ICT Advanced Market Structure | The ONLY Video You Will ever Need

Summary

This video script delves into market structure analysis for traders, emphasizing the importance of understanding uptrends and downtrends, and identifying swing highs and lows. It simplifies market structure into strong and weak points, guiding viewers on how to spot these points on a 1-hour timeframe chart. The presenter illustrates practical examples, showing how to use these insights for trading decisions, and encourages viewers to apply these concepts for better trading strategies.

Takeaways

• 📈 Market structure is essential for traders to understand liquidity and trends.
• 📊 Uptrend markets are characterized by higher lows and higher highs, while downtrend markets make lower highs and lower lows.
• 🔍 Swing highs and lows are short-term indicators, used to identify market movements.
• 🌐 Intermediate term highs and lows are identified by two previous short-term swing points and can also be influenced by inefficiencies in the market.
• 🏁 Long-term highs and lows are determined by intermediate term highs and lows, providing a broader view of market trends.
• 📉 Strong highs and lows are classified as intermediate and long-term points, while weak highs and lows are short-term.
• 🕒 The 1-hour time frame is preferred for identifying swing points with high probability.
• 📉 Market imbalances, when filled, can signify intermediate term highs and are crucial for trading decisions.
• 🔄 Understanding the weakest link in the market, either strong highs or weak lows, is vital for choosing the correct liquidity pool.
• 📋 Back-testing real market examples helps to apply the concepts of market structure in practical trading scenarios.
• 💼 The role of a trader is to anticipate retracements and target weak points in the market structure for potential trading opportunities.

Q & A

What is the primary focus of the video script?

The primary focus of the video script is to explain the concept of market structure in trading, particularly how to dissect a marketplace through liquidity, highs, lows, and algorithmic theory.

What are the different types of highs and lows discussed in the script?

The script discusses short-term highs and lows (weak), intermediate term highs and lows (strong), and long-term highs and lows.

How are swing highs and swing lows defined in the context of the script?

A swing high is defined as when the middle wick is higher than the previous and next wick. A swing low is when the middle wick is lower than the previous and next wick.

What is an intermediate term high according to the script?

An intermediate term high is either a swing high or swing low that has two previous short-term swing highs and swing lows around it or has tapped into an inefficiency like a bearish fair value gap.

How are long-term highs and lows determined in the script?

Long-term highs and lows are determined by having two intermediate term highs or lows around them, with short-term highs or lows within those intermediate term points.

What is the importance of understanding market structure for traders?

Understanding market structure helps traders identify trends, potential entry and exit points, and the overall strength or weakness of the market.

Why is the 1H hour time frame preferred for framing market structure according to the script?

The 1H hour time frame is preferred because it provides the highest probability swing high and swing low points, which are crucial for identifying market structure.

What is meant by 'imbalance' in the context of the script?

Imbalance refers to a significant price movement to one side, which is later corrected or filled, indicating a potential reversal or continuation of the trend.

How does the script suggest traders identify the weakest link in the market?

The script suggests identifying the weakest link by looking at the presence of strong highs above or weak lows below the current price, indicating potential sell-side or buy-side liquidity.

What is the significance of a 'bearish fair value gap' in the script?

A bearish fair value gap signifies a price level that the market has previously rejected, indicating potential resistance and a good place for traders to consider short positions.

How does the script recommend traders execute their trades based on market structure?

The script recommends traders to execute their trades by anticipating retracements to weak points identified through the analysis of market structure, using order blocks and fair value gaps as retracement levels.

Outlines

00:00

📈 Understanding Market Structure for Trading

The speaker introduces the concept of market structure as a key component of trading. They explain how traders use market structure to analyze liquidity and identify strong highs and lows, as well as algorithmic theory. The video aims to simplify market structure into an actionable process. The speaker emphasizes the importance of recognizing uptrends and downtrends, defining them as markets making higher lows and highs (uptrend) or lower highs and lows (downtrend). They delve deeper into identifying swing highs and lows, intermediate-term highs and lows, and long-term highs and lows, which are essential for understanding market movements. The speaker also introduces the concept of strong and weak highs and lows to help traders identify key points in the market.

05:00

📉 Applying Market Structure Analysis

The speaker demonstrates how to apply market structure analysis using real market examples. They discuss the use of the 1-hour timeframe for identifying key swing points and imbalances in the market. The video shows how to identify intermediate-term highs as areas of potential resistance and how these can be used to make trading decisions. The speaker also explains how to use order blocks and fair value gaps to identify entry and exit points for trades. They provide a detailed walk-through of a trade setup, including setting a stop loss and taking profit, and how to read market reactions to these levels.

