How To Predict The ICT Market Maker Model LIVE

Summary

In this video, the trader shares insights on executing lower time frame entries within a market maker buy model using the S&P 500 as an example. By leveraging concepts like fair value gaps, market structure shifts, and smart money reversal, the trader demonstrates how to identify high-probability setups. Throughout the video, the trader explains their logic behind trades, including risk management strategies like trailing stops and understanding liquidity zones. The video also highlights the importance of trading based on established models and emphasizes the use of ICT mentorship concepts to drive trading decisions.

Takeaways

• 😀 A market maker buy model involves using higher time frame setups to find low-risk entries on lower time frames.
• 😀 The trader is currently focused on S&P 500 price action and has entered a trade with a 50-tick gain, anticipating further upside movement.
• 😀 The trader identifies price manipulation and uses it as an opportunity for buying, with a tight stop loss to manage risk.
• 😀 A sharp price displacement on Wednesday indicates liquidity was taken out, which can signal a potential market reversal and continuation of higher prices.
• 😀 Smart Money Divergence (SMT) is used as an additional confirmation for buying as price shows signs of expansion after a market structure shift.
• 😀 Price retraced into a breaker low, which the trader uses as an entry point, anticipating that it will hold and continue higher.
• 😀 The idea is to target buy stops above the current price, with the fair value gap high serving as a potential target for price expansion.
• 😀 After price manipulation and liquidity runs, the trader expects that the protected low will not be revisited, signaling higher price movement.
• 😀 The trader uses logical levels (e.g., fair value gap lows, up-close candles) to set stop loss orders and trail them as the trade progresses.
• 😀 The trader is not focused on immediate profits but on the logic behind the trade and the concept of market inefficiencies being rebalanced.
• 😀 An emphasis on using ICT concepts to understand the market's draw on liquidity, helping the trader make informed decisions about trade management.

Q & A

What is the main strategy being discussed in the video?

The video focuses on a market maker buy model, where the trader looks for lower time frame entries in a higher time frame market. The goal is to buy during price manipulations and target price movements to fair value gaps and buy-side liquidity.

What does the trader mean by 'fair value gap'?

A fair value gap is a price range where there is an imbalance in the market, often due to sharp price movements. This gap is viewed as a potential area for price to retrace to and fill, offering trading opportunities.

Why is the trader not anticipating a retracement to the low-risk buy level?

The trader believes that the low-risk buy level has already been targeted by the smart money, which bought up the sell stops below. Since the liquidity at this level has already been cleared, a retracement back to this area is not expected.

What is the significance of SMT divergence in the trader's analysis?

SMT (Smart Money Technique) divergence refers to the difference in price movement between correlated markets or instruments. In this case, the divergence signals a potential market structure shift, suggesting that price will move higher.

How does the trader determine the entry point for the trade?

The trader looks for a combination of price action and market structure shifts, such as a breaker zone (where price retraces and then expands away). They also pay attention to liquidity areas, ensuring that sell stops have been cleared before entering.

What is meant by a 'breaker' in the context of this strategy?

A breaker refers to a price level or zone where a market structure shift occurs, typically after a retracement. It acts as a point of support or resistance that smart money is likely to respect, making it a key area for entry or stop placement.

What role do liquidity runs play in this strategy?

Liquidity runs are critical because the trader believes smart money manipulates the market to clear liquidity. These liquidity runs target buy and sell stops, which creates opportunities for traders to enter positions once the liquidity has been cleared.

Why does the trader trail the stop loss after entering the position?

The stop loss is trailed to ensure that the position remains profitable while still protecting against significant reversals. The trader adjusts the stop based on logical levels, such as the low of a breaker or other price action zones, rather than arbitrary levels.

How does the trader decide when to take profits or exit the trade?

The trader targets fair value gap highs and buy-side liquidity areas for profit-taking. The decision to exit depends on whether the price reaches these levels, and if not, the stop is trailed to protect profits. The trader aims for a high risk-reward ratio, even if the trade is not perfect.

What is the importance of understanding the draw on liquidity?

The draw on liquidity refers to the areas where price is likely to move in order to balance out liquidity imbalances. By understanding this concept, the trader can predict where the market is likely to move, either towards buy-side or sell-side liquidity, and make more informed decisions about entry and exit points.