2022 ICT Mentorship Episode 37

all right folks welcome back hope everyone's doing well so we are in episode 37 of the continuing series of the ict mentorship for youtube 2022. here's our daily chart for the e-mini s p june contract for 2020. and you can see we have worked inside this fair value got this is also a breaker okay breaker is a low high low or low find the high in between extending out in time the market trades down into that it's also coming down in to fill in this fair value gap so we came down fill that in and

now we're starting the rally next bicep liquidity is this short-term high here and then if we can get some acceleration from the upside we have relative equal highs up here and that fair value got okay so for the students here that are looking for a little bit more meat on the bone for bias okay when the market is moved from a low like this and starts to trade higher and creates a swing low it's easy to assume that it might want to come back up to this high here so notice how each day with the

exception there's one single day here each day was bullish okay so the bias would be expected to be bullish until we take out this high it does that here then we have a day or two of retracement which is logical because we created a fair value gap here it trades down fills it in once more tests it and rallies so we're looking for tomorrow which is friday non-farm payroll is a day i do not advise anyone to actually try to speculate on now there's going to be a group out there that have said i've made

money doing a non-profit payroll trades my reasoning for telling you not to trade is because you're here to learn how to read price action so if i say go out there and study non-farm payroll friday price action which can tend to be very volatile choppy or sometimes it becomes a dud it doesn't do anything but you don't have the experience to weather something that's very volatile and can be jarring to you okay and if you're out here trying to gamble with live money which is what none of you should be doing if you're in here

learning how to reprice that's why you're here to learn how to read price months from now if you come to the conclusion that you think you've done well enough on paper and then demo consistently if you decide to go into live trading you've done that on your own i've done nothing to instigate that or try to get you to do it okay so bias is going to be derived from this chart here because we're likely to run this short-term high that's what i'm thinking i'm expecting that it could happen overnight there's there's nothing saying it's

going to wait until tomorrow 8 30 when non-farm payroll comes out but if it doesn't run out this high tonight at 8 30 if we're above the fair value gap high here in other words the candle sticks low here if we're above that level at 8 30 and we have not taken out that high i would expect price to try to make an attempt to get to that level it doesn't need to go through it but the bias would be i would expect that to be attempted okay now does that mean go out and try

to trade not for a payroll tomorrow no a lot can happen from the time of this recording which is a little bit before nine o'clock eastern time in the united states so i'm not trying to trade not from payroll okay i'm not instigating any interest for you to go out and do it tomorrow but i do believe that you should study it try to determine what side of liquidity is going to reach for before 8 30 news release and when that volatility hits the marketplace watch and see what it does on like a one and

five minute chart get a feel for what it's doing and it's an amazing study for liquidity purposes only but unfortunately sometimes these moves can appear well to the untrained eye random and then to the initiated here sometimes the patterns that i'm teaching you in the logic materialize in the chart and sometimes they do pan out to script but not always so the reason why i tell everyone to avoid like big days like fomc and not from payroll weeks is because you don't have the experience and you can get hurt very quickly not knowing what you're

doing so i try to be responsible as a mentor try to protect you from yourself because like i was when i was younger it was very easy for me to fall into a trap or think i can do something i couldn't so that way you understand i try to teach my students to stop trading by the new york session on wednesday so if you had something that was profitable quote unquote up to that point stop trading for the rest of the week and then observe just study the price action the rest of the week but

don't try to push any buttons because you don't have any experience working in these sometimes very challenging market profiles on the thursday and friday of non-farm payroll weeks they can be choppy they can be sporadic they can come back against you when you really don't expect them to and they lose a lot of their precision not all the time but most of the time they lose their precision so i want to be focusing on those days where i don't have those disadvantages where everyone else is like well i got time to be in front of

the charts so it's gamble and it's casino time and that's not the way i do things and i'm trying to promote the idea of a super mindset about what it is you're dealing and respect the measure of risk so be mindful of these levels here the two blue lines here and that red line here it's a little bit lighter than these you won't see these on a lower time frame but this here is that short term high here and the two blue lines here are respective to that fair value gap on the daily chart [Music]

all right hourly chart e-mini s p market trades down to the discount low the fair value gap again these levels here are not drawn because of the basis of support resistance on an hourly chart okay these are the same levels that i drew on the daily and my change time frames from daily to hourly they transpose to these levels here respectively okay so the market trades down on wednesday hits the fair value gap low then we consolidate and then we drop one more time to it here then we make a debt mad dash to take

out the short term high here we have a shift in market structure that's bullish we take out this short term high here and relative equal highs and now we're gravitating towards what looks like a run on the buy side here now it does not need to do that tomorrow i could be wrong about that i'm just saying that i think that this is the next draw on liquidity so study that that's all now we do have a small little fair value gap in here be mindful that you might want to drop down into that before

