ICT's 2022 Mentorship Program - Lesson Six Review

Summary

In this video, Paul reviews ICT's 2022 mentorship program, focusing on fair value gaps and market structure shifts. He explains the principles behind ICT's trading approach, emphasizing trading against retail sentiment and aligning with institutional strategies. Paul illustrates how to identify bullish and bearish fair value gaps using the three-candle formation and discusses optimal entry points. He also covers market structure shifts, detailing how to spot and capitalize on them for trading opportunities. The video concludes with insights on managing exits, advocating for taking partial profits over rolling stops, and using the range of the day to determine exit points.

Takeaways

• 📊 The video provides an in-depth review of ICT's 2022 mentorship program, focusing on fair value gaps and market structure shifts.
• 📈 ICT's trading philosophy is based on internalizing price delivery and understanding the behavior of retail and institutional traders.
• 🔍 The video explains that retail traders often follow patterns or indicators, while institutional traders focus on time and price.
• 📉 The concept of 'fair value gap' is introduced as a three-candle formation that signals potential market movements.
• 💹 The 'bullish fair value gap' is identified by a strong upward movement after a dip into sell-side liquidity, typically near previous lows.
• 📌 The 'bearish fair value gap' is identified by a strong downward movement after a rise into buy-side liquidity, typically near previous highs.
• 📋 Market structure shifts are highlighted as significant price movements that break previous highs or lows, indicating a change in market direction.
• 📍 The video uses a NASDAQ example from February 3, 2022, to illustrate how to identify and trade fair value gaps and market structure shifts.
• 🚫 ICT advises against rolling stops and instead recommends taking partial profits and using the range of the day to manage exits.
• 📝 The video concludes with the presenter's intention to test and incorporate the new insights from ICT's mentorship into their trading strategy.

Q & A

What is the main focus of Paul's review in the video?

The main focus of Paul's review is to provide a detailed explanation of the concepts of fair value gaps and market structure shifts as taught in ICT's 2022 mentorship program, lesson six.

What is ICT's approach to trading the markets?

ICT's approach to trading is based on the principles of entering long positions where retail is selling and short positions where retail is buying, without relying on patterns for patterns' sake or indicator readings.

What is meant by 'retail traders' in the context of the video?

In the video, 'retail traders' refers to individual traders who are not part of large institutions and are often considered less informed or educated in trading practices, typically leading to a higher rate of losses.

How does the smart money view retail traders according to the video?

Smart money or institutional traders view retail traders as a source of liquidity, taking advantage of their speculative and uninformed trades to enter and exit positions.

What is a fair value gap according to the video?

A fair value gap is a three-candle formation where the gap is found across the body of the second candle, between the high of the first candle and the low of the third candle.

What is the optimal entry point for a bullish fair value gap as explained in the video?

The optimal entry point for a bullish fair value gap is after a run into sell side liquidity at the previous lows, where retail traders have their sell stops.

What is a market structure shift and how is it identified?

A market structure shift is identified by a price falling below a previous low (bearish) or rallying above a previous high (bullish), followed by a quick and noticeable displacement in the opposite direction.

What is the significance of the displacement candle in the context of a fair value gap?

The displacement candle is significant as it indicates a powerful move that breaks market structure and is used to define the fair value gap, with the gap being formed between the high and low of this candle.

What is the recommended strategy for managing exits in trading as per the video?

The recommended strategy for managing exits is to take partial profits and not roll stops, using the range of the day and looking for fair value gaps near the 50% Fibonacci level to take profits, and closing the remainder at the external range liquidity.

Why is the time of day important when engaging with price according to ICT's methodology?

The time of day is important because it is a key factor for institutional traders, who are looking to anticipate price seeking opposing liquidity at specific times, which can influence trading decisions and strategies.

