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Version 1.1 by Drunk Monkey on 2020-11-20 16:49
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3 ICT: It's been my experience to observe that they are all
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7 too many times
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11 rushed
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15 to get into the action of entering trades with no real
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19 understanding of the current market environment,
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23 or what I refer to as a profile.
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27 Now market profiling is a concept that
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31 classifies what type of trading environment the current
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35 market
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39 is currently trading within.
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43 This swings the odds of success when you apply the proper
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47 technical analysis
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51 to the present profile.
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55 The market profiles that I personally use and
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59 approach my technical analysis with is considered four basic
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63 categories really the consolidation range profile, the
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67 breakout, which would be a valid and or false profile, the
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71 trending profile and the reversal profile.
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75 Now consolidation range profile
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79 really is something that I learned from
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83 Larry Williams and he talked about the nature of how price
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87 moves within trading range
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91 to a
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95 trade of some kind, like a breakout into a trend. Now, where
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99 do you go from range? expansion, range, expansion,
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103 consolidation again, okay. This phenomenon takes place in
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107 any timeframe. I don't care which one Look at it's always
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111 there. Now how you as a trader can make a considerable
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115 amount of money is based on using the higher time frames
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119 using this profile. You want to be looking for directional
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123 bias during this consolidation. There's going to be all
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127 kinds of tips and clues. Smart Money will leave for you to
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131 be able to participate in the swing that takes place going
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135 down. In this example typically when you see the market
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139 start trading like it does here going down. That's when the
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143 novice or st money gets excited and they start jumping in on
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147 the move. It doesn't mean you can't make money in that phase
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151 of the market. But it's just simply you have to be aware
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155 that you are in a move that's already been underway for a
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159 period of time. And if this is daily candles, and it could
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163 be a stalemate. Basically going into you know, basically no
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167 consolidation as we see here. Now during this consolidation
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171 traders will be trying their hardest to try to figure out
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175 what's going to happen. And we, if we can understand that if
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179 this is a bearish market environment, which is really what
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183 I'm trying to illustrate with this crude example
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187 we would be more inclined to look for
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191 shorts during the upper portion of
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195 the consolidation area. And
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199 also while we're in this consolidation, since we have a
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203 bearish market environment, okay. The range profiled we
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207 would use would be to look for optimal trade entry short
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211 patterns near the high end of the upper range of these, this
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215 consolidation or one would look for a turtle soup which
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219 would be a false breakout pattern, okay.
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223 So this is consolidation range profile
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227 is very handy in terms of determining what you should be
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231 doing overall. Even if it's in a trending market or non
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235 trending market, markets will always go back into some sort
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239 of consolidation. Even if it's in a strong trend. The
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243 breakout will more or less typically fall in line with the
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247 prevailing trade direction going into the consolidation. Now
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251 that's barring any reversal pattern or market profile that
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255 we'll talk about another module because it does have some
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259 characteristics that can't be explained, you know, in this
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263 module because we're gonna focus on
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267 everything but the reversal pattern reversal profile rather.
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271 Now,
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275 when markets go from consolidation to swing or trend, back
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279 into consolidation, during the consolidation, you want to be
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283 focusing on getting positioned with the next swing before it
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287 happens. You don't be chasing price once it starts to Break
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291 out, that's when, you know, we can be wrong. I mean, I hate
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295 to say left by but it could be a wrong decision. And the way
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299 we take our low risk, high probability traits are trading in
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303 the opposite direction of our anticipated price moves. In
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307 this environment, we would be looking for price to move
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311 lower. So we will be selling into any kind of rally during
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315 consolidation, maybe even reaching out to this old
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319 consolidation, low range, and maybe even looking at the high
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323 of the previous consolidation to the low of the
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327 consolidation that we're currently in. And then reaching up
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331 for an optimal trade entry to get in sync with the market
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335 trend or market flow and build a short position on market
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339 structure. You selling swing highs and getting ourselves in
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343 sync with the overall
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347 flow of the downward pressure that would
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351 eventually materialize. Now once price breaks out of that
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355 consolidation again, while price trades down, we would be
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359 seeing the bars expand, okay. But you've probably heard me
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363 refer to it as range expansion. This means basically that we
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367 went from usually on average or small range to larger
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371 or much
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375 bigger ranges. And that's where a lot of pips be made. As a
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379 professional trader, you want to be focusing on the time
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383 periods that present the quiet time, because that's when the
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387 consolidation is doing what accumulating the next move.
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391 There is no reason for you to be chasing the market. So a
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395 good procedure for you to adopt is whenever you see prices,
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399 start running this sit on your hands, don't do anything,
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403 don't chase it. Because that's exactly what the street
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407 money's doing. They're chasing and running out their price
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411 and you don't want to be doing that you should Could have
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415 already been in that move. And if you haven't been placed
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419 before the move in twos, you wait for the next one.
