ICT Emini S&P 500 Review / January 03, 2023
Summary
TLDRIn this video, the speaker discusses market analysis, focusing on the PMI numbers and their impact on trading. They highlight the importance of understanding support and resistance levels, fair value gaps, and market structure to make informed trading decisions. The speaker also emphasizes the need for active chart marking and the role of patience in trading.
Takeaways
- 📈 The speaker was anticipating the PMI numbers release at 9:45 AM and expected a potential market reaction leading to a sell-off.
- 📊 The video discusses the importance of watching for price movements within a specific range and the significance of old highs and volume in balance.
- 🔍 The speaker emphasizes the use of different time frames, from daily to 1-minute charts, to identify trading opportunities and market trends.
- 📉 The concept of 'fair value gap' is highlighted as a key technical analysis tool for identifying potential support and resistance levels.
- 📝 The speaker mentions the importance of marking up one's own charts as a learning tool rather than relying on others' charts.
- 🚫 The video script mentions avoiding 'lazy' approaches to trading and emphasizes the need for personal involvement and effort.
- 💡 The idea of 'consequent encroachment' is introduced as a concept related to the middle of a gap or imbalance, indicating potential market inefficiencies.
- 📌 The speaker identifies specific price levels and gaps, such as the 30-minute fair value gap, as critical areas for trading decisions.
- 📉 The script details a trading strategy involving short positions on fair value gaps and the anticipation of continued downward price movement.
- 📈 The speaker discusses the anticipation of an aggressive rally ('Judas swing') during the PMI numbers release, which did not materialize as expected.
- 📊 The importance of observing market structure shifts and price behavior around specific levels, such as 38.72 and 38.60, for entry and exit points in trades is highlighted.
Q & A
What is the main event the speaker was anticipating in the morning?
-The speaker was anticipating the release of the PMI numbers at 9:45 AM.
What was the speaker's initial expectation regarding the market's reaction to the PMI numbers?
-The speaker expected the market to 'whip up' and then look for a sell-off after the PMI numbers were released.
What trading strategy did the speaker mention for the day?
-The speaker mentioned trading inside a range with a bit more patience, as they were waiting for the market to break out of the range.
Why did the speaker refer to the 'old high' in the context of the daily chart?
-The 'old high' referred to the highest point in the trading range from the day's opening, which was used as a reference for potential resistance.
What is the significance of the '60 Minute chart' mentioned by the speaker?
-The '60 Minute chart' was used to observe the market's failure to reach the employment balance on the daily chart and to identify buy-sell liquidity.
Why did the speaker choose to use a '30 Minute chart'?
-The speaker used the '30 Minute chart' to clearly see the imbalance in the market and to identify potential trading opportunities.
What is a 'fair value Gap' and why is it important in the speaker's analysis?
-A 'fair value Gap' is a price area that the market is expected to return to for a repricing; it's important as it provides potential entry and exit points for trades.
What does the speaker mean by 'institutional overflow entry drill'?
-The 'institutional overflow entry drill' refers to a trading setup where the market breaks a significant low, indicating a potential institutional entry point.
Why did the speaker emphasize the importance of marking up one's own charts?
-The speaker emphasized marking up charts to enhance understanding and learning, as relying solely on others' charts is considered a lazy approach that won't lead to successful trading.
What was the speaker's trading action on the first trading day of the year?
-The speaker went short on two fair value gaps and was looking for continuation down into the levels shared on Twitter.
What was the speaker's strategy regarding the trades if the price went above a certain level?
-If the price went above the 39.20 level, the speaker would likely have to close the trades, as it would indicate a change in market structure.
Outlines
📈 Market Analysis and Trading Strategy
In this paragraph, the speaker discusses their anticipation of the PMI numbers and their effect on the market. They were expecting a potential sell-off after the numbers were released. The speaker also explains their strategy of watching for market movements within a specific range and trading within that range, highlighting the importance of patience. They delve into technical analysis, discussing the use of different time frames such as the 60-minute, 30-minute, and 15-minute charts to identify imbalances and potential trading opportunities. The speaker emphasizes the significance of understanding market structure and using indicators like fair value gaps and institutional entries to make informed trading decisions. They also provide insights on how market movements can be analyzed on a minute-by-minute basis, focusing on the importance of recognizing and acting on market imbalances and the potential for institutional entries.