Outlines

00:00

📈 Introduction to ICT's 2022 Mentorship Program Review

Paul begins by introducing his review of the sixth lesson from ICT's 2022 mentorship program, focusing on fair value gaps and market structure shifts. He outlines the video's content, which includes an explanation of ICT's approach to price delivery, an in-depth look at both bearish and bullish fair value gaps, and a discussion on market structure shifts. The video also covers a trade example from the NASDAQ and strategies for managing exits. Paul emphasizes the importance of understanding ICT's principles for those who wish to implement his trading strategies.

05:03

📊 Understanding Fair Value Gaps and Market Structure Shifts

This section delves into the concept of fair value gaps, which are three-candle formations identified by specific price movements. Paul explains the optimal entry points for both bullish and bearish fair value gaps, which are typically found after a run into sell-side liquidity for bullish gaps and buy-side liquidity for bearish gaps. He uses a Bitcoin example from April 15th to illustrate a bullish fair value gap, highlighting the importance of a powerful displacement candle that breaks market structure. The discussion also touches on the flexibility in stop placement and the significance of the displacement high and low in identifying fair value gaps.

10:04

🚀 Analyzing Bullish Market Structure Shifts

Paul continues with an analysis of bullish market structure shifts, which involve a price drop into sell-side liquidity followed by a quick and noticeable upward movement. Using a diagram and a real-world example from the Bitcoin market, he explains how to identify the displacement high and low that form the boundaries of the fair value gap. The discussion underscores the importance of looking for powerful, not weak, candles to signal a genuine market shift.

15:05

📉 Exploring Bearish Market Structure Shifts

The video then explores the opposite scenario: bearish market structure shifts. Paul describes how these occur when the market rallies above previous highs and then quickly shifts lower. Using a Bitcoin example from April 16th, he demonstrates how to identify the bearish fair value gap and the optimal entry point, which is typically found after a run into buy-side liquidity. The discussion includes the importance of a powerful displacement candle and the flexibility in stop placement strategies.

20:06

🔍 Case Study: NASDAQ Fair Value Gap

Paul presents a case study of a fair value gap setup on the NASDAQ for February 3rd, using a 15-minute chart. He explains ICT's approach to identifying local highs or lows before the market opens and looking for price movements into those zones post-open. The example shows how the market traded into a liquidity zone and then formed a fair value gap, leading to a profitable short trade. The video concludes with a discussion on managing exits, emphasizing the importance of taking partial profits and using the range of the day to determine exit points.

📚 Conclusion and Future Outlook

In the final part of the video, Paul summarizes the key takeaways from ICT's lesson, including the value of using swing highs or lows as alternative stop placements and the strategy of taking partial profits over rolling stops. He shares his intention to test these strategies in his own trading and expresses his eagerness to apply the new insights to improve his trading framework. The video ends with a call to action for viewers to like and subscribe for more content, setting the stage for future lessons.

Keywords

💡Fair Value Gap

A 'Fair Value Gap' refers to a specific three-candlestick pattern used in trading to identify potential entry points. In the video, it is described as a formation found across the body of the second candle, between the high of the first candle and the low of the third. This concept is central to the video's theme as it is used to illustrate how traders can identify opportunities based on price action and market structure. The video provides examples of both bullish and bearish fair value gaps, showing how they can be used to enter long or short positions respectively.

💡Market Structure Shifts

Market structure shifts are significant price movements that indicate a change in the prevailing trend. The video discusses how these shifts can be identified through the analysis of price action, particularly when price breaks below previous lows (bearish) or above previous highs (bullish). These shifts are important for traders as they signal potential changes in market sentiment and can offer trading opportunities. The video provides a detailed explanation of how to identify and trade these shifts, using examples from the NASDAQ and Bitcoin charts.

💡Retail Traders

Retail traders are individual investors who trade through brokers or exchanges, as opposed to institutional traders. The video script mentions that retail traders are often considered less informed and are sometimes referred to as 'dumb money'. The video's theme revolves around the idea that successful trading strategies often involve doing the opposite of what the majority of retail traders are doing, as they are often on the losing side of trades. The script uses the term to highlight the importance of understanding market participants and their behaviors.