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423 Now, just as simple as it was to illustrate a bullish market
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427 environment and using consolidation range profile, when we
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431 have a trading range or consolidation, we want to be looking
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435 for the clues that indicate where price will move next, we
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439 do not chase it once it starts running. Once it breaks out,
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443 and starts moving higher and goes into another
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447 consolidation, we want to be using the low range or support
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451 level of the current consolidation, looking for optimal
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455 trade entry by signals pulling from the low of the previous
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459 consolidation up to the high in the present consolidation or
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463 looking for turtle soup. Bye patterns. In other words,
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467 looking for stops being rated on the low end, any kind of
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471 important swing low of some kind. If we see the market trade
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475 down to it and snap away that would confirm the indication
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479 that we would look for higher prices. And, again, just like
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483 the previous slide, we want to be looking for times when the
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487 candles or bars are small, they're not really large. And we
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491 want to be trading against the probable direction for the
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495 trade. We want to be trading in Alberta. If we're looking
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499 for bullish move, we want to be entering on down candles.
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503 Okay, when are we getting in the trade when it's moving
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507 against our anticipated trade direction.
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511 Now, how do you profile a market? Well, on the left hand
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515 side here, we have what would be considered a standard
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519 downtrending or downswing in the market until it reaches a
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523 low of some And you have a reversal formation. We're not
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527 going to cover the reversal here because there's a little
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531 bit more to it. But assuming that the market does reverse
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535 their trades up, okay? Then we'll have a retracement of some
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539 kind. Now the retracement can be in the form of a new
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543 consolidation or range. Okay. Or it could be an intermediate
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547 term reversal pattern. We don't know that until price gives
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551 us its clues. But based on higher time frame support
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555 resistance levels, we would have a reasonable expectation to
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559 see these swings unfold based on simple higher time frame
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563 analysis. No indicators just simply looking at the higher
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567 time frame support resistance levels. Now when price goes
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571 into a retracement and then starts consolidating, okay, we
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575 can see clearly that we've made a probable enemy or long
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579 term low price has snapped back and retraced Okay, so this
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583 could be positioning a longer term trend move higher. So we
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587 would be looking for buy signals, okay for swing trades or
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591 long trades, long position trades and only taking shorts
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595 over on the right hand side of this diagram. If we get to
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599 this
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603 profile in the market, we would only be looking for scalps
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607 or real short term intraday short positions and not looking
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611 to hold on to our long term intraday targets on the downside
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615 because it could be just a smaller retracement within a
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619 higher timeframe bullish move. So in this diagram, we've
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623 illustrated what would be considered a trending market down
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627 a reversal and a consolidation and a potential breakout
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631 profile that would be on the right hand side. Now, the right
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635 hand portion where it's ranging, this could be a pretty long
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639 period of time. It could be weeks while it stays within this
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643 range. It doesn't mean you can't make money, it just means
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647 that you need to be aware of where the key support
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651 resistance levels are, and keeping your trades limited to
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655 targets within that range and not chasing price up out of
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659 new territory. In other words, if it trades above this high
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663 here, look for turtle soup or optimal trade entry shorts.
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667 Because it could be very well, a long,
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671 not a long a short
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675 unfolding, once it breaks out falsely and sucks the traders
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679 in and you've seen plenty examples of that this year when my
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683 pro traders club videos. But within this consolidation, if
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687 we see optimal trade entry by signals obviously that would
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691 be the case here as an example, we could look for price to
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695 go up and we really have to be considering taking at least
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699 70% in my opinion. 70% of our profits off at the previous
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703 high noted here, because they don't know if it's going to
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707 stay within that range. If it does 30% remaining of the
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711 original position on the long, that would be a ideal
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715 candidate to hold on to in case we do get to break out.