10:02

💼 Executing Trades Based on Market Structure

The speaker concludes the video by discussing the execution phase of trading based on market structure analysis. They emphasize the importance of identifying strong and weak points in the market and targeting weak points for potential trades. The video provides examples of how to anticipate retracements and use them to target weak points for profit. The speaker also mentions their private mentorship program, offering daily lessons on technical analysis, fundamental analysis, psychology, risk management, and live trading for those interested in deepening their trading knowledge.

Keywords

💡Market structure

Market structure refers to the organization and characteristics of a market, including the number and types of buyers and sellers, the degree of product differentiation, and the type of pricing. In the video, market structure is used as a framework for analyzing trading dynamics, focusing on liquidity, highs, and lows to understand market behavior. It is central to the video's theme of dissecting market trends and making informed trading decisions.

💡ICT

ICT stands for Information and Communications Technology, which encompasses all forms of technology used to communicate and disseminate information. In the context of the video, ICT is likely used to describe the tools and systems that traders use to analyze market data and make trading decisions, contributing to the broader concept of 'Smart M' or market intelligence.

💡Liquidity

Liquidity in finance refers to the ease with which an asset or security can be bought or sold without affecting its market price. The video emphasizes liquidity as a key component of market structure, indicating that traders look for markets with strong liquidity to ensure smooth trading and minimal price slippage.

💡Uptrend and Downtrend

These terms describe the direction of the market. An uptrend is a period during which the market is consistently moving upward, making higher lows and higher highs. Conversely, a downtrend is characterized by a market consistently moving downward, making lower highs and lower lows. The video uses these concepts to explain how traders identify and follow market trends.

💡Swing high and Swing low

Swing high and swing low are technical analysis terms that refer to temporary peaks and troughs in a financial instrument's price. In the video, these are used to identify short-term trends within an uptrend or downtrend. A swing high is a point where the middle 'wick' of a price candlestick is higher than the previous and next wicks, indicating a temporary peak. A swing low is the opposite, indicating a temporary trough.

💡Intermediate term high and low

These terms are used to describe price points that are significant over a medium timeframe. An intermediate term high is a price level that is higher than two previous short-term swing highs or lows, indicating a medium-term peak. The video uses these concepts to help traders identify potential resistance or support levels in the market.

💡Long-term highs and lows

Long-term highs and lows refer to significant price points that have intermediate-term highs and lows on either side, indicating a sustained peak or trough over an extended period. In the video, these are used to identify major support or resistance levels that can influence long-term market trends.

💡Strong highs and Strong lows

These terms are simplified versions of intermediate and long-term highs and lows, used in the video to classify significant resistance or support levels. Strong highs are areas of significant resistance, while strong lows are areas of significant support. The video suggests that traders should respect these levels when making trading decisions.

💡Weak highs and Weak lows

Weak highs and lows are short-term price points that are considered less significant than strong highs and lows. The video uses these terms to identify areas where the market might be more likely to reverse or continue a trend, suggesting that weak points are the 'weakest link' in the market structure and potential entry points for trades.

💡Imbalance

Imbalance in trading refers to a situation where there is a significant difference between the supply and demand for a security, leading to rapid price movements. The video mentions an imbalance to the downside, filled by a retracement, which then creates an intermediate term high. This concept is used to illustrate how traders can identify and capitalize on market imbalances.

💡Fair value gap

A fair value gap is a price area where the market is expected to find equilibrium based on fundamental analysis. In the video, the concept is used to identify potential areas of price rejection or acceptance. For example, if the market approaches a fair value gap and then reverses, it is classified as a strong high, indicating a potential area of resistance.

Highlights

Market structure is key for dissecting a marketplace through liquidity, highs, lows, and algorithmic theory.

Understanding market structure can revolutionize your trading approach.

Uptrend and downtrend markets are defined by higher lows/higher highs and lower highs/lower lows respectively.

Swing highs and lows are identified by comparing the middle Wick to the previous and next Wicks.

Intermediate term highs/lows are swing highs/lows with two previous short-term swing highs/lows.

Long-term highs/lows are identified by intermediate term highs/lows with short-term highs/lows inside them.

Strong highs/lows refer to intermediate and long-term highs/lows, while weak highs/lows refer to short-term highs/lows.

Using the 1H hour time frame provides the highest probability swing high and low points.

Imbalances in the market can be identified by retracements into and out of certain price levels.

Traders should identify the weakest link in the market to choose the best liquidity pool for trading.

Strong highs indicate price should not take out that high point, providing resistance levels.

Weak lows are potential entry points for short trades in a downtrend market.

Backtesting raw examples of market structure in action on the 1H time frame.