📉 Trading Insights and Market Behavior
The speaker continues their analysis by discussing the retracement of the market back to the 15-minute fair value gap and the precision of the market's movements. They highlight the importance of recognizing algorithmic support and resistance levels, which may not always align with traditional support and resistance. The speaker also emphasizes the need for traders to actively mark up their charts to understand and predict market movements, rather than relying solely on pre-made charts. They discuss the concept of 'consequent encroachment,' which refers to the middle of a gap or imbalance, and its significance in trading. The speaker then shares their personal trading experience, detailing their entries and exits based on fair value gaps and market structure. They also mention their strategy of remaining an intraday scalper until a higher time frame narrative is established, indicating a more significant and sustainable price movement. The paragraph concludes with the speaker's approach to managing their trades, focusing on maintaining a heavy position and looking for opportunities to exit based on market movements and specific price levels.
Mindmap
Keywords
💡PMI number
💡Sell-off
💡Volume in balance
💡Fair value Gap
💡Imbalance
💡Institutional overflow entry drill
💡Mean threshold
💡Consequent encroachment
💡Breakaway
💡Intraday scalper
💡Daily volume balance
Highlights
The video discusses the anticipation of PMI numbers and its potential market impact.
The speaker shares a potential trading scenario based on the PMI numbers release.
Explains the importance of watching the old high in the trading range for potential sell-off signals.
Details the concept of volume in balance and its role in determining market direction.
The speaker uses the 60-minute chart to illustrate the market's failure to reach employment balance.
Describes the significance of the 30-minute chart in identifying market imbalances.
Mentions the use of the 15-minute chart to identify fair value gaps and market repricing.
Analyzes the market's behavior on the 5-minute chart, focusing on the start of a new trading year.
Discusses the market's trading above the buy side at 3900 and subsequent breakdown.
Identifies a low on the 1-minute chart as a potential institutional overflow entry point.
Explains the concept of mean threshold and its importance in market analysis.
Describes the market's behavior around the fair value gap and its implications for trading.
The speaker goes short on two fair value gaps, detailing the entry points and expectations.
Analyzes the market's consolidation around the 30-minute fair value gap and the potential for a breakout.
Emphasizes the need for traders to mark up their charts for better understanding and learning.
The speaker shares personal trading decisions and the reasoning behind them, including partial exits.
Concludes with the importance of observing the daily range for a higher time frame narrative in trading.
Transcripts
hi folks just a quick little video
this is the area I was watching on
this morning
and we're waiting for PMI number to come
out
at 9 45 and I was expecting it to likely
whip up into that and then look for a
sell-off and I tweeted about that this
morning as a potential scenario we were
waiting for 9 45 News not just simply
waiting for 9 30 opening
thank you
this old high here why this one is the
highest one in the range from today's
opening looking back here you go this is
the first one you go to that would be
higher than this one
and before we get this volume in balance
so we're stuck essentially inside this
range
waiting for it to come out of that so we
can obviously trade inside this range as
you watch me the other day but it takes
a little bit more patience
so we can drop down into the
60 Minute chart all right here is the
one hour chart you can see how we did
not get up
into that employment balance on daily
chart
we swap the buy sell liquidity
twice once twice
broke down
if everybody got
salsa liquidity and the 30 minute
whatever you got so notice we have this
big run here
but if we drop down into a
30 minute chart now I use the 30 minute
chart because you can clearly see that
imbalance right there
so
failure to get up above this High here
and run for that that's what we were
waiting for confirmation one way or the
other if it was going to run there not
in a hurry to take a trade
first trading day of the year
everybody's going to be wanting to get
in there and do something right away
we have a fair value Gap there
and you can see all those tweets were
mentioned before the fact
and then I mentioned that we would draw
down likely into this area here so let's
go into a 15 minute
okay and very clear 15 minute time frame
fair value Gap
beautiful return into it repricing and
then lower
down to a nice start of 30 14 and a half
five minute chart
[Music]
Market trades above again where the buy
side is nice round number 3 900. there
breaks lower
this low here we're going to look at
that on a one minute chart all right on
the one minute chart you can see
we had a run up into where buysite is
Market breaks down takes out swing low
now why do I like this low it may be
something like this one not so much well
you could have used this one here
where we went below it right on that
candle then we trade it right up inside
this imbalance there
that's more or less a institutional
overflow entry drill it breaks lower
really changes the market structure here