💡Smart Money

Smart money, in the context of the video, refers to institutional or professional traders who are considered to have a more informed and strategic approach to trading. The video suggests that these traders are often looking to take advantage of retail traders' lack of information or poor trading practices. The concept is integral to the video's message about understanding market dynamics and the different types of traders that influence price movements.

💡Liquidity

Liquidity in trading refers to the ease with which assets can be bought or sold without affecting their price. The video discusses how smart money traders use retail traders as a source of liquidity, meaning they rely on the buying and selling activities of retail traders to enter and exit positions. The concept is used to explain how market makers and institutional traders capitalize on the market movements created by retail traders, particularly around areas of support and resistance.

💡Displacement Bar

A displacement bar is a single candlestick that shows a powerful move in price, breaking the market structure by having a high that is higher than the highs of the surrounding candles (in a bullish context) or a low that is lower than the lows of the surrounding candles (in a bearish context). The video uses the term to describe a key component of the fair value gap formation, indicating a strong price movement that can signal a potential trading opportunity.

💡Stop Placement

Stop placement in trading refers to setting a stop-loss order at a certain price level to limit potential losses on a trade. The video discusses the flexibility in stop placement when trading fair value gaps, suggesting that traders can place their stops at the swing high or low, rather than strictly at the first or second candle of the gap. This concept is important for risk management and is used in the video to demonstrate how traders can adjust their strategies based on market conditions.

💡Partial Profits

Taking partial profits is a strategy where a trader closes a portion of their position to secure some profit, while leaving the rest of the position open to potentially capture additional gains. The video emphasizes the importance of this strategy over rolling stops, suggesting it as a better approach for managing risk and profiting from trades. The concept is used to illustrate a more conservative and potentially more rewarding method of exit management in trading.

💡Internal and External Range Liquidity

Internal and external range liquidity refers to areas of the market that are likely to have significant buying or selling pressure based on the day's price action. The video explains that traders should look to take partial profits at the internal range (around the midpoint of the day's high and low) and close out the rest of their position at the external range (either the day's high or low). This concept is used to provide guidance on where to set profit targets and manage exits strategically.

💡Swing High/Low

Swing high and swing low are terms used in technical analysis to denote temporary peaks and troughs in price, respectively. The video script mentions using swing highs and lows as reference points for setting stops and identifying market structure shifts. These concepts are integral to the video's discussion on trade management and the identification of key price levels that can influence trading decisions.

Highlights

Deep dive into fair value gaps and market structure shifts in the 2022 ICT mentorship program.

Explanation of how ICT internalizes price delivery, focusing on trading principles that drive market approaches.

Discussion on avoiding pattern trading for patterns' sake and not trading on indicator readings or momentum.

Insight into trading long positions where retail is selling and short positions where retail is buying.

Definition and importance of retail traders and smart money in the context of market behavior.

The role of time in trading and how smart money uses retail traders as a source of liquidity.

Description of the ICT bullish fair value gap, a three-candle formation for optimal entry.

Use of trade examples from the NASDAQ on February 3, 2022, to illustrate fair value gaps.

Importance of the displacement bar in breaking market structure for fair value gaps.

Flexibility in stop placement for fair value gaps and the use of swing lows as an alternative.

Detailed walkthrough of a bullish market structure shift with a focus on price movement and liquidity.

Introduction to the ICT bearish fair value gap, its formation, and optimal entry points.

Analysis of a bearish market structure shift with a focus on powerful downward moves.

Real-world example of a bearish fair value gap setup using Bitcoin data from April 16, 2022.

Discussion on managing exits, emphasizing the importance of taking partial profits over rolling stops.

Recommendation to use the range of the day and 50% Fibonacci level for partial profit taking.

Advice on closing out positions at external range liquidity for optimal exit strategy.

Reflection on the value of the lesson and practical applications for improving trading strategies.