going up there that's certainly something to study also all right on the 15 minute time frame you can see here this is the markup for the short-term high here on wednesday's trading we hit the fair value gap low on the daily chart went back hung around in consolidation rallied up and i was in here trying to get a feel for what it wanted to do i was thinking that i could capture a run to take the buy side out here that's what i was aiming for initially really early in the session and this got chopped

up a lot in here and it's fine i really don't care about that but once i realized it wasn't trying to rally and they we're going to try to take it once more below the new york midnight opening which is this candle here i want you to take a look at the way this day formed before i get into any more discussion about it we open here consolidated rallied up and then dropped down into the fairway gap low on the daily chart and bounced there rallied up took out the short term high here and kept

on rallying and enclosed here this formation of price action is what i dub my ict power 3 where it's accumulating manipulating distributing so it's opening create the low of the day and then rally now if you see this pattern on a daily chart it's easy to understand but when you look at the lower time frames it's easy to get lost in all the candlesticks and all the volatility and the movement and the quick fluctuations on these one minute and five minute charts that's why the uninitiated will look at and say it's noise it's it's not

noise okay it's doing what it does on the daily chart just being represented on a smaller interval like a one or five minute chart so if you lose the context of like for instance the levels here and here you won't understand that it's dropping down to the higher time frame key level which is the very very cap low then the market can rally higher but once i got on side i shorted from in here and covered inside this candle as we were dipping below the short-term low i forced myself to engage not because i'm breaking

rules not because i'm undisciplined but because i want to teach you why i avoid these days because my precision drops precipitously i don't have the the visibility on these particular days that i do have on others so if you have a built-in advantage why would you go to an area or arena where you have built-in disadvantages if you have advantages by trading on the days that don't create these types of conditions you trade in those arenas and then that time frame and you avoid the times where historically your proven walk forward real trading results have

been diminished on these particular days so how many times you have to have your flesh torn open and bleed out before you realize this is probably a time of the month where i shouldn't be doing anything or lower my expectations in terms of the measure of precision so over 30 years that's what i've come to trust especially as a mentor teaching other people how to read price action i really press upon my students to stop trading on wednesday by the new york session so if you haven't bagged anything by that time from sunday's weekly open

until until wednesday's new york session begins don't do any trades and deal with that desire of wanting to trade but don't do anything that forges discipline it forges patience and it also teaches you especially when the weeks are really bad and it doesn't give you a whole lot of movement you're going to be rewarded psychologically and emotionally because you didn't do anything but on twitter i've coached those individuals there too and i said don't take any trades don't do it and today they did and they regretted it so some people decide to listen to me

after the pain but my whole point in doing these types of lessons in lectures is to try to spare you from all that you don't have to go through the same things i did painfully to learn the lessons so listen okay it's for your benefit so anyway i went short in here and i shared that on a vignette little tiny little video clip where you can see the uh the business and the executions and such but the the afternoon that's set up i want to go into that a little bit and i didn't buy anything

down here i didn't do any of that turn here i was actually shopping for some things that i need for the summer so it took my attention away from being down here but once i got back to the screens and i saw the market dropping down into this area here i tweeted and i asked everyone on twitter if they could find the five minute fair value at the above price and i gave them a minute or two and i shared a chart in case they were confused as to what it was being discussed so my

expectation was we're here and we were likely to drop into that in the pm session so in other words as we going into lunch and on the other side of the lunch we could have easily traded up into this area as an upside objective and then i didn't mention it but you obviously know if we get above that movie the next logical draw on liquidity it'll be about this high here okay so on twitter if you want to go over to twitter you can see this is my handle a lot of you guys keep asking

i've already mentioned it on several videos now but it's the at symbol capital i underscore one time am underscore t h e underscore ict i am the inner circle trader or i am the ict so you don't have to follow me on twitter i'm not looking for a lot of follow since i'm not trying to get everybody to follow me in fact you can just go to twitter.combackslash and put this here in without the at symbol and you can look at my tweets they're not protected so that way you don't have to join that platform

okay so i know there's a lot of people that simply will not join because all the politics is associated with it i get it but we're over there having fun and hopefully you know you guys can check it out and join the fun if not then that's cool but it's a little bit more time friendly and easier to be alerted unlike the community tab on my youtube channel i'm not really sure why sometimes people don't get notifications and sometimes they do i don't know so when you guys contact me or send me messages through tradingview

or whatever asking me there's things i don't know okay i just put videos up or posts and if you get them you get them if you don't you have to go to the actual community post and see it but twitter obviously has always been my playground i've enjoyed it in the past and you can see here the time 11 37 a.m this is local time eastern time and june 2nd i asked everyone on e-mini s p five-minute chart locate the fair value up above market price that's this one here okay so i gave a little

bit of time for folks to look for it themselves and then i gave this here okay so the market was trading right there and draw on look what it was here okay so obviously you can see here we did shortly after that it was bagged and tagged was it was trading up into that level there so the question is going to be what's the purpose of that you know what's the whole reason for me bringing it up you know that's not a trade ict that's not a a button being pushed that's not a an entry