and over here so this is going to be a
little bit more
of a quality type setup
to have a fair value Gap in here
as it traded up into that that's an
expectation of lower prices because this
is also a breaker
bearish ICT breaker okay so inside this
lathdown close candle
it's returning back up into notice the
bodies of the candle they're respecting
half of that range from the candles high
and low
that right there is mean threshold mean
threshold is half of an order block
ing breaks lower creates another
imbalance repair of a gap from this
candle is high
that candle is low
and that shaded area in here
so I'm going to take these off as I talk
about them because it's no longer
important
and we have the up close candles here
once we break through it it's a bearish
order block
and institutional Oracle entry drill and
a fair value Gap so there's lots of
confirmation for wanting to be a short
seller here
on this candle as we trade up into it
and trade lower
leaving that open
okay leaving this range here open
is what Breakaway got
okay the market trades lower into our
survey gap on the 15-minute time frame
it consolidates I go short one more time
and accelerates down into
the 30 minute fair value Gap
here and as we went down below it limit
order was filled
and then we retrace all the way back up
to a perfect return to the 15 minute
fair value Gap look at the Precision
there now go back and look over here do
you see any kind of classic support
resistance that would justify that
perfect Precision right there no but the
algorithm does and sees the fair value
Gap that I've outlined on the 15-minute
time frame that's real support and
resistance folks the market trades lower
down into the low end of our 30 minute
fair value Gap
beautiful delivery and I
more or less told you all to screenshot
it on your own chart not just simply
take my charts because it's that's a
lazy person's approach to doing it you
won't learn that way you want to get in
here and get comfortable marking your
charts up it takes a little bit of
effort takes time
and
it's important for you to be able to do
it and if you don't do it if you don't
like doing it I promise you trading
won't be a successful Endeavor for you
you have to be involved you have to do
it yourself and it requires a lot of
effort on part of the students
Market hangs around
Works inside one more time consequent
encouragement which is the middle of an
imbalance mean threshold is the middle
of a order block
consequent encroachment is the middle of
a gap okay or an inefficiency like a
fair value Gap by sound of balance
outside efficiency or South side
imbalance by sound efficiency either or
just write that down because we'll build
on that as we go forward in the
mentorship but it goes halfway up into
that and then clears the buy side cell
size below here attack it runs down to a
really beautiful Turning Point 30 14 and
a half
and then now we've returned back up into
that 30 minute fair value Gap and now
consolidating in
around
and working the top end of that 30
minute figure that you got
so we'll be looking to see
[Music]
an eventual breakout of not that I'm a
breakout Trader but we want to see a
break out of that daily range before my
interest has really peaked on any
sustainable price run for analysis
purposes otherwise in layman's terms in
Easy language
we have to be an intraday scalper
until there's a higher time frame daily
narrative at work so that way everything
we look for is on a small time frame and
not expecting big monster moves
all right so we're watching price this
morning uh first trading day of the year
I went short on
two fair value gaps and
one at the top of the orange Fairway Gap
at 38.60
looking for continuation down into the
levels I shared on Twitter initially I
thought that we would get 39.20 as a
run-up aggressive run as a Judas swing
like a fake rally aggressive
during the PMI numbers at 9 45 uh Marco
was not having that so that's why I said
we have to wait and see what the market
does it failed to run above the 39.05
level
so I waited for the shift in Market
structure at just
below
38.72 and 3 4 73 and then return back
into a fair value guide you can see the
entries on the left-hand side on that
one minute chart
broke down traded again on a short entry
into the fair that I got and also very
shorter block and the third entry is at
the top of the orange purvey Gap at
38.60 as it traded up into that looking
for heaviness going down into
the 38 39 and a quarter level so I took
one partial
leaving two contracts on and I want to
get below that 38 42 50 level that's
where sell side is you can see that
noted on the right hand side on a 30
minute chart
and then why am I using a 30 minute
chart I want to see price remain below
that pair of a gap here on the left hand
side
if it goes above that then I'll probably
have to want to close the trades when
I'm thinking but I want to see it remain
heavy
heavy means I want to see it Go lower
and have difficulty rallying higher
and if we trade down below 38 42.50 I
will take one off but rejecting that 38
I'm sorry 3920 level like I was
expecting that daily volume balance up
there right hand side chart the upper
orange level
uh that to me was a likelihood of a draw
on the news driver okay but
I'll take another partial off here
and we'll see if it wants to go down and
take that I I mean a low hanging fruit
objective now
and we'll see if we get that
boom
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