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719 But
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723 I'm not a fan of chasing price into new territory, I think
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727 it's going to have a strong tendency to try at least
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731 pullback within the range. And you have to have that mindset
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735 as a trader because there are environments where you can
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739 make a lot of money while it stays within a range. And you
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743 can still make money in a trending reversal and
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747 consolidation or breakout profile. It just means you have to
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751 have the right tools and approach to trading with in that
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755 profile. So looking at a daily chart, weekly chart, monthly
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759 chart for our chart, you can get The general market tone
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763 where it's going higher or lower based on support
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767 resistance, fractal lows that we're taking out whereas
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771 market structure is bearish. You can even include the co2
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774 00:14:11,220 ~-~-> 00:14:15,090
775 data that we've learned in other videos, if commercials are
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777 195
778 00:14:15,300 ~-~-> 00:14:20,040
779 poised to expect a long term low in the market, and public
780
781 196
782 00:14:20,040 ~-~-> 00:14:25,890
783 traders are wildly bullish, okay. That could be a factor as
784
785 197
786 00:14:25,890 ~-~-> 00:14:30,270
787 well for your your profiling. But basically, you just want
788
789 198
790 00:14:30,270 ~-~-> 00:14:35,940
791 to have the understanding of what price could probably do in
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793 199
794 00:14:35,940 ~-~-> 00:14:42,690
795 the next coming sessions. Conversely, just like we discussed
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798 00:14:42,720 ~-~-> 00:14:47,730
799 a potential market profiling candidate we have a uptrending
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801 201
802 00:14:47,730 ~-~-> 00:14:53,640
803 market reaching a reversal and then a retracement into a
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805 202
806 00:14:53,640 ~-~-> 00:15:00,630
807 consolidation. Now that tie made here could be Long Term
808
809 203
810 00:15:00,630 ~-~-> 00:15:04,440
811 high or it could be mid term high, we don't know. But we
812
813 204
814 00:15:04,440 ~-~-> 00:15:08,490
815 have to base our trading on the key levels that are
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817 205
818 00:15:09,240 ~-~-> 00:15:12,720
819 presented to us on the higher time frames and noting where
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822 00:15:12,720 ~-~-> 00:15:13,470
823 they are
824
825 207
826 00:15:14,010 ~-~-> 00:15:15,720
827 and basing our trading on that
828
829 208
830 00:15:16,529 ~-~-> 00:15:20,729
831 we would only be looking for buy signals. In the right side
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833 209
834 00:15:20,729 ~-~-> 00:15:24,989
835 of the chart here is a crude diagram. Only for scalps and
836
837 210
838 00:15:24,989 ~-~-> 00:15:27,749
839 intraday short term targets. We would not look for our
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841 211
842 00:15:29,220 ~-~-> 00:15:32,040
843 extreme retracement levels, I'm
844
845 212
846 00:15:32,039 ~-~-> 00:15:34,589
847 sorry extension levels on our fibs for our targets. We would
848
849 213
850 00:15:34,589 ~-~-> 00:15:38,729
851 simply look for the previous highs to be retested and not
852
853 214
854 00:15:38,729 ~-~-> 00:15:42,029
855 much beyond that. Again, just like the other slide, I would
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857 215
858 00:15:42,029 ~-~-> 00:15:46,229
859 not be interested in buying brand new fresh highs I would
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861 216
862 00:15:46,229 ~-~-> 00:15:49,799
863 look for profit taking there and maybe even some shorts.
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865 217
866 00:15:51,480 ~-~-> 00:15:53,610
867 I believe this indicates a
868
869 218
870 00:15:53,730 ~-~-> 00:15:56,820
871 bearish tone in the marketplace if this was a daily and or
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873 219
874 00:15:56,820 ~-~-> 00:16:01,020
875 four hour chart and focusing more on that The short sells,
876
877 220
878 00:16:01,530 ~-~-> 00:16:03,150
879 then the buy signals.
880
881 221
882 00:16:09,179 ~-~-> 00:16:13,319
883 Now, where is your focus? Okay. When you prepare for trading
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885 222
886 00:16:13,319 ~-~-> 00:16:16,379
887 do you spend time with the higher time frames and determine
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889 223
890 00:16:16,409 ~-~-> 00:16:20,189
891 which profile the market is presently trading within. You do
892
893 224
894 00:16:20,189 ~-~-> 00:16:23,249
895 not want to trade simply just for the sake of taking some
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897 225
898 00:16:23,249 ~-~-> 00:16:26,489
899 action, but rather you want to be trading with the highest
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901 226
902 00:16:26,489 ~-~-> 00:16:30,269
903 probability in your favor. It makes sense. When the market
904
905 227
906 00:16:30,269 ~-~-> 00:16:34,529
907 is trending, we as traders use trend oriented analysis when
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909 228
910 00:16:34,529 ~-~-> 00:16:37,529
911 the market is in a reversal profile. This same trend
912
913 229
914 00:16:37,529 ~-~-> 00:16:41,879
915 oriented analysis would likely present lower odds. Keep the
916
917 230
918 00:16:41,879 ~-~-> 00:16:44,759
919 focus on the current environment and get your trading in
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921 231
922 00:16:44,759 ~-~-> 00:16:48,389
923 sync and you will find trading far more easier than trying
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925 232
926 00:16:48,389 ~-~-> 00:16:51,419
927 to force your treasured techniques into impossibilities.