CPI data can create significant price action, affecting long-term highs.

Bearish fair value gaps can be classified as intermediate term highs, providing resistance.

Traders should anticipate retracements targeting weak points in the market.

Order blocks and fair value gaps are retracement levels to target weak points.

The video provides practical examples of how to identify and trade market structure.

The presenter offers a private mentorship program for further trading education.

Transcripts

Market structure is one of the most key

components of trading I believe how ICT

and Smart M concept Traders look at

Market structure is one of the best ways

of dissecting a Marketplace through the

teaching of liquidity strong highs

strong lows as well as algorithmic

Theory but like many ictt Traders you

probably get overwhelmed with all the

information and can't yet piece it all

together don't worry I got your back and

in this video I'm going to break down

Market structure into a simple process

that's really going to revolutionize

your trading before we get into to the

video make sure you guys are following

me on Instagram lots of free education

on the market maker model as well as

this is where you guys can reach me if

you guys have any questions or want to

talk to me direct so we all understand

the concept of uptrend and a downtrend

market with an uptrend Market making

higher lows higher highs higher lows

higher highs pretty simple downtrend

Market making lower highs lower lows

lower highs lower lows right simple as

well but let's go even deeper inside of

this up Trend and downtrend it's

complied of these three metrics as we

can see here in this depiction a swing

high is classified as when the middle

Wick is higher than the previous Wick

and the next Wick so this middle Wick

being higher than the one to its left

and Its Right would classify this as a

swing high and for a swing low the

middle Wick being lower than the

previous Wick and the next week would

then classify this as a swing low these

would be your short-term highs and lows

next an intermediate term high would be

classified as a swing high or a swing

low with two previous short-term swing

highs and swing lows as you can see in

this depiction we have this swing High

Point with two swing high points to its

left and to its right so the middle part

up here would then be classified as our

intermediate term high as well as an

intermediate term high can also be a

swing high or swing low that has tapped

into an inefficiency so you can see

price action has came up into this

bearish fair value Gap and then left it

this would then be classified as an

intermediate term High we'll talk about

this more later so last but not least we

have the long-term highs and lows which

in this depiction we have this long-term

High which has these two intermediate

term highs to the left and to its right

and inside of those intermediate term

highs we have these shortterm highs

as you can see intermediate term High

short-term highs this middle part this

highest high here would then classified

as our long-term high so to make this

even more simplistic let's classify

intermediate term highs and lows and

long-term highs and lows as strong highs

and strong lows and let's classify

short-term highs or lows as weak highs

and weak lows let's get to the back

testing raw examples of this in action

when framing my market structure I like

to be on the 1H hour time frame this

gives me the highest probability swing

highs and swing low points inside of the

marketplace so we can clearly identify

that we've had this massive imbalance to

the downside and we've came up into this

imbalance filled in the imbalance and

then we came lower remember what we said

in the depiction when we have an

imbalance and we come back up into it

and then leave it that then classifies

as an intermediate term high so this

would then be classified as our Strong

high High meaning price should not take

out this high point so when we're

entering the marketplace and we're

choosing which liquidity pool that we

want to seek either buy side or sell

side liquidity we have to understand

where is the weakest link inside of the

marketplace we clearly see we have

strong highs above us we clearly see

that we've been inside of a downtrend

Marketplace so this gives me better odds

than not that the weakest link inside of

the marketplace would be then sell side

liquidity meaning this would then be

classified as a weak low because we have

strong highs above us inside of this

downtrend next we can classify another

intermediate term high can you guys

guess which one it would

be be this because we have this swing

high and then this swing High to the

left and to its right so this would then

be classified as our another

intermediate term high so coming into

the marketplace this morning as the

market comes up into this level there

should be a lower time frame order block

inside of this range which I would then

like to get short at stop loss above the

swing High targeting this sell-side

liquidity and this is what I would then

look for when coming inside of the

marketplace so as we can see here on the

one minute time frame we have this last

up close candles let me Mark this out

just like so and extend it now coming

into the M15 time frame we've identified

the two intermediate term highs as

strong high points and we went down to

the M1 time frame to then look at this

M1 bearish order block so as the Market

opens up I'd like to get short inside of

this bearish order block stop loss Above

This High targeting this sells side

liquidity pool because we understand

that the cell side is the weakest link

and these high points should now be

respected let's see what

happens we open up price Taps up into

our entry and then take profit is hit

down into sell side liquidity just like

so coming back on the H1 time frame see

where the marketplace stopped here we

took out this shortterm low but we

didn't even get near this intermediate

term low as you can see this would

classify as an intermediate term low

because we have this shortterm low to