Transcripts

hi everyone i'm paul and welcome to my

review of ict's 2022 mentorship program

lesson six there's been quite a few

people in the comments asking me to go

into more detail on fair value gaps and

on market structure shifts so if that's

you i've got great news for you because

today's video is a deep dive into both

so please like subscribe and let's jump

into the video so today's video is the

review of lesson six of the 2022 ict

mentorship program we'll just start with

a brief outline so the first section is

how ict internalizes price delivery and

then we get to the real meat of the

video which is about the ict fair value

gap

and we go over both the bearish and the

bullish fair value gaps and then we also

talk about market structure shifts and

again look at the bearish and bullish

setups of both

and we use trade example this time from

the nasdaq from the 3rd of february 2022

and then we've also got a section on

managing exit so the first section is

how ict internalizes price delivery so i

guess you could say this is the

underlying principles which i guess

drive ict's approach to trading the

markets and so you know if you're going

to follow his methodologies then it's i

guess good to understand uh how he

thinks about the market these aren't

necessarily my views but this is

obviously what he thinks and i think

it's valuable to have that insight when

you're then implementing some of these

strategies in the marketplace because

this is obviously the ethos if you like

for how he is approaching the market so

the first two points kind of go hand in

hand and that's you know we don't trade

patterns for patterns sake we do not

trade indicator readings or momentum so

you'd know from ict's videos that he

basically trades naked chart he might

draw some lines on there that's

generally for educative purposes but he

doesn't have any indicators on his chart

he just basically has the um

price bars and that's about it and so

fundamentally we're looking to enter

long positions where retail is selling

and conversely we're looking to enter

short positions where retail is longing

and so what do we mean by retail so

retail traders often in you know trading

circles are kind of used as a bit of a

derogatory term and the reality is is

most of us who are trading through a uh

a broker or an exchange depending on

what markets you're trading you know are

retail traders you know myself from a

retail trader obviously don't work for

an institution or anything like that

and you know often people call people

retail traders or dumb money or

uninformed traders and that's probably

not necessarily true of everyone but i

guess as a bucket we know that the

majority of retail traders are are not

very well informed not necessarily well

educated and typically you know they'll

lose you know 80 of traders or some

figure like that will blow up their

accounts and you know either never come

back or come back and block their

accounts again so what we do know is the

majority of retail traders aren't in the

market for a long term and so logically

then we don't want to do what they're

doing we want to pretty much to be doing

the opposite of what they're doing and

so the converse of this is you know we

refer to smart money and so that's often

often seen as a institutional view and

the institutions or smart money don't

look at patterns or indicators

and you know they're primarily concerned

with time and price with time being one

of the most important factors in the way

that they approach their trading and so

it follows then that if retail traders

are going to be losing in the market and

they're not going to last and they're

obviously going to turn over their

accounts

then the smart money or the informed

money is going to be looked to be taking

advantage of

both speculative and uninformed traders

because they're generally going to have

the wrong bias in the market you know

they're not going to be using stops

properly or not be using them at all and

so smart money really looks at this pool

of traders as a source of liquidity so

you know we know with institutional

uh or smart money traders that they need

significant size to get set in their

positions and so they're going to use

this pool of traders as a source of

liquidity so that they can get set and

then they can execute on their specific

bias and so it follows then that you

know part of ict's underpinnings is that

we should be anticipate price seeking

that opposing liquidity and that you

know as we said with smart money the

time of day is vital when engaging with

price so moving on now to our ict

bullish fair value gap so

remember our fair value gap's always a

three candle formation and the fair

value gap is found across the body of

the second candle and that's in between

the first and the third ones obviously

so optimal entry for a bullish fair

value gap is always going to be found

after a run into sell side liquidity at

the previous lows so remember this is

where retail traders are going to be

going along and they'll have their sell

stops there so that's what's generating

that liquidity opportunity fair value

gap is typically found above a single

price low or a multi-price low or a

double bottom so just have a look at an

example now so this is bitcoin on the

15th of april on the four minute chart

so in our example here we can see the

setup of the fair value gap on this four

minute chart for bitcoin on the 15th of

april so you can see at the bottom here

this is our previous low and so this is

where the liquidity is residing this is

where those sell stops are because

retail traders going along here looking

at this as support and they obviously

have their stops down here so being long

they'll be sell stops which would

flatten their positions so you can see

