades down, we would be

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seeing the bars expand, okay. But you've probably heard me

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refer to it as range expansion. This means basically that we

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went from usually on average or small range to larger

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or much

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bigger ranges. And that's where a lot of pips be made. As a

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professional trader, you want to be focusing on the time

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periods that present the quiet time, because that's when the

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consolidation is doing what accumulating the next move.

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There is no reason for you to be chasing the market. So a

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good procedure for you to adopt is whenever you see prices,

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start running this sit on your hands, don't do anything,

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don't chase it. Because that's exactly what the street

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money's doing. They're chasing and running out their price

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and you don't want to be doing that you should Could have

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already been in that move. And if you haven't been placed

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before the move in twos, you wait for the next one.

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Now, just as simple as it was to illustrate a bullish market

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environment and using consolidation range profile, when we

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have a trading range or consolidation, we want to be looking

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for the clues that indicate where price will move next, we

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do not chase it once it starts running. Once it breaks out,

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and starts moving higher and goes into another

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consolidation, we want to be using the low range or support

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level of the current consolidation, looking for optimal

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trade entry by signals pulling from the low of the previous

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consolidation up to the high in the present consolidation or

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looking for turtle soup. Bye patterns. In other words,

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looking for stops being rated on the low end, any kind of

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important swing low of some kind. If we see the market trade

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down to it and snap away that would confirm the indication

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that we would look for higher prices. And, again, just like

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the previous slide, we want to be looking for times when the

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candles or bars are small, they're not really large. And we

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want to be trading against the probable direction for the

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trade. We want to be trading in Alberta. If we're looking

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for bullish move, we want to be entering on down candles.

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Okay, when are we getting in the trade when it's moving

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against our anticipated trade direction.

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Now, how do you profile a market? Well, on the left hand

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side here, we have what would be considered a standard

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downtrending or downswing in the market until it reaches a

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low of some And you have a reversal formation. We're not

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going to cover the reversal here because there's a little

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bit more to it. But assuming that the market does reverse

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their trades up, okay? Then we'll have a retracement of some

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kind. Now the retracement can be in the form of a new

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consolidation or range. Okay. Or it could be an intermediate

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term reversal pattern. We don't know that until price gives

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us its clues. But based on higher time frame support

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resistance levels, we would have a reasonable expectation to

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see these swings unfold based on simple higher time frame

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analysis. No indicators just simply looking at the higher

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time frame support resistance levels. Now when price goes

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into a retracement and then starts consolidating, okay, we

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can see clearly that we've made a probable enemy or long

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term low price has snapped back and retraced Okay, so this

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could be positioning a longer term trend move higher. So we

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would be looking for buy signals, okay for swing trades or

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long trades, long position trades and only taking shorts

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over on the right hand side of this diagram. If we get to

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this

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profile in the market, we would only be looking for scalps

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or real short term intraday short positions and not looking

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to hold on to our long term intraday targets on the downside

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because it could be just a smaller retracement within a

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higher timeframe bullish move. So in this diagram, we've

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illustrated what would be considered a trending market down

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a reversal and a consolidation and a potential breakout

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profile that would be on the right hand side. Now, the right

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hand portion where it's ranging, this could be a pretty long

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period of time. It could be weeks while it stays within this

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range. It doesn't mean you can't make money, it just means

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that you need to be aware of where the key support

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resistance levels are, and keeping your trades limited to

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targets within that range and not chasing price up out of

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new territory. In other words, if it trades above this high

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here, look for turtle soup or optimal trade entry shorts.

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Because it could be very well, a long,

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not a long a short

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unfolding, once it breaks out falsely and sucks the traders

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in and you've seen plenty examples of that this year when my

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pro traders club videos. But within this consolidation, if

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we see optimal trade entry by signals obviously that would

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be the case here as an example, we could look for price to

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go up and we really have to be considering taking at least

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70% in my opinion. 70% of our profits off at the previous

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high noted here, because they don't know if it's going to

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stay within that range. If it does 30% remaining of the

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original position on the long, that would be a ideal

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candidate to hold on to in case we do get to break out.

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But

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I'm not a fan of chasing price into new territory, I think

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it's going to have a strong tendency to try at least

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pullback within the range. And you have to have that mindset

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as a trader because there are environments where you can

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make a lot of money while it stays within a range. And you

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can still make money in a trending reversal and

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consolidation or breakout profile. It just means you have to

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have the right tools and approach to trading with in that

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profile. So looking at a daily chart, weekly chart, monthly

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chart for our chart, you can get The general market tone

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where it's going higher or lower based on support

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resistance, fractal lows that we're taking out whereas

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market structure is bearish. You can even include the co2

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data that we've learned in other videos, if commercials are

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poised to expect a long term low in the market, and public

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traders are wildly bullish, okay. That could be a factor as

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well for your your profiling. But basically, you just want

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to have the understanding of what price could probably do in

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the next coming sessions. Conversely, just like we discussed

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a potential market profiling candidate we have a uptrending

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market reaching a reversal and then a retracement into a

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consolidation. Now that tie made here could be Long Term

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high or it could be mid term high, we don't know. But we

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have to base our trading on the key levels that are

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presented to us on the higher time frames and noting where

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they are

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and basing our trading on that

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we would only be looking for buy signals. In the right side

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of the chart here is a crude diagram. Only for scalps and

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intraday short term targets. We would not look for our

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extreme retracement levels, I'm

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sorry extension levels on our fibs for our targets. We would

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simply look for the previous highs to be retested and not

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much beyond that. Again, just like the other slide, I would

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not be interested in buying brand new fresh highs I would

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look for profit taking there and maybe even some shorts.

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I believe this indicates a

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bearish tone in the marketplace if this was a daily and or

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four hour chart and focusing more on that The short sells,

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then the buy signals.

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Now, where is your focus? Okay. When you prepare for trading

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do you spend time with the higher time frames and determine

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which profile the market is presently trading within. You do

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not want to trade simply just for the sake of taking some

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action, but rather you want to be trading with the highest

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probability in your favor. It makes sense. When the market

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is trending, we as traders use trend oriented analysis when

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the market is in a reversal profile. This same trend

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oriented analysis would likely present lower odds. Keep the

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focus on the current environment and get your trading in

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sync and you will find trading far more easier than trying

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to force your treasured techniques into impossibilities.