the right of it and then this short-term

low to the left of it and as you can see

here the marketplace came lower took out

this short-term low but didn't even tap

into this intermediate term low before

then reversing higher now coming to the

marketplace this day we had CPI we have

these two swing high points this

intermediate term high and now we can

classify this as a long-term High

because this was the high that had this

intermediate term High to the right of

it and these intermediate highs to the

left of it so this is now our long-term

high so if the marketplace can see

higher prices it would probably take out

this high but we're still trusting that

this long-term High remains intact

because this would classify us as our

long-term high and let's see what

happens Marketplace comes up it takes

out this high but it leaves the

long-term High

intact just like we anticipated now

coming into the next day we can see here

that we have this intermediate term high

that longterm

high and now we have another

intermediate term high right here why is

this an intermediate term High because

this is the high that came up into this

bearish fair value gap before then

giving that rejection to the downside so

we could classify this coming into the

marketplace as a strong high and if we

can go down into a lower time frame here

and identify a bearish shorter block I

would then choose this as a level of

resistance to then get short inside of

the marketplace targeting back below

these lows as sells side liquidity

continuing that Trend to the downside so

Market's about to open here we come up

into that bearish order block I would

then take a short inside this bearish

order block stop loss Above That Swing

High targeting back below these lows

continuing that Trend to the downside

because we understand this is a strong

High the weakest link inside of the

marketplace is these shortterm lows so

we're going to want to see the

marketplace reach lower prices

continuing that bearish Trend to the

down

side and we can clearly see that we did

not come back up into the Strong high

instead we found rejection inside of

this beish sh block continuing that move

to the downside so coming into the next

day here we have seen the previous day

come up into that bearish water Block

Level we had that strong High it did not

reach up into that strong High instead

found rejection that then take out these

weak lows right and then coming into the

overnight session here we can clearly

see that we had this intermediate term

High here price came up into looks like

a lower time frame order block inside of

these long Wicks here failed to take out

this intermediate term high before then

seeing that drop to the downside so

coming into the marketplace this morning

I understand that we have now created a

high and the weakest link would then be

these previous daily lows so any form of

retracement that we get inside the the

marketplace this morning I would then be

looking for lows targeting the sell-side

liquidity because I understand we've

been in a bearish trend we have strong

highs above us and we have weak lows

below us I'm going to then capitalize

and taking out on those weak lows so my

job as a Trader now from a analysis

standpoint is complete now it's time to

execute and set of the marketplace on

the lower time frames targeting this

cells side liquidity so coming into the

M15 time frame here we can clearly see

that we have this bearish Fair value Gap

I'm going to take a short inside of this

bearish F value Gap stop loss just above

that high here targeting these lows here

for about a 2 to one hour and this would

then be my trade idea for the

day and as you can see here smooth as

butter we come back up into that bearish

for Val Gap and then drop to the

downside the high here that comes up

into this bearish for Value Gap is now

classified as an intermediate term High

and let's just say we missed out on this

trade if we can get some type of

pullback here into this bearish fair

value Gap then I'd want to take a short

here stop loss up here right targeting

back down here for about a one to one

maybe a 1 to

two just just say we missed out on this

trade and we had an opportunity right

here let's see if this trade would then

play it out with this intermediate term

high above

us we come back up into that bearish fad

Gap and just like so price action did

not break Above This bearish fad Gap it

did not even come back up here into this

intermediate term High it came back up

into a fair value Gap stopped and then

dropped lower taking out this week low

this short-term low point we between

this intermediate term high and this

swing low which one do you think is the

marketplace most likely going to want to

take out this short-term low because it

is the weakest link so when coming in

inside of the marketplace it's

identifying where is the strong points

and where is the weak points and then

targeting those weak points inside of

the marketplace and then your job as a

Trader when coming into the marketplace

and when executing is to anticipate that

retracement targeting those weak points

and I give you guys many examples here

very simple examples of order blocks as

well as fair value gaps as retracement

levels inside of the marketplace for you

then to target those weak points and

continue the overall Market structure so

that's going to be it for video I hope

you guys learned a lot from this video

maybe rewatch it a couple times to

really soak up all the information that

I gave you as well as hit that like

subscribe and comment any questions you

guys have or what you guys want to see

next I'm Arkham be safe I have released

my private mentorship where I give daily

lessons on technical analysis

fundamental analysis psychology risk

management as well as live trading and

much more for your trading success if

that's something you guys wish to check

out and want even more content and gems

from me not share it anywhere else it

will be the first link in the

description or the first link in my

Instagram bio if you wish to follow me

on there as well @ Arkham trades thank

you for watching