we run down into these previous lows so

that's our optimal setup for a fair

value gap and we can see just above that

we have our three candle pattern

formation so our first candles this down

candle here and you can see the second

candle is that displacement bar we're

looking for so that's that single candle

which has a powerful move and you can

see that this breaks marker structure so

we have this swing high here so that's a

three candle pattern where we have the

middle candle with the higher high of

the other two highs of the candles each

side of it and this candle breaks market

structure so it breaks above the high of

that candle

and then the third candle which is this

one is like obviously quite a large one

is that that forms then the top of the

fair value gap so our fair value gap is

formed across the body of that second

candle and it starts from the high of

the first candle and the low of that

third candle

and so you can see in this particular

trade you know the market traded down

into that liquidity came back up again

formed this fair value gap now one of

the other points that ict mentioned in

that lesson six video is that the stop

placement does have some flexibility so

in some of my previous videos where i

talked about my experiences trading the

fair value gap in bitcoin is that i

often found that the market would

overshoot just slightly i would take out

my stop down here at either the first or

the second candle which is where i've

been placing my stops and so in that

video ict mentions that you can actually

put your stop at the swing low so you

can see i've done that here and that

obviously just gives you a little bit

more room

for that trade to breathe in case it

overshoots now in this example that

doesn't happen the market trades up and

you can see here the market trades into

this fair value gap so if you'd gotten

set by having your limit order at the

low of that third candle you obviously

would have entered this trade here now i

think just for

interest

i just marked out sort of what kind of

return you would have got on this and it

would have been easily a two hour return

i think it was actually

a little bit more than that so again

that's a great setup and this is a good

example of what that fair value gap

looks like in practice and so in that

example we touched about the market

structure shift and so going into a bit

more detail on that now what we're

looking for is for price to fall below a

previous lower lows

so that's pushing down into that

liquidity

from where those retail sell stops are

and then quickly shift higher and so

that's what that move in the fair value

gap is all about so this move should be

quick with noticeable displacement so

you saw in that example that candle you

know is quite powerful uh and it's not a

small move it doesn't have a weak you

know it's not a weak candle with a

little wick or anything like that it's

very noticeable on the chart it really

stands out and so the fair bay gap is

going to be found between the

displacement high and the displacement

layer so let's just take a little quick

look at what that would look like and

just reference that back to the example

we just went through so this is just a

little diagram describing that bullish

market structure shift and so what we're

looking for is we have price come down

and obviously it creates that previous

low so that's this previous low up here

before the market trades higher and that

creates your displacement high so we

then have the market trade down past

that previous load into that liquidity

and then we have this powerful move

upwards so this is the displacement

candle that we're looking for and this

is where our fair value gap will be

formed so if we look at that in the

actual

uh example that we looked at we would

have you know this push down and then

this push up and so this is obviously

where we have our displacement low and

high and the fair value gap is formed in

between there so this is just a

you know generic diagram showing the

push down into liquidity at these

previous lows and then we have our big

move upward with a displacement high and

then our fair value gap is going to be

found in between that so

the most important thing really is this

push down into the liquidity and then

the fair value gap being formed on a

displacement candle on the way up and

the form of that displacement candle is

important as i mentioned before in the

video you know we don't want this to be

a weak or tepid candle we want it to be

a powerful one so if we zoom in you know

as i said you can clearly see the

strength of this candle is obviously

another strong one here and there's you

know they get formed there as well but

this is the one we're really looking at

we have this powerful candle it breaks

the swing high here so this candle

breaks the high of that and that's our

indication that we have a bullish market

structure shift our fair value gap set

up and then all we need is for price to

trade back into that zone to get set

which is what happened in this example

so our ict bearish fair value gap is

just the opposite of our bullish fair

value gap as you'd expect so again it's

a three candle formation and that third

value gap is found across the body of

the second candle and is formed by

the first and third candles our optimal

entry for a bearish fair value gap is

going to be a run into buy side

liquidity which is at the previous highs

or above those previous highs and this

is where retail traders are going to be

going short and so their buy stops

reside there that's where our liquidity

is our fair value gaps typically found

below a single price high or a

multi-price high or a double top and so

the example we're going to be looking at

is bitcoin on the 16th of april 2022.

