2022 ICT Mentorship Episode 11

all right folks welcome back a little bit earlier broadcast today has some plans this evening so i want to get it out of the way all right so we're looking at obviously a hindsight view of something i pointed to before it happened so that way you guys got a chance to see what it was like for my private mentorship group when i say these things it's almost like an invitation for some of you to email me to ask to join out you can't join it okay i'm teaching mentorship on youtube okay so that way you

don't need to reach out to me okay it's i'm teaching right here and you didn't have to send me any credit card information you'd have to set up any kind of paypal account there's nothing to worry about you either watch it and enjoy it and get something from it or you never come back and watch anymore okay it's very simple but i'm getting a lot of feedback from the comments and it's been very positive so thank you for that it's very encouraging all right so we're looking at the e-mini nasdaq futures contract for the march

delivery if you remember i was outlining this imbalance in here okay and i gave you the high of this candle below that candle which it should be sitting right on that so with this imbalance we traded down to a discount back up to a premium again measure the high to the low and i'll do that for you now because i know somebody like can you just do it for me all right so here's 50 that's equilibrium inside this dealing range high and low so we traded from these lows up into a premium above 50 below

50 is a discount up here we tried to rally up above this high failed broke back down below 50 percent and then created a gap okay so it comes up back into a premium market above 50 and fills in the gap i mentioned how this type of retracement can lull traders into likely thinking it's going to go higher but we're thinking down here okay the liquidity resting below here is what they're going to attack so all of this consolidation just sets up another selling opportunity to run down there and again you're welcome to go back

and listen to the previous discussions and you'll hear me basically say that we're going down here all right so it needs to rebalance this first and it spends three days in that range notice that then it releases the downside attacks the cell side here and trades into the cell cell liquidity resting below here so let's go into a lower time frame hourly chart and fared out some more information and details all right so here is the hourly chart you can see that high end of the fair value gap and the low end of the favorite

gap we traded up into that sold off consolidated sold off once more and you watched me share on the community tab my live trades from yesterday it was traded through td ameritrade it was not a demo account okay so i want to go into what i used what i saw and then obviously i'll show you in the account where the details were okay all right so the market started trading rallied up took out a short-term high on friday see that then started the breakdown now the overnight i was watching this but i was hoping that

it didn't take out that low before the morning i wanted to see it trade up here take the high out and then consolidate after running below that short term low i didn't want it to be in a hurry before the new york session in the morning because that would have set up a nice short up here where i could have taken a run under this low and then see if i can capture a re-entry which is the entry you'll actually see me do and then the drop down in here now on monday it was a

bank holiday and trading stops at one o'clock in the afternoon on holidays generally and resumes around six o'clock in the afternoon new york time and when we stopped here we had already moved aggressively lower and stopped right there so i felt very strongly that we were going to gap down below it and it gave just a beautiful gap lower and run immediately but i was looking at the 13 5 ninety thirteen five eighty six level real time and i couldn't get to my screen fast enough to close it out there and i didn't wanna put

a limit order in because if it got really far down below and started running you know really lower with a lot of speed and such i didn't want to limit my profitable exit with having a limit order in so i just left it open-ended and i wanted to see how far it would reach down in there by the time i closed the trade it closed me at thirteen thousand six twelve and a quarter so my entry was thirteen thousand eight fifty eight and a quarter the exit was thirteen thousand six twelve and a quarter that's

not a little bit of ticks okay 204 some plus handles so you take that 240 sum times that by four there's your tick value for those like to keep counting them you're going to drop down into a 15 minute time frame all right so we had that run on friday's high here to break down and at 10 30 in the morning 10 33 was the actual fill so it's right in that candle right in here i'm trading in that candle going short so we're going to go into the details and look at why that was

the case and again you'll see the live account log in in the business okay so just hold on to your horses if that's the attitude you have right now oh you in the hindsight so we're going to go into a five-minute chart start going down into the details here this is a little bit taller so that way you can appreciate the imbalances that are being shown all right so we had this rally up which in my mind was acting like a judah swing in the morning okay so here's 8 30 it starts to run higher

so i want to be in going short at this candles opening and you can see that well maybe you can't see it the opening price over here okay here is 8 30's candle right there the opening at 13 7 98 and a half so i want to be preferably going short something above that price okay so i'm anticipating further weakness and before i go any further in this one i got several people probably about half a dozen or so mentioning their confusion with why i mentioned the opening price at new york at midnight and in