a stop and a target right i'm teaching you by being your spotter sometimes i'll see things and i'll say look at this or study that for clarity folks that is not a trade signal i'm not telling you to buy or sell anything i am trying to inspire you to look at price with the things i'm teaching you real time at that moment before it actually develops and delivers in price before your charts actually show it i'm taking your attention to the right side of the marketplace i'm pointing to a level i want you to study

where we are at that time at market price which is in this example here and then study how it gets to that level i'm sometimes going to be wrong folks okay admittedly i'm i'm gonna do it wrong okay but i want you to study from when i say take notice of something and study and see if it wants to deliver that by a specific time okay i've noticed since um i'll comment on something on twitter it's almost like it immediately runs to it so that's also an interesting thing for me i'm not sure what to

make of that but i know once i say something it's really quick to be johnny on the spot and get to where i'm pointing to so i'll leave that up for you to decide if it's anything noteworthy behind that all right so this is a two-minute chart and before i even get into this this is not a trade entry and this is not a trade exit okay if you look at the shape of these arrows okay i'm not trying to defraud you i'm not trying to fake something i'm not trying to pretend that i took

this trade okay i did not do it i'm just showing you graphically this is how you would have your chart so if you want to journal things after the fact what you want to do is you have your chart set up like this and you have an order block the down closed candle prior to this move up here and then we drop after consolidation into the fairway gap right there right here is where i tweeted look at this very valuable so price was here that was the moment of the tweet and then up to here

it delivers so the pattern is this okay so when you have that you go back into your charts you mark it up like this and then over here you want to put down any observations how long did it take before this move started to be delivered to the upside after it went into the fair bay gap well this each one of these candles is two minutes right so it went into it here here said it's four minutes and then six minutes and then starts delivering six minutes after hitting it and then it took one two

three four five six seven eight nine roughly 20 minutes to deliver that expectation and price so it went from a discount how's this discount we moved from the low to here think about what's being shown we are above the new york men like opening price so the market dropped down to a discount creating the low of the day now we above this opening price and we're going into lunch here is the new york session lunch hour so we have time before 12 o'clock for this to potentially deliver but i was giving it time see if

it wants to go there in the pm session which will be on the other side of lunch around one o'clock to 1 30 and then start to deliver that but like i was mentioning moments ago lately when i post or talk about anything it's like it wants to get there right away so again make of it what you want but after you have your annotations on your chart you want to basically put down any observation that you notice but you want to phrase it in such a way like you saw this in advance so what

happens is you're tricking your subconscious into believing that this is a experience that you really had and it's like self it's called self talk okay you're reassuring and reinforcing something that would be a positive thing for you and while you may not have seen that trade and you didn't have the experience that i was showing on twitter today before it happened you borrow that experience for the study but in your journaling your chart would look like this okay and then you would fill in these little areas where it where it would draw on your observations

the things that you saw come to fruition and never try to put anything negative in it don't say i wish i would have saw this or i was foolish and i didn't see this unfold and i missed another trade or i'm never going to get this this is frustrating these journal entries are for you to reflect upon at a later time and you want them to be positive you want to basically cheerlead yourself in your journaling and keep things very fact oriented everything is a matter of fact and you want to phrase it like you

saw it beforehand and over time how much time i don't know but when you do this for weeks and months maybe half a year or so certainly by the first year of doing it you will have tricked your brain into having all of this pseudo experience the benefit of this because you're logging the chart and making it look like this and retaining and then referring back to them each weekend looking at the previous week looking at the previous month and just scrolling through your charts and reading your annotations yes it's laborious yes it takes time

yes it is boring in the beginning but when you start learning to see these things form live then you'll understand the benefit of having done it because this is how you get it nothing else gives it to you watching my videos will not do it for you you have to be in here doing this part if you fail under my tutelage it's because you don't do this okay this is where everybody that fails starts their tailspin into failure they don't want to do this stuff they're like i ain't doing that i ain't got time for

that well then you don't want to succeed because i'm telling you there's no shortcut around it you will do this or you will fail period and the story have a nice day now notice what we have here we have a short term low here during the new york lunch hour we're consolidating the market drops back down and takes out that short term low we have unfinished business about that old high here this is a stop run here and it just slowly drifts up and takes that old high out the only setup i liked was obviously

the short and the re-entry in addition to the short i did and you can see that on the vignette that i posted on twitter so i'm not going to bog the video down here with that it's already made public the afternoon session or after the low was formed notice there's no model entry for what i've taught you so far but we have a nice fair value gap with the continuation of the upside with a fair value gap i was pointing out real time before it happened so this would be the only other setup which i

did not take it's i didn't trade this in a demo account i didn't demo trade it but i did give you the logic to look for real time in twitter before it unfolded so this is the framework that you would have in your journal and everything i mentioned in this lecture tonight hopefully was insightful to you and helpful and i will touch base with you again next tuesday lord willing until i'll talk to you next time be safe