this is our example for the bearish fair

value gap setup and i'm using the one

minute chart for bitcoin on the 16th of

april 2022 so you can see i've marked

out the previous high here so this is

where our liquidity is going to be

residing so remember we'll have retail

traders trying to go short here because

they'll see this as resistance and

they'll have their buy stops you know

sitting in the background here and

that's the liquidity source that we're

going to be looking to take advantage of

so we have a run into that liquidity and

then as the market trades back down

remember we're looking for that powerful

move down so we're looking at a powerful

displacement down and our fair value gap

setup is that three candle formation so

in this example we have the first candle

here the second candle

and then this third candle here and our

fair value gap is formed between the low

of the first candle and the higher the

third candle and in this example given

it's a one minute chart you can see

that's the whole body of that second

candle so a fair value gap is formed

right there and this moved down this

three candle fair value gap formation

move down you can see that then breaks

market structure because it

the low of this move is lower than the

low of the swing low

and so we then have our market structure

shift and all we need is for price to

trade back into that zone which is

exactly what happens here so that allows

us to get set and then the market trails

away after that so again in this example

i chose to

place the stop or illustrate where the

stop would be at the swing high so in

this case that's we've got a swing high

here but

according to the other rules you can put

your stop at the first candle and

depending on what the formation of that

second candle looks like because

sometimes you do get a in this example

like a higher high of that second candle

and so you might want to place your stop

there so there is that variability now

ict's

elaborated on that so you can place your

stop at the local swing

high or low depending on which setup

you're looking for and so again you can

see this particular trade would have

been you know really quite a lucrative

one if we'd set our entry at the

high of this candle so we would have

been had a limit order to go short here

at the high of this candle you can see

if we've been able to capture you know

all of this particular move this would

have been a really great trade over a

five hour return so you know again

demonstrates the value of this setup if

it's executed well and so our bearish

market structure shift to go into a bit

more detail on that so we'll see price

rally above a previous high or highs and

then quickly shift lower so again just

with our bullish market structure shift

that move should be quick and there

should be noticeable displacement so

again it can't be a little tepid weak

candle it needs to be a powerful move it

should be a candle that's quite obvious

on the chart with the backdrop of the

moves prior to that and so a fair value

gap will be found between the

displacement high and the displacement

low and so again just a diagram to

illustrate that market structure shift

so what we have is price moving up and

this is those previous highs that we're

talking about that we have up here so

this is where our liquidity is is where

our buy stops are going to reside the

market trades back down and then it

trades up into that source of liquidity

so it pierces that liquidity and trades

higher and this is our displacement

higher so as the market trades down this

is that displacement we're looking for

so they should be obvious candles so if

we look at this example here again you

can see this move is quite clear this is

a powerful candle it's not a small weak

one

and so that's what we're looking for in

this zone between the displacement high

and the displacement low there should be

a powerful candle here and our fair

value gap is going to reside in that

zone

and so next we're going to run through

the example that ict used in his video

which was on the nasdaq for the 3rd of

february

and so we'll start on the 15-minute

chart and what i've done is i've already

marked it all out here and so what you

can see is we've got the beginning of

the session here

and we've got 8 30 marked here so

remember what ict is looking for in his

setups is the

local high or low prior to 8 30 and he's

looking for a move post that 8 30 part

of the session so in that morning

session either up into a previous high

or down into a previous low so he's just

really looking to the left of that 8 30

open for his you know

marker i guess you could call it and

then look into the market to trade into

those zones after that 8 30 period so in

this example

ict said he had a bearish bias going

into the session so he'd obviously be

looking for

bearish setups and remember we'll often

see the market trade in the opposite

direction prior to that sort of bias

that we're looking for so you can see

that happens in this example so you can

see prior to 8 30 we have these equal

highs so this is where our liquidity or

buy stops will be residing so i've just

drawn a line across so you can see as

that morning session has started to

unwind the markets traded lower and then

immediately traded higher back into this