the opening price at 8 30 in the morning there's two reference points being specifically dealt with there if you're looking at the entire daily range you're going to use the opening price at midnight but if you're going to be looking at the morning session you're going to be looking at the 8 30 in the morning opening price okay so hopefully it's made a distinction there don't worry i have a market structured lesson coming up on thursday that will further solidify and remove all doubts and concerns about that okay but for now let's just go through

this one so 8 30 in the morning the opening price i'm bearish i'm thinking we're going to go down below that green level there that's the old daily low so on this candle here at 8 30 i'm expecting all this being a fake rally it's something to lull in traders that chase it going higher the retracement people that don't really understand order blocks they're going to say look at that it's a down closed candle i'm going to buy that and then when it starts to go up like that they feel wow this is really easy

every down closed candle after a run-up is a bullshore block it's not in here is the real context okay we have an imbalance there and that's what i'm looking at i'm looking at this imbalance right there so i'm trying to operate inside that range for a short now i know because of the volatility it can color outside the lines and it's okay the bodies of the candles are kind of supporting the idea of what i'm looking for but the wicks i could care less about because i want to get in when it's ideal and i'm

going to show you what that was looking like for me at the time so we're going to drop down into a four-minute chart okay so here is that imbalance and fair value gap on the five-minute chart but now it's a little skewed because it takes up two candles to show that range the market trades up and right in that candle that one right there that's where i'm going short i got in at 10 33 okay that was my short dropping down into a three minute chart okay the market trades up works inside that imbalance and

right there 10 33 that candle when it's starting to bump up against the top end of that fair value got right there as it hits that and starts to move away i'm in there i'm going short right there the reason why i'm trusting that and not thinking it's going to go higher is because we have this high here okay and then we have this high here which highs higher this one or that one obviously this one now this candle is high watch what happens from this high we have a short-term swing high next to it

here and then we have one here so this one makes a intermediate term high so we have a long-term intraday on a three-minute chart which sounds like an oxymoron though but long-term high intermediate term high because this high is lower than that one but we have a swing high here and here that are lower both being lower than this one then we have the same context right here we have a high with a lower high on either side of it so i have market structure behind me showing that this is number one it's a bearish

market because my draw and liquidity is down here it hasn't traded down there yet okay so it's gonna act like a big magnet so all these fluctuations in here without understanding what i'm showing you it's gonna feel like it's just noise it's chop it's not it's actually telling you exactly what it's going to do so the swing high here is an intermediate term swing high so i want to be going short real close to this high because it's likely to break like it does here so at 10 33 when it hits the upper end of

that fair value got i have at now at this moment go back one candle we have this high a higher high and a lower high so we have a high with a lower high on either side of it that's a swing high that is lower than this one that is lower than that one so it's far more than just oh he's just looking at lower lows lower highs that's what a myopic individual would come and watch this so like when they see me put a rectangle in the chart they're saying oh it's supply and demand

it's not there's so many more factors involved that it's just not even in the same vicinity okay so sparing all that compare and contrast because i've done a lot of that already on the videos on this youtube channel the elements of intermediate term short-term highs i learned that from larry williams okay that mode of deciphering market structure he taught that in a video course that i bought back in the early 90s and it was a video course that i mentioned many times in this youtube channel the future millionaires confidential trading course something to that effect

it was for vhs tapes and when he talked about market structure it kind of went over my head the first few times listening to it like i didn't really understand what he was showing until i started literally going into the charts and saying okay here's a swing high and this is how you learn it okay because trust me watching this video or watching someone else parrot what i say and then say wow he did it in five minutes he's teaching it better that's not it's not jealousy me saying that i'm telling you you have no

idea what you're doing you're not even teaching it correctly and those that believe that they're learning it correctly are going out there and wrecking themselves what you're looking at is a price chart with a directional bias okay something that's leading to a draw on liquidity so i've already told you last week that we were going to go below that green line that's where we were heading so what you're doing is you're looking at all the swing highs and every time you see a swing high on a song high is simply a high that has a

lower high candle to the left of it and a lower high candle to the right of it and then one in the middle that's your swing high note that okay in the old days when we printed out our charts and such and we had chart books delivered to us we would get them once a week they would give us the friday's closing data and all the daily candles and then until we got our new updated chart book we had to hand draw in the open high low and close on the charts when the markets say

we were following so whenever we saw a swing high or swing low we would just put a little ring above it little circle okay like a little halo and that would be a short term high now i would do a double circle or double halo for an intermediate term high and then three halos for a long term swing high so that way when i'm looking at price it allows me to classify the level of high that is forming so it's not just lower low low or high no you got to look at the nesting effect

of the highs and lows and again that concept i learned from larry williams in the early 90s he talks a little bit about it in his book how i made a million dollar trading commodities last year which i believe is absolutely still essential reading even though there's a lot of things in that book i think is just fluff and just like all the moon phases and things i'm not into all that stuff but his chapters on market structure and his million dollar trading concepts those ideas and that premise behind it they are still true today

and they probably will always be true so if you don't have that book my recommendation is to get it go and get it where we can i'm not going to put any kind of affiliate links up that way you can't think i'm making any money by showing his uh his books i just think it's a really good book and at least once a year i go through and read it just for nostalgia reasons but i got it pretty much remembered verbatim but by looking at that relationship of the highs i trusted this because we had

a swing high here already in effect and i know this candle here is not likely to go above this one because this one didn't go above that one and this one didn't go above that one not because it's lower lows and lower highs there's much more going on underneath the the surface than just lower lows and lower highs that's just it's cringy when you hear people talk like that and they try to reduce it down to something like that or it's a support resistance idea it's just by the floor and sell the ceiling okay or

why does an ict look at this trade over here industry because those trades are being referred to in hindsight by those people that talk like that i'm literally taking live trades i'm taking them i'm executing on them and i know why i'm doing it i'm not guessing i'm not trying to figure out or deciphering what it is after i get into trade i know what i'm looking for and i know why i'm waiting for it that is something that you learn by developing patients and trusting a model the only way you trust it is to

go through back testing look at all these price action moves and start classifying the swing highs and swing lows i will amplify what i just talked about here on thursday's lesson okay because thursday's lesson is going to be on market structure okay i'm going to teach a lot of people out there to think they know market structure they don't really know that much at all actually but if this is the candle i'm trying to get in at and i execute on with all the understanding of this outline there i want to see displacement we get

it here now if i didn't take this trade here i could trade with the return back to this right here why why is that possible we have a swing high it's broken to the upside this low is taken out here this candle is high here if it touches that again i can be short there just using the imbalance in the fair value gap entry technique i'm teaching you so i can go there and get short or i want to get up here as close as i can to that important high that i've already outlined here

so i want to be in that and wait for that initial move because then when this occurs when you're that high up in the well the session high so at 8 30 right there this run up i'm real close to this high by entering there notice that i'm not waiting for a breakout below that low so i'm getting up in there where it's an optimal entry i don't need to get the highest high you don't need to get the highest high but you need to understand why it should be trading away from the levels you're

trying to enter at and that's kind of like what i'm showing you here i'm hinting at a deeper lesson i'll give you on thursday but the displacement comes which is what i was waiting for and it gives you a confirmation when this occurs it's just almost like okay just sit back and just relax and just let it do its thing now monday again was a holiday so i knew i had abbreviated session hours so it's going to close at one o'clock so that's right in here and then next candle obviously would be one o'clock and

it's not trading so it closed but it closed here ahead of one o'clock and then the holiday session closing at 1 pm in new york local time and the low that green level here remember go back to the daily chart at the beginning of the video and what we were referring to last week the liquidity the cell stops below this green line that's where it was going to attack okay and it came in and did so it opened up six o'clock in new york time opened up and slammed down accelerating lower that is the move

that you want to see being short up here and covering down below here once it does that and it runs into it low deep that's it take your profits and move the sidelines and then wait because you have a big gap here it's likely to come back and rebalance that and fill it in and it does and then ultimately trades around that old low and eventually pumps up into the afternoon consolidates then goes into the early morning afternoon hours right there and i showed how this setup because after a big move you don't want to

trade in the morning session just don't do it and i purposely go into a demo account to appease that desire to want to trade so i don't burn the account i don't take the heat off of a nice win and replace it or dampen it by taking a losing trade in my history in the last 30 years i've been fortunate enough to know how i have hurt myself those things are the things that i like to mentor with but those are also the lessons that everybody complains about until they lose money and then they come

back to me and they're like i wish i would listen so i get it you know everybody has their own interpretation of what they should be doing how they should be learning it but you know i've lived it you're just now the you're learning about it so when i have a nice winning day as you'll see it was a nice little win um i'm not gonna hurry to go back in and then you have these days here where it can trip you up you don't know what's going on you don't know what's likely to occur

so i went in and i demo traded and used again quote unquote discount broker leverage to compare and contrast those fellows out there that like to work in their market replay and paper trade their stuff with ninjatrader and then you know compare and contrast you know what i'm doing with trading view so it kind of like scratches an itch and it keeps me out of trouble with a live account because if you catch a good lick in the marketplace and you've had winning trades or you caught a really nice winning trade that you had to