source of liquidity up here so this is

our area of interest and this is where

our fair value gap setup is going to be

found so zooming in now to the three

minute chart on the nasdaq now i've had

to switch over to the ndx because my

data doesn't go back

far enough to use the nq but this is

pretty similar so you'll be able to see

this set up so you can see this is a

zoom in of that area of interest on the

15-minute chart so we have this previous

highest this is liquidity where those

buy stops residing we can see the market

trades up into that liquidity zone and

then starts to immediately trade lower

so what you can see happens here is we

don't have the fair value gap form up

here at the highs it sort of trades down

lower so we get this swing low here this

three candle formation here so this is

the lowest low of these two candles here

on each side

then we have our fair value gap form

immediately after so our first candle is

here

and then the second candle you can see

the fair value gap is formed between our

third candle and our first candle so at

the low of the first candle and at the

high of that third candle and you can

see this move this second candle breaks

market structure so the low of this

candle is lower than the swing low here

so we have that breaking market

structure the market then trades down

you can see takes a little bit of time

but eventually trades back up into that

fair value gap you can see it trades

quite close

to the to the stop here before trending

lower so i've just marked this up so if

you'd actually taken this trade and

you'd gone short at the high of that

third candle you can see you would have

got over a 4r return on this particular

trade so this isn't even extracting the

full move you can see the market trades

lower throughout the session

significantly lower but even if you've

just taken the first sort of line share

of that move that would have been over a

4r probably a five hour return so yeah

that's obviously a great result for this

particular setup and so that last

section provides a great segue into our

last part of the video which is managing

exits

now probably one of the most important

things i took out of lesson six from

ict's video

was the importance of taking partial

profits and that you shouldn't roll your

stops now i generally roll my stops and

i don't particularly like doing exits

that way and so it's not that i didn't

know that

taking partial profits was the thing

obviously i did but i just always been

sort of trained to to roll my stops and

to sort of protect my risk as you'd like

and so

when he started describing the principle

i guess of leaving your stop at its

original placement and then using

partial profits as your mechanism to

control your risk that sounded much

better to me and obviously because i

trade crypto too that's also actually

from a fee perspective a much more

economic way of doing it so i'm going to

start doing that in my trading and you

know i'll relay back to anyone who's

interested how that goes so the other

thing he recommended was to take the

range of the day so using your 50 fib

and then you should be looking to take

partial profits at the internal range

liquidity

the internal range is just basically the

middle of that you know around that 50

level of the fib so between the the

range of the day between the high and

the low that's formed so far in the

session and there should be a fair value

gap near that 50 level and i'd actually

never noticed that before and now since

i've started doing this on all my charts

i see it all the time so it's uh it's

quite interesting the things that are in

plain sight that you just don't notice

and so you should then look to close out

the remainder of your position at the

external range liquidity so that's

either at the the range highs or at the

at the range lows so there you go

there's my review of lesson six of ict's

2022 mentorship program i hope you

enjoyed that and if you were looking for

a video with more information on fair

value gaps and market structure shifts i

hope that helped you out and i think

there was a number of really valuable

insights into developing the framework

and the setup better that ict shared in

that video so i think the one about how

do you stop so using either the swing

high or swing low as an alternate place

to put your stop rather than on the

first or second candle at that fair

value gap that's something that's really

helpful because that's something that i

know in my testing wasn't really working

as well as i would have liked it so it's

definitely something that i'm going to

be testing going forward and the other

thing that i also thought was really

helpful was just to illuminate taking

partial profits rather than rolling

stops as an alternative for exit so

that's another thing that i'll

definitely be using and so all these

little tidbits are really helpful just

to layer on the i guess the existing

body of knowledge that we have about

fair value gaps and market structure

shifts from what ict is taught so fast

so if you enjoyed this video it'd be

great if you could like it and if you'd

like to see more videos like this please

subscribe to my channel really looking

forward to the next lesson and i'll see

you in the next video

you