wait for the setup to pan out when that occurs if you're new you have an impulsive tendency to want to go back in immediately and get that dopamine hit again i i did something right you know i made money when i was a younger man i did that and i had some really nice run-ups in the account and then boom i get a really big winning trade all of a sudden i feel like it wasn't enough because i was so low nobody around me was supporting me i had no support structure around me none i

didn't have anybody saying hey what you do is awesome you don't need to worry about anymore so it was just me saying i had to do more so one of the mental hurdles you're going to have to contend with is knowing when enough is enough and when you've made money real money in a live account you just don't want to rush to get back in there again you get folks out there that sit on social media and say you know you got to push your edge no you don't want to push your edge because if

you keep pushing your edge you're gonna dull it you sharpen it by knowing when to get in when to get out and you don't dull your edge okay so when i hear people talk like that i already know they're not profitable i know they're not profitable because they're gamblers and they want to sound like they're doing something all the time and they're not and if they are they're doing it probably unprofitably so this morning after 9 30 again what's the bias bearish that has not changed even though we had this run up it hasn't changed

so at 9 30 equity is open after consolidation it runs up creates a high and then runs up again takes out the high that right there is your run on stops wait to see if it wants to break down it does so we're going to look at that and refer back to the video i just put a little short video up uh this morning and outlined the whole business there i don't want to do it here because this is rehashing what i already showed in a very short one minute or so video but ultimately right

in here we have a nice little selling opportunity and you can attack the fair value gap in here between the low and the high right there it would be and if you want to trade with the longer term bias you could attack the cell side liquidity resting below here and here because they're relative equal lows and then you would have got a nice fill there as well so i teach in a manner that allows my students to pick number one the style or trader they want to be they want to be a day trader they

want to be a scalper do you want to be intraday swing trader if they want to be a short-term trader where you're holding over you know overnight or if you want to be a daily chart swing trader or four-hour chart swing trader where you're holding you for a week or more or if you want to do a position trader which to me is i don't have i don't have that mentality to do that i have too many things that show up on a chart that make me change my mind all the time so i have

a lot more opportunities because i think short term and i excel in the short term it does not mean that that is not a profitable way of trading when it's position trading because i don't match that personality wise so i like to excel where i'm strongest and it's in intraday trading and i can run the account pretty quick with velocity i can get in get short-term moves and just parlay them out real quick which is kind of like what i was demonstrating you know facetiously this morning with the one minute video thumbing my news at

the quan so we're looking at the likelihood of potentially going back down below that level again if it does it'll probably start to accelerate i like 13 thousand three hundred if we get you know on a roll going lower i like that one and maybe even if we get really excited it can trade down into twelve thousands okay twelve thousand eight fifty twelve thousand eight seventy five in that area so just something to think about i'm not suggesting you should take a trade in it or not but just thinking out loud uh this lesson obviously

it was a little bit fast and loose and it will be a lot more structured on the market structured lesson on thursday hopefully you found this one insightful and i'm going to show you again this was a trade actually took with a live account all right so i'm going to log into my tdmr trade account and i'll show you a result of a trade i took yesterday i have not taken any live trades today again this is just the show real executions are being done i like to teach with a demo but just to answer

the folks that are just really hardline critics or just want to know can i push the button push the button on ct all right so here is the business for uh last six days trading and again this account is just to show what i believe a student could do now right away look at this right here this is this is not a losing trade it looks like negative twenty seven hundred dollars and fifty five twenty seven fifty five what that is is an adjustment by the broker because at the time of settlement when i closed

the trade it showed that i was up four thousand nine hundred twenty dollars and then because of their accounting they were just showing that they were reflecting a gain of seven thousand six hundred seventy five dollars which is not a actual realized result for me it was them doing their administrative side it's a broker thing trust me i cannot do anything to make that happen it's not me doing some funny money business okay anybody that trades with live funds they've probably seen this happen in their own account so over here you can see the executions

yesterday at a scratch where i got in a little too early i was only ambitious and then the second one i wasn't sure if it was going to go higher or lower and just to appease my curiosity i threw a short end just to see what we get snapped against me a little bit not not much but still enough to get my attention and i knew what i was looking for so there's the short i just outlined in the previous portion of this video wrote all that down held for the gap opening after reopen at

six o'clock and there is the close of the trade right there nice little dandy four thousand nine hundred twenty dollars fixes the little pinch i took on the one trade earlier in the day and the one scratch was nothing it was covering costs okay and again there's the business there that's the entry and that's the exit and there's no commission costs on the one above that as you can see that was not a trade hope you found this insightful until talk to you on thursday be safe